Last Updated on August 27, 2025 by Jason Andrew
What is the best homegrown Aussie business I’ve ever seen?
It’s not a mining company.
It’s not a bank.
It’s not a telco.
I’ll die on this hill: it’s the vertical software company Wisetech global.
Why do I say this?
Because in 1984, two Australian software engineers tried to automate shipping logistics. Little do they know it, they stumbled into an absolute goldmine.
3 decades later, Wistech is worth over $33bn dollars, and generates ~$1bn in annual revenue.
Up 24x since IPO in 2016, Wistech is still putting up 25%+ YoY revenue growth with lots of room to run.
No VC funding, no startup hoodies, no TED talks. Just huge, sticky enterprise software contracts and 50%+ EBITDA margins.
So how did Wisetech go from a software challenger to an industry heavyweight?
Let’s break it down.
What is Freight Forwarding?
Wisetech is a logistics software company that helps freight forwarders manage their supply chain, from origin to destination.
But I know what you’re thinking.
What is freight forwarding?
‘Freight forwarders’ are people that move goods from one location to another with automating paperwork, customs clearance.
Companies with the goods are called ‘shippers’. The owners and operators of container vessels and aircraft are called ‘carriers’.
But shippers and carriers typically don’t strike deals directly.
Instead – freight forwarders act as intermediaries. They are effectively ‘travel agents for freight’.
Forwarders purchase space on ships and planes from carriers at wholesale rates – then they bundle together cargoes from many small shippers to fill that space at retail rates, earning a margin.
The forwarders earn their margin by acting as efficient counterparties for carriers, while providing customer service for shippers – quoting rates, arranging door-to-door solutions, handling paperwork and compliance.
What is Wisetech?
This is where Wisetech comes in.
If you’re a freight forwarder, you could run your entire business on paper and phone calls, managing thousands of documents to make sure all of the cargo space is booked, delivered, clears customs and passes through international ports.
Or you could use Cargowise.
CargoWise – wisetech’s core product, has a quasi-monopoly on the software that manages freight forwarders.
Everything that freight forwarders do can be handled by CargoWise in some fashion.
Wisetech focuses mainly on owning the management between the freight and the port, shown in purple below.
On top of the core capabilities, Wisetech’s accounting and financial reporting is also very valuable, providing an overview of how profitable every customer and transaction is, which can be useful for eliminating unprofitable business lines.
Blue Chip Customers
If you’re a who’s who in the freight forwarding industry, chances are that you use WiseTech’s platform.
CargoWise counts 42 of the top 50 3PL providers in the world as customers, and 23 out of the largest 25 global freight forwarders.
In the words of Analyst Roy Van Keulen, “They used to say nobody got fired for buying IBM. In the freight forwarding business today, you can replace IBM with CargoWise”.
As a business, CargoWise has a strict policy of no customisation of their customers. If the pain point is big enough, it will be incorporated into the software and served to all customers.
In house solutions are also notorious for failing. Nippon Express, Panalpina and DHL Global Forwarding all lost over $100m each in their failed builds, before resorting to using CargoWise.
In DHL’s case, they are thought to have spent $1bn on their failed system, using IBM to try to build a fully functioning environment on top of SAP, before accepting defeat and signing up to Wisetech as customers.
Rolling out CargoWise in these businesses takes ages. Years. The software is currently being rolled out for Fedex and Nippon express, amongst other big names.
But that means once these businesses run on CargoWise, it’s unbelievably sticky. CargoWise has had <1% churn annual churn every year for the past 12 years.
For context, according to Lenny’s Newsletter, having <1% monthly churn rates is considered good for an enterprise SaaS company, let alone <1% annual churn. This is absolutely ridiculous.
Pricing Power
Pricing power is the hallmark of any great business.
And WiseTech has it in spades.
CargoWise passes on ~6-10% annual price increases to their users every year, in combination with rolling out new products.
What’s more, CargoWise claims that ~70% of their FY24 revenue is generated by their top 300 customers. So I got curious, what does the core CargoWise product cost?
Well at ~$880m in revenue, that implies that their top 300 customers are each paying ~$2.05m each. Wowzers. These are huge contracts.
Financials
97% recurring revenue. <1% annual attrition. 32% free-cashflow margin.
Wisetech is printing money.
Wistech Execs sitting on a $30bn fortune
The business has grown 10x over the last decade, from ~$75m in FY16 to $800m in revenue in FY25. Almost venture-esque you could say.
