Waislitz backs plan to delist potential unicorn Updater

Billionaire investor Alex Waislitz will support a move by fast-growing technology firm Updater to delist from the ASX.

Alex Waislitz predicts Updater could achieve ‘unicorn’ status

Billionaire investor Alex Waislitz will support a move by fast-growing technology firm Updater to delist from the Australian Securities Exchange to pursue funding from Silicon Valley venture capitalists and investment funds.

Updater, a New York-based company that offers services to help people in the US update their details when they move house, will seek shareholder approval to delist from the ASX even though its shares have risen almost sixfold since its December 2015 float.

Mr Waislitz predicts that the move could even see Updater, which has market capitalisation of about $680 million, achieve “unicorn” status — a valuation of $1 billion — and that other Australian-listed tech firms could follow suit, continuing the trend of tech companies raising money privately at the expense of public markets, where the number of floats is falling.

“Provided management continues to deliver, I would expect to see them raising hundreds of millions of dollars at a valuation of $US1bn ($1.4bn) or more in the near future. If they succeed we may even see other similar ASX-listed companies following in their footsteps,” Mr Waislitz told The Australian.

“Reopening Updater to US technology funds to turbocharge its expansion plans in the US makes a lot of sense given the huge amount of liquidity that now exists in the US private tech investment market.”

Rich-lister and co-founder of listed education group Navitas, Rod Jones, also threw his support behind the strategy via his Hoperidge Capital investment company.

“We have been investors in Updater every step of the way, including before its float, and are very pleased with the progress of the business so far, and are happy long-term owners of the company,” said Hoperidge chief investment officer Jon Biesse.

While smaller in value, Updater’s move looks set to follow the same path as billionaire Tesla co-founder and chief executive Elon Musk, who wants to take the electric-car maker private in a $US10bn transaction that may include Saudi Arabia’s government investment fund.

Mr Musk has cited the demands of lodging regular financial results with the markets and attacks by short-sellers on his stock as reasons to delist Tesla from the Nasdaq.

Updater’s move also comes as one-time market darlings such as GetSwift have plunged in value on the ASX this year.

Updater, which counts former Domain boss Antony Catalano as a director and young rich-lister Grant Schaeffer as a major shareholder, yesterday told the market it would hold a special meeting for shareholders in early September.

Its directors will stay on after it privatises, as will shareholders such as Mr Waislitz and Mr Jones. The company will launch a $10m buyback for any shareholders who want to sell out as part of the transaction. While its has increased sixfold in value in almost three years since its float, Updater shares have fallen about 14 per cent since January 1.

“Updater has recently attracted significant interest from numerous major international (non-Australian) financial investors and strategic parties that have expressed strong interest in purchasing stock directly from Updater as a private company not listed on ASX,” the company told the market.

Founder and chief executive David Greenberg said that the Updater board’s unanimous view was that a delisting was in the best interest of shareholders as “our market penetration in the US has resulted in Updater emerging as a market leader in the multi-billion-dollar US relocation technology market. Accordingly, we have received significant interest from a number of enthusiastic potential investors.”

The company said it was on track for revenue of $US19m to $US23m annually.

Updater’s technology allows users to forward mail, update accounts and records, and transfer utilities and other services when they move.

The company told The Wall Street Journal earlier this year that Updater sent invitations to 15 per cent of people who moved in the US in the previous year, including 18 per cent of movers in the most recent quarter. Between 30 per cent and 40 cent of those invited used it for their move, the company said.

Mr Waislitz’s listed investment company Thorney Technologies has been a shareholder in Updater for several years and owns several other listed companies, as well as privately held start-ups in Australia and abroad.