Building the Engine Behind the Subscription Economy
Emersion Software Systems | 2012 Consensus Highly Commended
Long before subscriptions became the business model behind everything from software and streaming to telecommunications and managed services, one Australian technology company was solving the complicated problem sitting underneath it all:
How do you actually bill for it?
Founded in Melbourne in 2005, Emersion Software Systems developed cloud-based technology that automated billing, provisioning and customer management — particularly for businesses managing large numbers of customers, services, plans and recurring payments.
By 2012, Consensus judges could already see its potential.
Emersion's Billing and Provisioning System received Highly Commended recognition at the 2012 Consensus Awards, with judges highlighting its evolution from telecommunications into a much broader platform.
At the time, Consensus described Emersion as a secure and scalable cloud service capable of helping organisations manage rapidly changing portfolios of bundled products and services. The judges specifically identified its cloud architecture, flexibility and speed-to-market as providing a strong foundation for future growth.
They were remarkably prescient.
From Telco Billing to Business Automation
Emersion had begun by tackling one of telecommunications' least glamorous but most difficult problems.
Billing.
Telecommunications businesses don't simply send the same invoice every month. They can be dealing with wholesale and retail relationships, different service types, usage-based charges, changing plans, provisioning and enormous volumes of transactions.
Emersion built technology capable of bringing those moving parts together.
But the opportunity extended far beyond telecommunications.
As more industries moved towards recurring revenue and subscription-based services, the same underlying problem appeared everywhere: businesses needed to connect their systems, automate repetitive processes, manage subscriptions and collect payments without armies of people manually stitching everything together.
Emersion increasingly evolved from a billing product into a broader customer engagement, subscription management, provisioning, payments and business automation platform.
And that evolution eventually attracted the attention of an ASX-listed payments company.
The Acquisition
In April 2020, Novatti Group Limited (ASX:NOV) acquired the Emersion business.
For Novatti, the attraction was clear.
Emersion was generating recurring subscription revenue, had established customers across Australia, New Zealand and Singapore, was EBITDA positive at the time of the acquisition presentation, and brought additional expertise in integration, payments and subscription management to the broader Novatti business.
The transaction comprised $1 million in cash plus 16.725 million Novatti shares, with Novatti describing the enterprise value as approximately two times Emersion's annualised recurring revenue.
For founder and CEO Paul Dundas, the acquisition wasn't an ending.
It provided the backing for the next stage.
Emersion became a wholly owned Novatti subsidiary on 9 April 2020, with Dundas saying the combination would provide stronger financial support for future growth, product development and international expansion.
And expansion followed.
From Melbourne to the United States
In March 2021, Emersion officially launched in the United States, taking its billing and business automation platform into the world's largest addressable market.
By then, the business was reporting continuous quarterly revenue growth, quarterly recurring revenue growth of nearly 20%, and customer acquisition averaging approximately five new customers per month, compared with fewer than two before the Novatti acquisition.
The technology recognised by Consensus almost a decade earlier had become part of a much larger international payments and automation strategy.
And the original problem Emersion set out to solve had only become more relevant.
Subscriptions, recurring revenue, automated payments and interconnected business systems are now fundamental to huge parts of the modern economy.
Behind every seamless monthly subscription is an extraordinarily complicated collection of processes that customers rarely see.
Someone has to make all of that work.
Emersion built the engine.
Its journey from Australian SaaS innovator to acquisition by an ASX-listed payments company and international expansion is also a reminder for founders building technology in the less glamorous corners of business:
You don't have to build the product everybody sees. Sometimes the greatest commercial opportunities lie in building the technology everything else depends on.