Andrew Forrest’s Tattarang, Royal Dutch Shell invest in GLX

Investments by Andrew Forrest and Royal Dutch Shell are expected to fast-track the growth of Perth-based commodity trading platform GLX.

GLX CEO Damien Criddle. Picture: Colin Murty

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Andrew Forrest’s Tattarang and international oil and gas giant Royal Dutch Shell have taken stakes in Perth-based GLX as part of a landmark raising by the commodity trading platform.

The funding breakthroughs means GLX, chaired by Reserve Bank of Australia board member and Fortescue Metals Group deputy chairman Mark Barnaba, will ultimately have around $20m in cash to its name.

The unlisted GLX aims to more than double its workforce over the next 12 months, having also secured contracts for its software platform that guarantee revenues for the coming years.

The new funding injection follows a pivot in GLX’s business model last year. The company originally developed a platform for the trading of spot LNG cargoes, but some players in the LNG industry, including Shell, held reservations about giving up control of data.

The group has now started licensing the software behind the LNG trading platform for the private use of companies, with Shell about to start trailing the system for its own needs.

Shell is the single biggest seller of spot LNG cargoes, accounting for between 30 and 40 per cent of the world’s uncontracted LNG volumes.

Mr Barnaba said he expected Shell’s move would also drive up interest in the system from other oil and gas players.

“If you’ve got the number one player that is willing to use your software, and has done that as an investment, then that should tell you something about the quality of the solution,” he told The Australian.

Shell’s arrival on the GLX register follows the earlier support of Woodside Petroleum, which also increased its investment in the latest raising. Billionaire investor Alex Waislitz is another long-term supporter of the company.

GLX founder and chief executive Damien Criddle said the funding support was a vindication of the shift in strategy towards software-as-a-service.

“What we’ve raised enables us to double our burn rate and triple our runway to several years, and that’s on the basis we don’t have any revenues. We do have revenues and the revenues will grow,” he said.

“We could have raised a lot more money than we did but we were quite selective in the amount we raised and who we brought in. We are pretty thrilled with the register we’ve got today.”

Tattarang chief investment officer John Hartman described GLX as “a compelling investment opportunity” that could find applications within Mr Forrest’s business empire.

“GLX Digital has established a blue-chip user base including the largest energy and trading companies globally. Beyond LNG, we foresee an opportunity to customise GLX’s software for other investments in Tattarang’s portfolio,” he said.

“We are also particularly pleased to support a Perth-based technology company.”

Mr Criddle said GLX had an aspiration to ultimately use its platform for iron ore and other hard rock commodities, but its more immediate priority was to move into other more complementary products such as oil, LPG, condensate and shipping.