Deals Within Reach: From critical minerals to healthcare and everything in between
By the time Friday afternoon comes around I’m usually fused – unpleasantly – to the keyboard.
Pleased to say, that routine ended abruptly when Reach Markets invited me to their investor lunch.
And so it was with some excitement and little trepidation I found myself upstairs at an invitation-only lunch in a splendidly boutique hotel housed in an 1890s steel plant, thwack in the center of Sydney.
I wasn’t alone.
Joining me at The Establishment for insane canapés and all sorts of quality drinks was the most eclectic gang of CEOs, entrepreneurs, wholesale, sophisticated – and unsophisticated – investors from what’s actually an absurdly fabulous network of like-minded obsessives.
I’m enjoying myself. The room is tight with people I’ve been trying to suck secrets out of for the best part of a decade.
I was surrounded by fascinating business with Foot-in-the-Elevator investment theses – laid out in glorious detail. And their various plans for what seemed to us as imminent global domination.
I’d almost forgotten what a joy it is to watch seed companies looking for a little water and sunlight in a room full of cashed up investors. And I was reminded of the wonderful breadth and technicolour of Aussie investors.
Between entrée and dessert, we did Artificial Intelligence, Renewables, Medtech, Tech Tech and Critical Minerals. Huge digital presso’s, lots of oohs and aahs. Bootleg data, unpublished and off-the-record nuggets of info I can’t really talk about. And Great Scott: The food and drink.
VP Minerals, meldCX, the Mine Discovery Fund are presenting. There were others and it’d be remiss not to mention – aged care tech company CarePage, health and wellness distributor Wellnex Life (ASX:WNX) and Indonesian gold/copper explorer Far East Gold (ASX:FEG) along them.
Nor the Q&A with Alta Global Group founder and CEO Nick Langton, whose vision is to piggyback the global Mixed Martial Arts (MMA) global entertainment thing into a fitness and lifestyle brand and participation platform.
“The sector is poised for incredible growth as interest in MMA at the mass entertainment level surges globally,” Langton says.
Alta just bought fitness app Steppen. They now have their heads firmly down on madly cutting customer acquisition costs. Setting the stage – Langton reckons – ‘for a tech-driven revolution enabling MMA gyms, coaches, and participants to foster deeper connections.’
Steppen is a former Apple Top 5 App with a 500k download history and a loyal youth demographic. All part of Alta’s ambitious plan ‘to advance its technology capabilities and better serve the vast global martial arts and combat sports sector.’
Graham Howard gets the ball rolling with: “I like to say – you’re on the ground floor entering the elevator on this project.”
First up, the elephant in the room – VP Minerals was spun out of rare earths explorer VHM (ASX:VHM) They are backed by the Perth billionaire and human mineral compass Chris Ellison. In fact, the very first question flung in the direction of VP, was why Ellis was involved with a north-west Victorian focused mine explorer-developer with a portfolio of (admittedly high-value) rare earth element (REE) and mineral sand prospects.
The answer to which Howard replied – Ellison’s eye for returns is simple – he’s a deliberate, long-term strategic investor.
VP Minerals’ tenements in Victoria’s Murray Basin are surrounded by several rare earth mineral sands projects such as Iluka’s Balranald and Wimmera, WIM’s Avonbank and VHM’s Goschen projects.
The VP team originally focused on making the company the next success story in Victoria’s rich gold history, but pivoted when they also found high-grade, near surface targets of rare earth minerals, zircon and titania. Graham believes this could put VPM among the lowest cost deposits in the district.
Ellison has assembled a board of mining executives, including some of his top lieutenants with experience from the likes of MinRes and Newcrest to bring VP to fruition.
That’s why Albo’s in Washington right now.
And why he’ll be in Beijing in about 8 days time – rare earth elements are top of every global government’s ‘Critical Minerals’ list. Howard is sitting on a giant, (truly giant) shallow, home-grown, world-beating pile of the hitherto China-controlled elements absolutely essential to modern technologies, economies and national security.
China enjoys a high degree of control over the rare earth market and pricing – and Beijing has lately proven itself a big fan of using economic leverage to get what it wants – disruption has been a tool of diplomacy under President Xi Jinping.
One of the big reasons Western nations are keen to invest in resources in other jurisdictions, Howard says is the absolute importance of building downstream processing – and eventually – a whole supply chain which is not reliant in anyway on the unreliable battery metals powerhouse that is Xi’s China.
From rare earths to health…. CarePage describe themselves as a market leader in helping Australian families with the critical challenge of finding the right aged care provider.
We all know the Australian aged care sector is ripe for change. It’s large but highly fragmented leading to poor transparency, consistency and consumers in need of advocacy.
The scope of this challenge is sizable and growing, with over 200,000 Australians living in aged care homes and the over-85-year-old cohort set to triple in the next four decades.
CarePage has been using a buy-and-build strategy to own the entire value chain in the large but underserved aged care market – from initial search through to placement. They already own the top two ranked search websites and boast a media audience of over 3.6 million. CarePage’s recent acquisition gives them access to providers representing over 50% of aged care beds in Australia.
So, the screens, the speakers, the canapes, the companies all set up by Reach Markets, who I haven’t heard of before. I thought, very interesting, and worth a little looksee….
Their main activity is in connecting investors and investments – usually (not always), very early stage local businesses with more than a hint of the multi-bag.
On the investor-side there’s been a constant flow of surprisingly (even if you know and love small caps) unexpected and diverse deals on the hook.
On the company-side, from what I can tell, they’re like embedded management consultants. Providing the corporate advice, the strategic direction as well as all the talent, tools of the trade access to capital, liquidity, networks and even the reputation these kind of companies need to get what they want.
And Reach make everything happen in-house. They’ve got the bankers, the networks, analysts, comms, processes, technology… yeah. The tech is a big part of their pitch.
Basically, what may’ve started as corporate advisory firm somewhere out of Melbourne – raising equity, hybrid and debt capital for such listed and unlisted Aussie companies, (typically with a market cap between $10m and $300m) is morphing into a simpler but far broader idea – I don’t know what you’d call it – not 360 degree – it seems more… more spherical.
Anyway – from my seat they do everything, up and downstream of the deal.
And apparently, since the idea first struck – about a year before the global pandemic did – Reach Markets pumped out 80+ investment rounds/capital raises. And standing by for the largesse has been some 185,000+ “self-directed private investors, focusing on fast-growing globally significant businesses.”
That’s according to the MD and Founder Patrick Nelson, who it seems didn’t leave much behind when he ditched ‘a successful stock broking, corporate finance, funds management and trading education business’ to start Reach in 2018.
“Using technology to reduce a company’s cost associated with attracting and engaging with investors and raising capital; while helping to improve the quality of investors’ decisions and their access to opportunities.”
Nelson is a pretty fascinating guy. Actually, the entire Reach executive team is a good read – tight, with all the deal disciplines covered.
In hot demand for a chat from the lunchers was David Sellars, who heads up their Equity Capital Markets team and has been with Reach from the start. This man’s network is no joke and he seems to play a major role in connecting investors with the deals that Reach is getting out.
I had the pleasure of arriving with Exec Director Christian Riedel – not everyday you get to bump into a graduate from the exclusive University of St Gallen in Switzerland.
As we rode up together, he laid out the Reach grande strategy elevator-style: “Everything we do is centered around making it easy for companies and investors to connect with each other.”
The main takeaway is just this – there’s nothing like the face-to-face. Investor, start-up or punter.
Glad-handing, getting to look a company, an idea or as person in the eye – and up and down – is good. And fun.
And incomparably valuable.
This article was developed in collaboration with Reach Markets, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.