This story has been updated with details of Swoop’s first day performance. 

Today, there’s a new telco that has joined the ASX in Swoop Telecommunications (ASX:SWP) and it is chaired by James Spenceley.

Spenceley is no stranger to ASX land, sitting as chairman of Airtasker (ASX:ART) as well as being the founder of large cap telco Vocus (ASX:VOC). Since February, he’s been a director at Kogan (ASX:KGN).

Swoop raised $20 million in a deal that was reportedly 15 times oversubscribed. It is listing from the ashes of Stemify (ASX:SF1) which was a US-based diversified tech company.

Swoop operates one of the largest fixed wireless networks with 246 towers across all Australian states. It is a combination of Swoop Telecom and NodeOne, a WA based wireless infrastructure provider.

The company opened at over $1 per share representing a gain of over 100 per cent.

Swoop (ASX:SWP) share price chart

 

Previous ASX telco listings have also been a hit with investors.

The most recent was Perth-based Pentanet (ASX:5GG) which is up over 200 per cent since listing and is the best IPO of 2021.

Victorian consumer telco Aussie Broadband (ASX:ABB) listed a few months prior in 2020 and has nearly tripled since its debut as its continued growth in user numbers impresses investors.

18 months earlier saw the listing of Opticomm (ASX:OPC) which more than tripled before being snapped up by Uniti Group (ASX:UWL).

Uniti also listed in 2019 and grew from 25 cents to $3.06 today off the back of acquisitions.

Stockhead caught up with Spenceley on the eve of Swoop’s listing.

 

How did you end up at Swoop?

“The business was called Cirrus communication and was one of the earliest wireless telcos so they were a customer of mine in the Vocus days – I think one of the first 10 customers we ever signed,” Spenceley said.

“So I’d known and followed them for a long time and after being at a telco for a while – I caught up with them in 2018-19 and I really saw a lot of opportunity with network they had and I saw an opportunity to leverage it with some sales skills and so that’s how I got involved.

“I invested in the business around that time and I got Tony Grist, a colleague of mine from the Vocus days – he invested as well.

“We were trying to raise a bit more more capital and he then suggested we introduce the business to Tattarang, the family office of Andrew Forrest.

“We met with CIO John Hartmann and then quite happily Tattarang took the entire raise themselves.

“So that sort of kicked off the growth phase and then I’ve been on the board since then and we’re listing tomorrow.”

 

What makes Swoop stand out from other telcos?

“We’ve certainly got we believe – but you can never have these things totally verified – the largest wireless networks, they own towers and infrastructure around the country in all mainland capital cities.

“And also quite a high degree of value in outer-metro and regional areas, which is an area I think is probably underserviced.

“I think it’s one of the more interesting wireless providers in a time the NBN could be performing a bit better in some of those areas. We think that’s our differentiator and how we compare.”

 

Why choose a reverse listing rather than an IPO? Does it take faster than a traditional IPO?

“No, it ends up taking more time now days than doing a front door.

“But we wanted to buy a company over in the West Coast called NodeOne and that was one of the vendors there was connected with the shell, so rather than sell to us and we go list, it became an easier transaction for the three parties to do.”

 

How has it been inside the telco industry in the last 12 months?

“I suppose the telco space has had a lot of competition since forever and a day since I was involved in the 1990s – there were 800 different ISPs for most of that time.

“I think when I started Vocus there were 3-400 ISPs. So there’s probably less competition now and much more centred around 4-5 players with Aussie [Broadband] being the most recent to grow into that couple of hundred thousand subscriber club.

“Aussie’s just done it and they’ve expanded significantly, competing with Telstra, Optus, TPG and Vocus so I think that’s a pretty good indication that there is a market for a challenger and a differentiated challenger.

“We’re going into a couple of new areas – Pakenham and Geelong in Victoria – we’re double the speed of the NBN for a same price.

“So there’s enough disruption with technology and I think there’s customers who give a less large organisation some business.”

 

How’ve you found listed life for Airtasker?

“Well it’s defiantly more eventful in the last couple of months; we’ve seen our share register turn over multiple times in a day.

“That’s been exciting but the acquisition last week of Zaarly was I think a huge coup and really exciting so that keeps the business going and jumpstarts it in the US. We’re excited and happy about that.

“So listed life has been pretty eventful for Airtasker –  I don’t know if it will be for Swoop but watch this space.

“I think it’s suiting us well at Airtasker enabling us to accelerate our international growth plans which is what I think most people are excited about – the Australian business is excellent but can we do it overseas?”

 

A Fairfax article last week reported Zaarly as “acquisition that failed Ashton Kutcher and Demi Moore” – what would you say to that?

“I think there’s a lot of businesses we acquired at Vocus that were pretty stagnant – not growing and not making money potentially but we took them on.

“So I think it’s all about what you can do in the business, not what the business has done itself.

“And we think of this problem of how do you start a marketplace in a foreign country – we don’t have either customers or taskers. This gets us a long way towards a jump ahead. So, for us it was an excellent acquisition.”

 

You recently joined Kogan as a director? How’ve you found it?

“Kogan’s a fantastic business.

“I think Kogan grew from about $450-$500m in turnover to $900m in the space of 12 months and I think what’s people may miss about that is the guys managed to cope with that. (They’ve) managed to deliver double the number of goods they were delivering with basically no notice and during coronavirus.

“I have huge amount of respect for Ruslan [Kogan], David [Shafer] and the team and what they achieved and the core of the business is strong and the brand is second to none in the country.”

 

Tech stocks have been under share price pressure recently and there’s been speculation Afterpay may leave. Do you hold hope that the ASX can be an exchange for good tech stocks?

“I think there’s almost a correlation now; US tech stocks sneeze and ASX tech stocks get pretty crook.

“I don’t know there’s exchange [you can move to] to avoid that. There’s synchronisation nowadays of asset movements.

“I think the great thing about Australian exchange is that we’re an Australian company and that means a lot. When Tim and I talked about who to list with, it was Australia first.

“I think the ASX has done a good job, all things considered, with keeping tech companies here. We thought it was important to be listed here and it’s worked well for us, I think.”

 

Are you proud of what you achieved at Vocus and do you watch the company?

“Yeah, absolutely.

“It was a $5m business acquired by Macquarie – they could see the value in the assets, the fibre in the ground. I always look to Vocus very fondly.”

 

Do you think you’ll be able to juggle your commitments at all these companies?

“I work as chairman of Airtasker, non-executive director of Kogan and Think Childcare (ASX:TNK). Think Childcare is in the process of a scheme of arrangements to be acquired – that frees up a bit of my time.”

“I love working, I love working hard, I’ve got a fair bit of experience in the listed space and the telco space.

“It doesn’t feel like work to me.”

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