Updater raises $50m, targets 35pc market penetration
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Updater chief executive David Greenberg said he is targeting 35 per cent of the US home moving market within the next few years. Supplied
Listed property relocation startup Updater has raised $50 million to finance the acquisition of moving software companies IGC Software and Asset Controls.
The major capital raise follows the company hitting a significant milestone in August, achieving 15 per cent market penetration in the United States.
Updater chief executive David Greenberg told
The Australian Financial Review it hit this goal five months ahead of schedule and the company was now turning its attention to growing its market share to 35 per cent in the next few years.
"We always said 15 per cent was the goal because at that scale we could start reinventing the moving experience," he said.
"Such a large percentage of American households are now going through our platform that we can go to the biggest marketers and service providers and get them to integrate directly into our platform so movers can find insurance, or book their removalists in one place."
The integration with service providers is a key component of Updater's monetisation strategy, as it will require providers to pay to be included on the platform.
The capital raise, which was first reported by Street Talk, took the form of an institutional placement of 40 million CHESS Depository Interests, which are used to allow foreign companies to be traded on the ASX.
Institutional investors such as Fidelity and Thorney Investment Group continued to support the company and bought into the raise. The company is also backed by SoftBank Capital, IA Ventures and Commerce Ventures.
Mr Greenberg, who is formerly a corporate attorney, started the business after moving house eight times and consistently getting frustrated with all the phone calls he had to make in order to make it happen.
"I had the original idea seven years ago when I was moving homes and I had created a list of 15-20 businesses I had to reach to make it happen," he said.
"There were so many and it amazed me there was no platform to let me complete those tasks."
Updater's share price has leaped more than 221 per cent in the last six months, going from only 42¢ to $1.35.
For the six months to June 30, the company reported $US505,017 of revenue, up 196 per cent, and a net loss after tax of $US5.7 million. It also had $US27.5 million in cash.
But the company's major revenue generating initiatives are only just beginning, as Mr Greenberg wanted to achieve significant market penetration before targeting businesses in order to demonstrate the platform's value.
In June Updater secured a nine month pilot program with major US telco AT&T. If it is successful, AT&T will integrate with Updater.
Mr Greenberg said the company had made the decision to acquire IGC Software and Asset Controls because it wanted providers movers with transparency into removalist prices, pick-up and delivery process.
"We considered a partnership, but we figured it was such a core feature int he Updater platform for the consumers to be able to see, book and schedule their move, it was best for us to own that software," he said.
"If we weren't integrated into the backend systems of removalists, it would be a difficult experience to build and we identified those software companies as the leading firms."
