Oversubscribed capital raise by
very large sophisticated investors and instos. Company expected to raise $20M, but due to oversubscription, raised $24M. The AFR just published an article on the raise.
EXTREMELY EXCITING TIMES AHEAD:
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The ASX-listed tech start-up founded by former Melbourne AFL player Joel McDonald, GetSwift, has raised $24 million,
bringing on a range of new US-based investors including top-tier institutions, family offices and hedge funds.
The big raise for the delivery management software provider comes just six months after it went public on the ASX, raising $5 million.
Major backers in the round include IFM Investors, Thorney Investment Group and Regal Funds Management.
Since listing at 20¢, the company has risen 330 per cent to 86¢, despite only posting $113,815 in revenue in its half-year results to December 31.
It's strong share price performance has been driven by a series of major deals secured in the last few months with companies such as the Commonwealth Bank of Australia, Red Rooster's Australian parent company Craveable Brands and Pizza Hut.
Mr McDonald said the company had to raise a large round to meet the demand it was receiving from international companies, and to help accelerate the value of the business, as he believed the start-up had become an acquisition target.
"We're getting indications from a lot of different angles that larger companies are testing us out in different markets subtly, and trying to get information about us and also testing our employees out to see if management are open to an aquisition," he said.
"It's really positive, but at the same time it's a threat if an offer is made too early when we think it's a multibillion-dollar opportunity."
The GetSwift delivery management software optimises routes and tracks deliveries for corporate fleets. It claims to let businesses "dispatch like Uber, track like Dominos and set routes like Fedex".
Like fellow logistics businesses Shippit and Sendle, Mr McDonald expects the business will benefit locally from the arrival of Amazon.
Companies are able to sign up to the platform with no upfront cost, but it generates revenue by charging a fee on each transaction.
A standard transaction fee is 29¢, but for large enterprises it does negotiate lower rates if they are able to guarantee a minimum volume of transactions, amongst other factors, this lowers the average transaction fee to about 20¢.
New growth phase
GetSwift executive chairman Bane Hunter, who formerly held executive roles at a range of media companies including Foxtel and A+E Television Networks,
said the company had originally set out to raise $20 million, but the round was oversubscribed and the $24 million raise would catapult the businesss to the next level.
"We are experiencing parabolic growth and it's not just occurring in Australia, but outside of Australia," he told
The Australian Financial Review.
"We went ahead with this raise because of the opportunities we have and the investors that are coming forward. There had been one concern expressed from potential customers and that was how, if we only had $5 million in the bank, could we take on the work and scale by a quantum of 20 times."
Looking ahead, GetSwift also intends to expand into more verticals including health, manufacturing and defence. It expects to start seeing substantial revenue jumps from the deals it's won, but said it would come in "spikes", as the technology is implemented at the major companies.
Like Australian tech success story Atlassian, GetSwift also does not invest in sales and marketing. Its growth to date has been organic and it does not employ a single sales person.
It also runs on a lean model. Its operating costs only amounted to $318,676 in the six months to December 31, and while the company has less than 20 staff currently, Mr Hunter said the company had capped its total headcount for the foreseeable future at a maximum of 40 people.
"We have very low overheads. We have zero sales people and from a modelling perspective we don't see ourselves having more than 40 staff ever," he said.
In its early days GetSwift went through the BlueChilli accelerator program as an alcohol delivery business called Liquorun, but since then Mr McDonald has been a vocal critic of the program and its management, believing the 25 per cent stake the firm took in the business was exploitative.
Mr McDonald and BlueChilli chief executive Sebastien Eckersley-Maslin have also butted heads over who was responsible for the pivot from Liquorun to GetSwift, which was the underlying logistics platform of the business.
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