Flick Electric raises more money to fund fast growth
Online electricity retailer Flick Electric has raised a further $5 million from existing shareholders to fund its New Zealand growth, taking its total capital raising in the past two years to $15 million.
The Wellington-based company, which won the New Zealand Hi-Tech award for most innovative service in May, offers electricity directly at fluctuating spot market prices.
Under the capital raise, cornerstone shareholder community-owned Eastland, which owns the Gisborne area electricity network, lifted its stake to 16.7 percent from 11.1 percent while original investor Evander Group’s stake was maintained at 9.2 percent. The latest share offer values the fledgling company at about $30 million.
Flick chief executive Steve O’Connor said it was pleasing to have the offer fully subscribed by existing shareholders who were “clearly heartened by the progress we’ve made and our strategic positioning”.
The fast-growing Flick now has 12,000 customers, having acquired more than any other electricity retailer in the first half of this year. Its growth has been enabled by the roll-out of smart meters nationally, particularly in urban areas.
The start-up is still not profitable and O’Connor said in May when customer numbers were 10,600 that it was around a third of the way to hitting the numbers needed to reach break even.
O’Connor stepped down from the board in May when two new directors were appointed to broaden the board skill set – Eastland Group chief executive Matt Todd and Simon Robertson, former chief financial officer of Auckland International Airport.
“Both new directors have extensive experience managing large, complex businesses and their skills are essential to drive Flick through its next growth phase,” chairman Marcel van den Assum said.
Some of the new capital will be spent on further developing the technology platform, particularly with an eye to enabling it to be rolled out in other countries. O’Connor has been scoping offshore markets for potential expansion but says that’s unlikely to happen until next year.
Flick is still trying to figure out the best way to expand overseas, and O'Connor said one option would be licensing the technology to existing retailers.
“It’s within our plans but we have to stage the timing of that. It’s critical to prove the proposition here and be doing that well,” he said.
Flick’s customers would have felt the main brunt of a price spike in the wholesale electricity market on June 16 that saw prices as high as $4,000 per Megawatt hour.
O’Connor said he was comfortable with both the way the market worked and the way customers managed the price spike through tools Flick provided to monitor the cost and their power usage.
“We’ve not had one that big in three years,” he said. “A lot of our customers responded to that well and although the price squeeze saw savings drop, we still achieved a positive 4 percent average savings on that day.”