Kape Technologies PLC (LON:KAPE) has announced the acquisition of ZenMate, a digital privacy company based in Germany focusing on virtual private network (VPN) provision. With 50,000 software-as-a-service (SaaS) customers, the move strengthens Kape’s position in VPN, a standout growth area for the company currently. By utilising its digital marketing experience, Kape is confident it can accelerate ZenMate’s growth. We raise our FY19e EBITDA forecasts by $0.5m and adjusted EPS by 4%.
ZenMate: VPN-focused SaaS business
ZenMate is a multi-platform security software business with a focus on VPN solutions. It currently has 50,000, predominantly consumer, customers on an SaaS model and its main market is Germany. We estimate that these customers currently pay between $40 and $50 annually. To date, most of ZenMate’s customer acquisition has been organic and it claims a high retention rate (slightly below Kape’s current 74%).
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