And not only that, but over that period, EBITDA margins have improved considerably, from ~31% in FY16 to ~50% today. Frothing…
Their balance sheet is extremely clean too, with basically no debt.
You rarely see a publicly traded software company run this efficiently, and it speaks volumes to the power of applying a bootstrapped mindset to larger businesses.
The only thing hard to stomach about WiseTech is the valuation.
The stock is priced to perfection – trading on a ~32x revenue multiple. When you can buy NVIDIA on 24x revenue – this starts to feel pretty expensive…
I suspect this is likely a symptom of being a global leader listed on the ASX, with very few Australian names able to provide this level of quality to investors down under.
Using M&A To Fuel Growth
WiseTech have done a boatload of acquisitions since its inception. And it paid off big time.
Acquisitions themselves have contributed roughly 1/3rd to total revenue growth over the last 10 years.
Since IPO, they have bought 53 businesses.
On average, they have been doing acquisitions at ~2.2x revenue multiples, well below the 32x revenue multiple where Wistech trades today.
Most of these deals are very small (<$50m) but strategically important – smaller software players that offer parts of a solution which may be useful to the overall Wisetech platform.
Most of the deals involve some earnout consideration to incentivise management post acquisition.
They bolt them on, integrate them into the Cargowise platform and expand their offering to customers.
This M&A strategy has allowed the business to expand into new geographies where there are differences in the logistics market – acquiring Bysoft in Brazil, Prolink in Taiwan, and ABM in Ireland, just to name a few.
Financially, there is a huge arbitrage here. Buy recurring revenue from smaller players. Bolt it into the bigger company. Let the stock price rip.
But the other reason M&A has been incredibly useful for WiseTech is that it has allowed them to get a stranglehold on the market. Having scoured Reddit asking about competitors, there appear to be very few globally.
There is Descartes Systems Group, (~A$15bn), Manhattan Associates (A$17bn), as well as offerings from SAP and Oracle, but Cargowise is by far the market leader.
I suspect that by using such an aggressive M&A strategy, they stifled businesses that would otherwise be more meaningful competitors, but also made it more difficult for their large customers to stitch solutions together. This is particularly because many freight forwarding companies will often use a handful of technology companies in their ‘tech stack’.
Interestingly, they’ve started to turn to larger deals more recently, acquiring Envase for ~$400m in cash upfront in 2023.
Moats
Buffett has a quote:
“You should buy businesses so good that an idiot could run it, because sooner or later one will.”
Well, I think this is one of these businesses.
I’m not going to comment on the recent scandalous events surrounding Wisetech’s CEO, Richard White.
But my point is, there is almost nothing that could stop WiseTech at this point. It’s a true monopoly.
Over the past 5 years, they have invested nearly $1.1bn in R&D. 62% of the employees at the company work directly on the product. If you want to go after WiseTech – you would have to spend billions.
I think the only company that could potentially threaten them is Flexport, a late-stage tech enabled Freight Forwarder with best in class technology run by Ryan Petersen. If they decided to spin out their software, they could compete directly with WiseTech and offer a solution that potentially rivals their offering.
But even then, WiseTech’s churn speaks for itself. Once this software is implemented, it’s so hard to rip out.
What’s more – they seem to have a data moat.
Wisetech claims that their software touches 55% of global manufactured trade flows. This is an extraordinary amount of data.
This data allows them to find problems for the customers that other people couldn’t possibly see – deep within the logistics supply chain.
“The aggregate of all of the data is becoming much more powerful. We can find areas of the supply chain that aren’t working properly, and unblock these problems” – Richard White
What’s Next for Wisetech?
All in all. Wisetech is an absolute cracker of a company.
There aren’t many businesses out there of this quality, especially not in Australia.
But can they continue to grow at such aggressive rates going forward?
Most of the analysts think that the business still has lots of growth left with the major freight forwarders given how long the integration period is, meaning revenue doesn’t ramp up for a few years after they sign.
In the meantime, they will continue to push into adjacent markets in customs clearance, and expand their land based logistics offering. Logistics is such a huge market globally, it feels like the sky’s the limit for Wisetech.
What’s more, they just announced a ~US $2.1bn acquisition of a listed logistics software company e2open.
To date, Wisetech has spent about US $1.2bn on acquisitions since their inception, so this is a material step up compared to anything they have done previously. E2open has been struggling historically, but there’s no reason to think Wisetech can’t turn it around based on its track record.
