17.4% - 26.9%
min - max equity offered
NZ$200,000.00 - NZ$350,000.00
min - max investment sought
min investment parcel
Hi Hayden, are you able to share your management accounts for the first quarter of 2015, or at least the approximate revenue?
It may be useful to see if this is showing an increase on the 2014 numbers and is on track for the forecast $1.4m in sales in 2015. In fact, getting a quarterly view of the numbers over the last few quarters might provide more insight on what the current trend has been (sometimes with annual figures it can be hard to see this).
Hi Rafael, our first quarter revenue is in line with last years. The last 2 quarters of 2014 were up on 2013. 70% of our revenue comes in the last half of the year, this is due to the cyclical nature of the tourism market. We havent been able to take on the additional sales people yet, once the funding is in place we will be able to . Thanks for your question, Hayden.
Replied to Rafael Kimberley-Bowen
I agree that you have a barrier to entry with the large base of rental agencies - Well done. This should provide a great base for future growth and being able to sell data via a mobile hotspot could be a real winner. I do however still have issues with the quote "TRNZ’s patented IP creates a significant barrier to entry". TRNZ does not hold any patented IP. This IP is owned by another company and you only have a license to use it. Some clarification on why this was set up as a separate company originally would also be good. How did TRNZ go down this path?
Thanks Glen, yes we believe our existing relationships and new technology will be an additional opportunity to grow the business and provide a great service. As to the quote, in isolation it does not cover the complete relationship but when read in conjunction with all of the material and as is clearly stated in the IM, the Patented technology is licensed by TRNZ. Thanks for your input. Hayden,
Replied to Glen Barnes
Hi Glen, TRNZ has the exclusive rights to use and exploit the IP in New Zealand, Australia and first rights for the USA territory (please refer to documents section for copy of License agreement). TRNZ is a licensee of the the IP. Dioptas AG is the owner of the IP, Patents etc (the Licensor). Dioptas has invested several millions over the last 8 years to develop the technology, the IP, the patents, and the associated infrastructure. So it is a straight Licensor/Licensee arrangement, similar to say the Honda Motor Company, where Honda Japan owns all the IP, develops new tech etc and has Licensed agents in various countries selling their products. Hope this clarifies things for you Glen. Thanks,
Replied to Glen Barnes
To answer questions posted in the media to clarify our position on the Competitive Landscape we have changed it to:
TRNZ has no direct competitors within their distribution network in the audio In-Car tourism space in New Zealand and Australia. While there is some indirect competition, TRNZ are the only one in the business to business market with built in advertising, in-car audio and exclusive partnerships directly with the motorhome, campervan and rental partners.
TRNZ management does not anticipate a potential competitor entering their exclusive distribution channels due to the large capital costs of setting up the unique content, the associated infrastructure costs and the patented IP.
TRNZ has many competitors in the mobile app space including, Mtrip, Tripwolf, GuidePal, GogoBot however the uniqueness of the content and the audio delivery makes the TRNZ product a leader in the mobile application space locally. TRNZ’s patented IP creates a significant barrier to entry in both apps and In-Car for any direct competition.
TRNZ has no direct competitors in the audio In-Car tourism space in New Zealand and Australia.
TRNZ management does not anticipate a potential competitor entering this market due to the large capital costs of setting up the unique content, the associated infrastructure costs and
the patented IP.
TRNZ has many competitors in the mobile app space including, Mtrip, Tripwolf, GuidePal, GogoBot however the uniqueness of the content and the audio delivery makes the TRNZ product a leader in the mobile application space locally.
TRNZ’s patented IP creates a significant barrier to entry in both apps and In-Car.
Hayden Braddock - TRNZ CEO
I note in the IM, Mark Alloway is noted as a co-founder in TRNZ but does not have a shareholding.
Does anyone else involved with TRNZ have a shareholding in Dioptas?
Hi Craig, Mark Allewell and myself have a 12.5% shareholding each in Dioptas. No one else in TRNZ has a shareholding. Thanks,
Replied to Craig Jakich
Why have you earmarked $100k from the capital raise for R&D when any new IP will be owned 100% by Dioptas? Will they re-imburse you for any R&D to the extent it is successful/improves their IP?
In how many other countries is the Dioptas IP being used?
