Company Overview

Touch Ventures is an Australian investment holding company that deploys capital into high-growth, scalable investment opportunities, primarily in retail innovation, consumer, finance, and data segments.

Investment Strategy

·      Builds a concentrated portfolio of 8-10 growth-stage companies over 3-5 years.

·      Targets investments of $10M-$25M for core portfolio companies.

·      Allocates up to 5% of the portfolio for early-stage investments (<$2M).

·      Holds non-controlling equity stakes (10%-40%) but may take a controlling interest in some cases.

Key Investments

Refunddid – An instant returns platform for shoppers providing refunds to consumers before their items are returned to the merchants.

Preezie – An Australian eCommerce technology company that provides an online guided selling customer engagement platform

Ordermentum – is a digital ordering and payment platform for the wholesale food and beverage industry

Sendle – A carbon-neutral digital courier service targeting eCommerce SMBs in Australia and the U.S. 

Key Risks Associated with Investing in Touch Ventures Limited (ASX: TVL)

Based on the financial reports and company updates, the key risks associated with investing in Touch Ventures include: 

1. Investment Performance and Valuation Risks

·      Asset Write-Downs: Touch Ventures recorded a net loss of $15.4 million in FY23, largely due to markdowns on investments such as PlanPay (written down to nil) and Till Payments (fully impaired).

·      Market Volatility: The company’s investment portfolio is highly sensitive to market fluctuations, which can impact valuations and potential returns.

·      Exit and Liquidity Risks: Many investments are in unlisted companies, making it difficult to liquidate holdings at favorable prices.

2. Economic and Market Risks

·      High Interest Rates & Inflation: Economic conditions in 2023 were challenging, with elevated interest rates and inflation impacting consumer spending and business performance.

·      Valuation Compression: The broader tech and fintech sector has seen valuation corrections, affecting Touch Ventures' potential for capital appreciation.

3. Portfolio-Specific Risks

·      Dependence on Portfolio Companies: The company’s success relies on the performance of a small number of high-growth investments (e.g., Sendle, Postpay, Refundid, Preezie). Any underperformance could significantly impact the company's financial position.

·      Failure of Key Investments: PlanPay's write-off and the exit from Till Payments highlight the risk of unsuccessful investments.

4. Cash Management and Capital Deployment Risks

·      Cash Burn vs. Investment Strategy: While the company has $58.2 million in cash reserves, it must strategically deploy funds to generate returns while managing expenses.

·      Limited Investment Pipeline: Capital deployment slowed in 2023, with only $7.0 million invested across four deals, highlighting challenges in finding high-quality opportunities.

5. Governance and Shareholder Risks

·      Significant Shareholder Changes: Block Inc. (Afterpay's parent) recently sold a 19.99% stake in Touch Ventures, which could impact strategic direction and investor confidence.

·      Discount to Net Tangible Assets (NTA): The stock trades at a significant discount to its NTA ($0.15 per share vs. $0.07 share price as of Dec 2023), indicating weak market sentiment.

·      December 2024 investment in Reshop US$6.6m (approx. A$10.6m) Launched in 2024, Reshop is a US retail technology company on a mission to make returns more valuable for shoppers and retailers by powering instant customer refunds. Reshop offers customers the freedom to use refunds right away, which helps retail merchants drive improved customer satisfaction and increased recapture. US consumers can wait weeks to receive refunds after making a typical return, though with Reshop users benefit from receiving refunds immediately, giving them greater control and confidence to shop again, which helps drive additional revenue and reduce costs for merchants. Reshop is backed by Anthony Eisen and Nick Molnar, co-founders of Afterpay, alongside a list of highly influential investors, including Matrix Partners, Sound Ventures, Mantis VC and others. Anthony and Nick, Reshop’s largest investors, are participating in this round as follow-on investors. https://announcements.asx.com.au/asxpdf/20241223/pdf/06cz7wv5wsm615.pdf

·      December 2024 Investment in Tixel $4.5m - Founded in 2018 in Melbourne, Victoria, Tixel is one of Australia’s leading live entertainment ticket resale platforms. The platform helps fans to buy or sell tickets for a large variety of live events including music concerts, festivals, theatre and sport, ensuring a secure, trusted and efficient ticketing experience. https://announcements.asx.com.au/asxpdf/20241202/pdf/06c4k9drljx1ms.pdf

·      September 2023 PlanPlay written its investment to Zero!! https://announcements.asx.com.au/asxpdf/20230908/pdf/05tnxlzmtm8qq8.pdf

·      March 2023 Sale of investment in Basiq to Cuscal Limted. Total consideration of $13.29m https://announcements.asx.com.au/asxpdf/20230310/pdf/45mjfk89wrhpx4.pdfhttps://announcements.asx.com.au/asxpdf/20230329/pdf/45n4bjl06pynv5.pdf

·      November 2021 investment in Prezzie A$4.5m - preezie is an Australian eCommerce technology company which provides an online guided selling customer engagement platform. preezie enables retail merchants to significantly enhance sales conversion and customer experience by helping customers discover products and offering personalised product recommendations. https://announcements.asx.com.au/asxpdf/20211123/pdf/4538rh756zyhz4.pdf

