AvePoint CEO on why the company is going public via SPAC

AvePoint CEO Dr. Tianyi (TJ) Jiang joins Yahoo Finance Live to discuss the company’s $2 billion merger deal to go public and break down why Microsoft has yet to buy AvePoint.

Video Transcript

- Well, in a busy year for markets with a lot of seemingly defining storylines, one of the main ones is the SPAC boom that we have seen this year-- billions worth of companies coming to market through these reverse mergers that I think not a lot of people have really heard about all that much from far this year. And one company set to make its debut on the NASDAQ as a result of one of these transactions is AvePoint. They will be acquired by Apex Technology Acquisition Corp. AvePoint will then be the publicly traded vehicle. And joining us now to discuss everything going on with AvePoint is the company's CEO, Dr. TJ Jiang.

TJ, Thanks so much for joining the show today. I'd love to begin maybe with the highest level overview as you can kind of describe it of where you guys sit in the Microsoft stack? Because you are essentially a services provider for enterprise that use Microsoft 365. How do you think about your role within the SaaS environment right now?

TIANYI JIANG: AvePoint is the largest SaaS data management provider for Microsoft 365 we help enterprises migrate manage and protect their data in Microsoft cloud. So the Microsoft lingo, we're called independent software vendor, ISV. Primarily, we're a software product company. And over the last nine years, we have been doing SaaS in the Microsoft cloud space. This whole theme this year with remote work everywhere, you can't really fake enterprise SaaS. You have to be doing that for a long time-- multi-tenant SaaS offering around the world with highest level of security our enterprise customers demand, around with ISO audits. And also, actually, geodata aware instances around the world, including [INAUDIBLE] certified data center in Arlington, Virginia. So those are the things that we do for enterprise customers today.

- Your business is-- it's free cash flow positive. It's growing. Why hasn't Microsoft bought you yet?

TIANYI JIANG: That's a great question. So Microsoft-- there's been a lot of paper written about the fact that Microsoft's way to grow is to-- and also, to defend their dominance enterprise space-- is to build this wide and deep moat of partner solutions. We're quite unique. We're high growth and we're cash positive. Since the inception of the company to today, we only have raised $60 million of primary capital to build this business. And we're fast growing, cash generative.

And this is why we're very, very excited about the current market. Microsoft 365 is a dominant enterprise platform out there-- 250 million users, growing to 500 million users in the future. And this is where we have the time to market advantage, as well as technology advantage to continue to augment and provide value to Microsoft customers. Essentially, we help customers make Microsoft technology work even better on cloud.

- And TJ, you know, as Myles mentioned, this back trend has been huge this year. And any company that we talk to that's doing one of these things, I have to ask you why? Why did you choose this particular method to come public? I mean, it's particularly when you talk about being cash flow positive, et cetera, you could have done a direct listing, for example. Why a SPAC?

TIANYI JIANG: Yeah, that's a great question. So firstly, we look at the optionality to become public. We think timing is perfect to do that. Again, the market is vast and again, we have this first mover advantage and technology advantage, since we're the only vendor in this space to do information management story around Microsoft cloud. So then we actually went down this traditional IPO as well as SPAC dual track methodology here just to make sure we check out all the options.

And the reason we choose the SPAC route-- really, two important things. One, we picked Apex especially for the founders of Jeff Epstein, ex-Oracle CFO, as well as Bookings and Twilio board member. And also, Brad Koenig, the ex-Goldman Sachs capital market tech banking head, who actually incidentally, took Microsoft IPO many, many years ago.

So both individuals are esteemed experts in the Field we feel as founders, we're just a bunch of tech guys and writing code is all our lives. And we feel that it took us 19 years to get here, we want to get to the next phase of our company's evolution much, much faster. So with Jeff and Brad's experience, operational knowledge, and capital markets knowledge, we feel there's an opportunity to really accelerate and scale this business.

And second, it's really the speed to transaction. So that allowed-- me and my team can go back and focus on running our business so that we can really grow this business. Otherwise, it takes too long to actually do this whole process.

- You know, TJ, I'm wondering if you can shed some light on I think a question a lot of investors have, which is where the uptake within Teams specifically on the 365 stack has been. Obviously, Slack is a very fun platform that we use here at Yahoo Finance, it has a lot of buzz, but the active users on Teams is just multiples larger. And what kind of migration and uptake have you seen? Is that something that I guess that you guys have a handle on, given where you sit in the Office stack?

TIANYI JIANG: Myles, I tell you-- Teams is the killer app for Microsoft cloud. So last year, it's 20 million active users daily. And by April, May, it's already 75 million. And now the latest number from Microsoft is 115 million. They blew past Slack of 12 million last year, and now they're gunning after Zoom's user base in [INAUDIBLE]. So it's a massive uplift.

We are actually the premiere vendor around Teams data management, Teams governance, Teams out of box. It's very viral, it's by design. So everybody can do channels, private channels, public channels, share documents chat, video calls. But what happened to those data assets when the meeting is over, when the project's over, when the external sharing engagement is over? They sit there.

So our point solution, our SaaS solution in enterprise to actually properly manage, sunset, and do proper lifecycle management and provisioning of all that asset. Plus backing up even down to the conversation level. So if they got hit by some ransomware attack, we can property restore. So this team's boon has been also boon to our business, where it's really bringing up all the complex workloads in the entirety of Office 365, Microsoft's Office Cloud. And that allows us to actually really come in and help the enterprise customer address much of their burning enterprise information management issues.

- And certainly changes when you have tens of thousands of people on their own Wi-Fi connections at home. All kinds of issues come up there, as well. All right, we'll have to leave it there. Dr. TJ Jiang is the CEO of AvePoint there, set to come public on the NASDAQ as part of a SPAC transaction next year. TJ, we'll talk to you down the line.

TIANYI JIANG: Thank you. Happy holidays.