Hi Craig, re the R&D and IP. Firstly the 100k is to speed up the R&D process, secondly TRNZ will get all the benefit of this by project managing the process and thirdly this cost is offset by the reduction in license fees that TRNZ pay Dioptas, previously 10% of revenue and now 5% for the next 5 years, resulting in savings to TRNZ of $400-500k. Dioptas' IP is used in NZ, South Africa and Spain. Thanks,
Replied to Craig Jakich
Who owns the 2,500 devices currently in use in New Zealand? Is there any payment for the use of those units?
Going forward, are you intending to own all new devices in NZ? (I note $100k of the capital raise is earmarked. For new units)
Hi Craig, TRNZ own the devices and lease them to their distribution partners for zero cost, the partners provide the devices to their customers complimentary. Going forward TRNZ will own the devices and lease to partners under the current zero cost lease or possibly charge them for the devices. Under our business model we are making it as easy as possible to create a user base which then drives revenues from advertisers. So between our InCar devices and Mobile Apps (all provided to the user free of charge ) this creates the user base. Thank you.
Replied to Craig Jakich
Hi Hayden, the relationship with Dioptas is not clear, perhaps it would be beneficial to provide further clarity around this in your online pitch. Going forward is the value of the company as a sales vehicle rather than a technology platform- clarification would be appreciated. Would further value of future enhancement of the technology patents sit with Dioptas rather than this opportunity?
Hi Angela, TRNZ is a Licensee of Dioptas and has full rights/license to use and exploit the IP, patents and Tech in NZ, Australia and first option on the USA. TRNZ is a sales and marketing company primarily, however there is a lot of input and direction in developing new tech which is driven by TRNZ. New developments to existing IP sit with Dioptas and TRNZ has full rights to exploit and use these new developments. Any new tech developments made by TRNZ outside the core IP that Dioptas owns would sit with TRNZ. So this opportunity is about scaling up the business which will be driven by more sales people and increased marketing. At the same time we will speed up the tech development by project managing the new InCar product. Hope this clarifies things for you, thanks.
Replied to Angela Dixon
Hi Hayden, I can't see a reference to pre-emptive rights on issues of new shares. Do these shares have pre-emptive rights attached?
Hi Callum, there are no pre-emptive rights on the issue of new shares. Shareholders are protected on the basis that directors can only issue shares if they are acting in the best interests of TRNZ. Also if shares are issued at less than fair value, then the consent of all shareholders is required for such an issue. Also, standard minority oppression rights apply if the board were to unfairly act against the interest of minority shareholders. Thanks,
Replied to Callum Stewart
There has been no licensing fees to date however there will be in the future. Can you explain what these licensing fees are? Have the patents been stripped out of the company to Dioptas Holding AG and then licensed back or did Dioptas Holding AG previously not charge any licensing fees?
Are the patents really defensible? It seems like this is geo-fencing with cached data? Can you explain why this is different to what is built in to Android and iOS?
Hi Glen, thanks for your question. Dioptas has charged licence fees in the past and will continue to do so, the prior years were paid and offset for the cost of development and creating content. Moving forward we have negotiated a 5% fee. Please see the documents section for the Licencing Agreement details. TRNZ pays these for the rights to use the patents, IP, tech etc. The patents will be defensible, a lot of money has been spent on them by Dioptas using a very reputable German Patent Attorney. Our patents and tech are a type of geo-fencing like you say, however there is a lot more to the tech than that, in particular how the layers of audio information play based on location and priority, for example a point of interest overides general area content as you approach it. Thanks,
Replied to Glen Barnes
Tourism in New Zealand is a $66 million per day industry, there were 2.7 million international visitors to New Zealand last year, International tourists spent $9.8 billion and domestic tourists spent $14 billion. Tourist spend is forecast to hit $41 billion by 2025 (Source: Tourism New Zealand).
Tourism Australia recorded 6.5 million international visitors in 2013, International tourists spent $28 billion and Domestic tourists spent $70.1 billion in 2013. This is forecast to be $115 billion by 2022 (Source: Tourism Australia).
THE IMMEDIATE TRNZ MARKET:
Motorhome and campervan tourists spend $547.2 million each year on accommodation, attractions, activities, fuel, groceries and retail shopping. TRNZ have a direct in-vehicle presence to access this market with their In-Car product.