·      November 2021 investment in Till Payments A$5m - Till Payments is an Australian founded and headquartered payments fintech company which provides a single-source solutions platform enabling its customers to accept payments on any device and wherever consumers shop, be it online, in-store or a combination of both. https://announcements.asx.com.au/asxpdf/20211105/pdf/452mb55n7z9fqr.pdf

·      September 2021 investment into Refundid $1.0m, Refundid is an instant returns platform for shoppers providing a full refund to consumers before their items are returned to the merchants. Refundid's merchant proposition is to maximise customer retention and increase gross sales. Refundid generates revenue by charging merchants a percentage fee per transaction. https://announcements.asx.com.au/asxpdf/20210927/pdf/450xkwvh4tjj8r.pdf

Market Cap $55.9m (10/02/25)

Management Bio's

Board

Michael Jefferies - Independent, non-executive Chair

Michael has 30+ years of public company experience including that he was previously the Chairman of Touchcorp Limited and a non- executive director of Afterpay Limited. Michael has extensive experience in finance and investment including more than 20 years as an executive of Guinness Peat Group plc, an international investment group that listed on the major stock exchanges in London, Australia and New Zealand. 

Michael is a Chartered Accountant and Fellow of the Australian Institute of Company Directors, has a Bachelor of Commerce degree. 

Glenn Poswell - Independent, non-executive Director

Glenn is the founder of Gannet Capital, a boutique investment company focused on investments that provide compelling risk reward opportunities for investors. Glenn is a co-founder of Victor Smorgon Partners, Centennial Asset Management and is a member of the U.S. based Marcy Venture Partners Advisory Committee. 

Previously, Glenn was a Founder and the Chief Executive Officer of Ellerston Capital Limited, and prior - Deutsche Bank’s Asia aci ic Head of the Absolute Return Strategies Group. 

Jim Davis -Independent, non-executive Director

Jim is the founder and portfolio manager of Woodson Capital Management, a global fund manager with a focus on the consumer and technology sectors. Woodson Capital's flagship long/short fund (one of the Woodson Funds) launched in January 2010 with a seed investment from Tiger Management where Jim previously served as an Analyst. The Woodson Capital Entities act as investment manager and general partner to the Woodson Funds, a substantial Shareholder of the Company. 

Jim graduated from Davidson College and received a Masters of Science in Accounting and an MBA in Finance from Wake Forest University. Jim currently serves as a Trustee for two private philanthropic foundations: Tiger Foundation, based in New York City, and the Margaret C. Woodson Foundation in North Carolina. 

Sophie Karzis - Independent, non-executive Director

Sophie is a corporate and commercial lawyer who is experienced in the areas of equity capital markets, mergers and acquisitions, and corporate governance for ASX-listed entities. Sophie acts as non- executive director and company secretary and general counsel for a number of ASX-listed and unlisted entities. 

Sophie is member of the Law Institute of Victoria and the Governance Institute of Australia, has a Bachelor of Jurisprudence and a Bachelor of Laws degree, and is based in Melbourne. 

After four and a half years, the CEO of ASX-listed VC fund Touch Ventures is swapping venture investing for private equity.

Hein Vogel is leaving Touch Ventures for Hg Capital. Sendle.

Institutional investors in the listed venture capital fund set up by Afterpay have urged major shareholder Gannet Capital to take fresh steps to unlock value following the departure of the vehicle's CEO. 

Hein Vogel, CEO of ASX-listed Touch Ventures since 2019, will leave the business at the end the week after he and the board "reached a consensus on his departure" following a multi-year market beating for the fund.

The Touch share price is down to less than 8 cents, well down from when it traded at 47 cents a share following its October 2021 listing. The fund privately values its portfolio of companies at $50.9 million, having effectively written off more than half of its initial investment. 

Vogel is set to join Hg Capital, a global private equity firm targeting tech buyouts. The banker confirmed his career move to Capital Brief but did not answer subsequent questions or phone calls. 

His departure comes two months after Ganett Capital became the largest single shareholder of Touch when it bought a 19.99% stake from Block, which in turn had inherited the position from Afterpay after acquiring the buy, now pay later platform for $39 billion in 2022. 

Led by Glenn Poswell, Gannet had been expected to shake up Touch as long-term fund managers called for him to "wind the fucking thing up" and return capital to shareholders as the company's public valuation sunk below its own cash balance.

Poswell, now an independent director, has promised to update the market at its AGM in early May. Most expect the fund will unveil a new, more conservative investment strategy in an urgent bid to regain the confidence of shareholders. The fund still has around $60 million in remaining cash to deploy.

This is Afterpay's venture captial arm that was spun out into an ASX listed company from what I understand.

Trading at $0.14 or about $96M in MC.

Claimed NTA of $0.265 per share of which $64M or $0.09 per share in cash.

The rest being the below investments valued by them at $131M which the market obviously doesn't believe or is ignoring.

Wouldn't know if any of the investmetns are worth anything but highlighting if anyone was interested. They are buying back shares now.