Thorney Group’s timely swoop on Spacetalk

Spacetalk watches have had some success in a market dominated by Apple.

Alex Waislitz’s Thorney Group has moved to almost a quarter stake in smartwatch minnow Spacetalk after scooping up the shortfall shares from a recent capital raise.

Thorney’s Tiga Trading now holds 23.8 per cent of the company, up from 19.9 per cent, after tipping $220,000 into a recent $2.7m capital raise, then picking up another $247,000 in shares as sub-underwriter.

Spacetalk is a textbook fixer-upper, valued at less than $10m and with a string of nasty – for its size – losses in recent years.

On the other hand, it has board depth that belies its stature and a new chief executive hoping to make a silk purse out a sow’s ear.

The board includes former South Australian premier Mike Rann, who spent a fair chunk of his post-politics life as high commissioner to the UK, but is understood to now spend much of his time in Puglia, Italy.

Tech entrepreneur Georg Chmiel chairs the company, bringing experience from former roles such as chief financial officer at REA Group and current non-executive roles at Centrepoint Alliance and PropTech.

Former Thorney employee Martin Pretty, managing director of Equitable Investors, is also a director while former Nearmap chief executive Simon Crowther is managing director. Founding managing director Mark Fortunatow got his marching orders in late 2022, Crowther coming in early this year.

The company started its listed life primarily as a technology company offering a product schools could use to check in students and notify parents of absences and the like via SMS.

More recently it has focused on wearables for children, with its Spacetalk watches achieving some success in a market dominated by Apple.

The company is targeting $20m-$25m in annual recurring revenue within three years, mainly via an evolution from a wearables sale model to a wearables and software subscription product that allows parents to track and communicate with their children.

The recent capital raise is aimed to take the company through to a positive cashflow scenario from the second half of FY24, a recent presentation says.

In mid-September the company updated the market with a forecast of “at least” 80 per cent revenue growth for the first quarter, from $1.5m up to $3.3m.

It said subscriber numbers were forecast to exceed 16,300 by the end of the quarter, and revenue from device sales expected to increase by almost 400 per cent. The stock closed at 2c on Friday.