TRNZ gives local businesses access to these tourists as they are travelling towards their venues. No other advertising medium can do this. By promoting their offerings through TRNZ, the businesses are reaching a captive audience and have a very powerful advertising tool to strongly influence how the tourists spend their money.
This is an untapped opportunity as the market is currently significantly under penetrated by the TRNZ sales team (due to the team being under resourced in historical years). A portion of the funds from this capital raising will be used to scale top line sales through a larger (proactive) sales team selling aggressively into this market.
The specific target market for the TRNZ products falls into three distinct areas, all driven around the mobile traveller. These include:
- Rental car, motorhomes, tourism operators, local tourism authorities, who are able to target the end user.
- TRNZ has partnerships with motorhome and car rental operators, travel and car booking websites. In-Car goes out with every hire to create user base.
- Who use the smart technology to distribute their marketing on a geo-location basis
- Any tourism business, activity, product that is targeting the mobile traveller
Tourists (end user):
- Who listen to the TRNZ In-Car devices and indirectly also listen to the advertising for places they are approaching
- The rental car and motorhome traveller who wants to experience the journey at their own leisure
TRNZ has no direct competitors within its exclusive distribution network in the audio In-Car tourism space in New Zealand and Australia. While there is some indirect competition in the business to consumer space, TRNZ is the only operator in the business to business market with built in advertising, In-Car audio and exclusive distribution agreements directly with the motorhome, campervan and rental partners.
TRNZ management does not anticipate a direct competitor entering its exclusive distribution channels due to the large capital costs of setting up the unique content and the associated infrastructure and technology costs.
TRNZ has many competitors in the mobile app space including, Mtrip, Tripwolf, GuidePal and GogoBot however the uniqueness of the content and the audio delivery makes the TRNZ product a leader in the mobile application space locally.
The technology used by TRNZ when combined with their existing exclusive distribution network equates to a barrier to entry in both the apps and In Car for any direct competition.
*This section has been updated to further clarify the market position
This investment will be used to expand its sales force locally and prepare the business for expansion into Australia. Management believe this will result in revenue growth compounding by 50% year on year, providing solid returns to shareholders.
The advisory and management team have based the financial forecasts of the business on their strategic plan for the coming two year period. Aaron Ridgway (lead Angel investor in this round of financing to TRNZ) is playing a very hands on role in assisting management execute on the expansion of the business and will be spending considering time with the team to ensure this eventuates in the short term.
Management is very confident that this expansion will deliver very positive results for TRNZ in the coming 12-month period.
Management have prepared three different forecast scenarios to demonstrate potential returns for shareholders coming in on the Equitise round. This is depicted in the tables below as "MID CASE" (expected management forecasts), "HIGH CASE" (favourable forecast of top line revenue) and "LOW CASE" being a lower than anticipated forecast. Management have provided a detailed breakdown of these forecast variations in the documents section of this Equitise offer.
TRNZ have been operating successfully in New Zealand for the past 7 years. As outlined in this online investment summary (and in further detail within the downloadable investment document), the business is using its newly acquired capital from this round of investment to expand and scale its operations in both New Zealand and Australia.
Given the company's unique product offering, the size of the market it operates within (and huge upside within the market it is yet acquire), and the patented technology it provides its users, TRNZ management believe that it will be a highly attractive bolt on acquisition target for a larger players in the market looking to invest in a sustainable, low overhead technology business.
Senior management believe there are a handful of strategic aligned businesses that would find TRNZ a very attractive investment once it has scaled its operations within 3 - 5 years.
The attractiveness of TRNZ for potential takeover is the reason why Aaron Ridgway approached Hayden Braddock (TRNZ CEO & Managing Director) to lead the current investment round and be a part of the business in the coming years.
Tourism Radio detailed IM (updated)
Audited Accounts (signed 2013)
Constitution (20 January 2015)
Loan agreement (signed)
License agreement (signed)
Management Accounts (balance sheet 2014)
Management Accounts (profit and loss 2014)
Returns sensitivity (detail)
NZ Patent Report
TRNZ Patent Overview
No documents added in this section
The investors below have committed capital to the business in this funding round.