Tech Play Frugl Group Share Price Rises 16% on Quarterly (ASX:FGL)

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Despite some carnage across the tech sector, one tiny stock is doing well for itself.

Frugl Group Ltd [ASX:FGL], was just one of many companies putting out quarterly results today. News which often leads to a share price rise or fall.

Fortunately for Frugl, it was the former, with the FGL share price climbing 16% at the time of writing.

A decent result for a company that is still yet to really make any earnings. So, what was behind the rise today?

User growth.

Groceries go mobile

See, Frugl has created and runs the ‘Frugl Groceries’ app. A piece of software that collects and compares prices of everyday grocery items.

The whole point it to provide users with knowledge of where to find the best deals. Including any potential specials, sales, or clearances. Not to mention all the nutritional information to ensure shoppers can buy healthy if they wish to.

It’s a neat idea, especially as it can aggregate data from several stores.

As it stands though, they have yet to implement any kind of monetisation for the app. With it free to download for anyone right now. That doesn’t mean they don’t have plans though.

With several options; ranging from selling the data collected via the app, to in-app ads, and even the possibility of in-app transactions, there are a number of ways to extract future value. Which ones they choose to pursue though, is still being decided.

Nevertheless, with an 11% increase in users for the quarter, and recent partnership to promote it to students, Frugl is looking to scale its popularity first.

With costs of $333,000 for the quarter though, and just $1.1 million cash on hand, they’ve got a short runway. Setting the stage for what will likely be further capital raises in the near future. That is, unless they start monetising very soon.

Still, for investors today, the stock is on the up. A fantastic sign of what will hopefully be much more to come.

What’s next for Frugl?

The focus for Frugl still remains on developing the app.

While they did just release version 2.0 in the September quarter, it’s clear that there is still work to be done. Not only via constant updates to new products or merchants, but also its monetisation strategy.

Some of which may be front end related, but a lot of which will likely be on the back end.

That’s good news for users, as what they have right now is probably close to if not fully representative of the final product.

For investors though, the real excitement will be increasing the amount of people using Frugl. And finding ways to generate money with the app.

A niche, but promising little tech stock.

And if you’re looking for more small-cap tech stock recommendations, we’ve got you covered. Our report on all things AI related showcases the best of the best in innovation from the ASX. Including four of our favourite stocks to consider for your portfolio right now.

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Ryan Clarkson-Ledward,
For Money Morning

About Ryan Clarkson-Ledward

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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