Thursday 05 November 2020

GLX: Rise and Rise of Perth's 'Canva'

Tech bolter's bold play

An LNG-focused trading platform that is fast becoming Perth's tech equivalent to Canva is making plays to branch out into other commodities during a year of exponential growth.

It's been an extraordinary time for GLX Digital, which has defied the odds during the coronavirus pandemic to hire 20 people locally in the past 12 weeks and plans to more than double its workforce in the next 12-18 months.

The Subiaco-based company is growing at such a rate that it took over the office next door just two weeks ago, increasing its total floor space from 250sqm to 600sqm.

And it's not just GLX's physical presence that is on the rise - an ASX or Nasdaq listing could also be on the cards at some point, but chairman Mark Barnaba said it was not an immediate priority.

"We are not closed to opportunities, but we're not driven for an exit," Mr Barnaba, also a Reserve Bank of Australia Board member and Fortescue Metals Group's deputy chairman, said.

"If you left it to our own preference we would simply go down the path of growth for at least two to three years ... you'd also have to ask yourself where is the right place to list."

GLX was founded in 2015 by Damien Criddle, a lawyer of 20 years who specialised in LNG commodities and offlake contracts. The company was created as an online auction hub for the trading of spot LNG cargoes but has since pivoted its business model to focus on helping customers build their own digital trading systems.

GLX's software enables commodites companies to work on a single source of truth, ensuring all elements of a digital transaction are facilitated in one place that gives them privacy of data.

More than 75 of the world's leading energy companies have signed up to GLX, which has taken off this year after locking down investment from several heavy hitters.

LNG giant Royal Dutch Shell and Andrew Forrest's private investment arm Tattarng took stakes in the company in July as part of a landmark raising, which followed an earlier investment from Woodside Petroleum.

Woodside more recently contracted GLX to build a digital system to manage its $1.5 billion commodities portfolios, including LNG and oil cargoes.

Revenue has increased by the hundreds of percentages. We've never had a balance sheet like we have today. - GLX chair Mark Barnaba

But despite being a home-grown success story, Mr Criddle said the company was better known in international circles than in its own backyard.

"Being based in Perth and having most of the major commodities down the road, it makes sense for us to start talking to people locally and increasing our profile locally," Mr Criddle said. "So we are making a concerted effort to look into hard rock, soft commodities and talking to some parties now ... about moving into that area."

Lithium, grain, iron ore and metallurgical coal are few of the commodities that have been mooted.

Mr Barnaba said investment from Shell, Tattarang and Woodside had reshaped the company and given it a three-year runway despite an increased burn rate from hiring additional staff.

"Revenue has increased by hundreds of percentages. We've never had a balance sheet like we have today," Mr Barnaba said. "Our burn rate has increased but it will actually probably come down because ... even though we're adding lots of people, the revenue will now start to offset that."

Mr Criddle said the quality of customers paying that revenue was "as blue chip as it comes".

GLX offers two products: market-facing trading platform Connect, and internal company management software One.

The company has drawn comparisons to University of WA alumnus Melanie Perkins' graphic design start-up unicorn Canva, because of its meteoric rise in helping the $US22 trillion commodity market digitalise and replace costly physical sales processes.

Mr Barnaba said companies such as Canva and software giant Atlassian have shown that "you can build world-class technology software companies in Australia", but it's less likely to occur in Perth.

Mr Criddle said many companies, particularly after coronavirus, have realised digitalisation is no longer an option. "Competitors who aren't digitalising are going to lose their competitive edge," he added.

Woodside chief executive officer Peter Coleman said data analytics and speed of access to information was "becoming vitally important in increasing the transparency and efficincy of LNG trading markets".

Tattarang chief investment officer John Hartman said the company shared GLX's vision to support the digitalisation of commodity markets globally.

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