This was published 4 years ago
'White hot space': Getswift finds investor fans in the US
By Colin Kruger
The stench of Getswift’s legal battles has not worried a brace of US investors who have dived in as the stock finally gains traction with customers.
“This is a white hot space,” said Charles Frischer, a Seattle-based private investor who emerged with a 5.4 per cent stake in the last mile logistics provider on Tuesday.
Being based in the same city as Amazon's global headquarters has given Mr Frischer an appreciation of the growing demand for deliveries and the appeal of a software-as-a-service logistics company with a low entry point.
Getswift makes money by working out the best delivery route to for its clients like Red Rooster to their customers, the so-called last mile of delivery.
Former AFL player Joel Macdonald started his business career as the co-founder of Liquorun.
“The product is really terrific and its a low-cost product,” Mr Frischer told the Sydney Morning Herald and The Age.
Getswift shares rose above 40¢ on Tuesday - the first time it has traded above that level since January - having hit a low of 15¢ in June.
I can understand how it happens without malicious intent.
Mr Frischer said he became aware of Getswift after talking to another US investor, Cleveland Ohio-based Clutterbuck Capital Management, which emerged with a 7.5 per cent stake in July.
Mr Frischer said he is particularly pleased with the recent contract wins around the world.
In May, Getswift announced a deal with Kuwait-based The Kout Food Group, which operates the local franchises for Pizza Hut, Taco Bell, and Burger King.
Getswift said the deal was "not material at this stage."
In July, Getswift also signed up MCR, operator of the Pizza Hut franchise across Pakistan.
More recently, Getswift announced a deal with Heineken International with its platform currently in use by the beverage group in Malaysia and Egypt.
"The total value of the agreement cannot be determined at this time because it is subject to utilisation take-up and any additional deployments," Getswift said last month.
“It’s nothing now, but it could be a big deal in the next two to three years,” Mr Frischer said of the Heineken deal.
It was questions over the status of its customer contracts that led to the former ASX darling - started by AFL footballer Joel Macdonald - falling from grace last year.
Its share price crashed in February last year, from $2.92 to a low of 98¢, after the company revealed that fewer than half the contracts it had been publicising were actually generating any revenue.
A class action law suit followed.
In February, the Australian Securities and Investments Commission (ASIC) started legal action against the company and Mr Macdonald and fellow director Bane Hunter over these same customer agreements, claiming statements it made to the ASX "were misleading, and that it failed to notify the ASX of material information in relation to these client agreements".
Getswift's vast cash reserves will be needed as it vigorously defends itself and its executives against the legal battles.
"I'm not interested in revisiting what happened, but I can understand how it happens without malicious intent," Mr Frischer said of the allegations.