NZX Listing Profile – TWL
NZX
Listing Profile
15 November 2021
Prepared in connection with the initial quotation of ordinary
shares in Trade Window Holdings Limited on the NZX Main Board.
Prepared pursuant to Listing Rule 7.3.1(b).
Key information
Summary
01
This profile document (“Profile”) has been
prepared in accordance with the NZX Listing
Rules, to support the initial quotation of ordinary
shares (“Shares”) in Trade Window Holdings
Limited (“TradeWindow” or “Company”) on
the NZX Main Board (“Listing”). Unless stated
otherwise, information in this Profile is provided
in relation to the Company as at the proposed
date of Listing (22 November 2021).
No Shares are being offered as part of the Listing.
However, Shares may be traded on market
after the Listing. Shares give you a stake in the
ownership of TradeWindow. You may receive
a return if TradeWindow increases in value and
you are able to sell your Shares at a higher price
than you paid for them. If TradeWindow runs
into financial difficulties and is wound up, you
will be paid only after all creditors and holders
of preference shares, if any, have been paid. You
may lose some or all of your investment.
What is this?
2
Founded in December 2018, TradeWindow is
an early-stage software company that provides
digital solutions for exporters, importers, freight
forwarders, and customs brokers to drive
productivity, increase connectivity, and enhance
visibility. TradeWindow’s software solutions
integrate to form a cohesive digital trade platform
that enables customers to more efficiently run
their back-end operations, share information and
securely collaborate with a global supply chain
made up of customers, ports, terminals, shipping
lines, banks, insurance companies, and government
authorities. Further details about TradeWindow’s
solutions can be found in Section 2 (TradeWindow
and what it does - Product).
TradeWindow serves leading organisations across
the dairy, meat, horticulture, seafood, consumer
products, manufacturing, and logistics sectors.
TradeWindow operates in the rapidly growing digital
trade segment of the TradeTech market. The World
Trade Organisation estimates that digital trade
solutions alone could reduce trade costs by 14.3%
and boost global trade by up to US$1 trillion per
year
1
. The Company is positioned to capture market
share through unique digital capabilities, high brand
awareness, and partnerships across the supply
chain ecosystem.
TradeWindow is the only player providing a
vertically integrated digital trade platform
covering compliance, operations management,
data sharing and storage, internal and external
stakeholder collaboration, and end-to-end supply
chain traceability. Data facilitated through the
platform can be re-purposed, providing the
possibility for future expansion by TradeWindow
into adjacent markets including risk management,
planning, and finance.
TradeWindow shareholders with a relevant
interest of 5% or more of the Shares on issue
include: ASB Bank Limited, 22.4%; Albertus
Johannes (“AJ”) Smith, 17.2%; Quayside
Holdings Limited, 7.9%; and Holding des Mers
du Sud, 6.1%. The balance of the Shares are
held by other early stage investors including
employees of TradeWindow. As at the date of
this Profile, TradeWindow has a total of 150
registered holders.
For more information, see Section 2
(TradeWindow and what it does).
1. https://www.wto.org/english/res_e/booksp_e/world_trade_report15_e.pdf
About TradeWindow
3
TradeWindow is undertaking a direct listing
on the NZX to enhance the Company’s profile
and reputation as a trusted partner for trading
organisations, shipping lines, port authorities,
financial institutions, and government authorities.
The NZX Listing Rules require that TradeWindow
maintain best practice governance and
operational transparency through the oversight
of independent directors and observance of the
continuous disclosure regime respectively.
TradeWindow employs subject matter experts
across commercial and technical disciplines.
The brand awareness and status that comes
from being a publicly listed company will help in
attracting and retaining the best available talent.
TradeWindow has acquired five businesses and
may acquire more in the future to accelerate
growth. TradeWindow may issue shares as
consideration for future acquisitions. Shares of
a public company can be traded providing the
vendor with a pathway to liquidity.
TradeWindow is not raising capital in conjunction
with the Listing on the NZX. Notwithstanding this,
TradeWindow may raise capital in the future.
Following completion of the Listing, TradeWindow will
have 86,031,600 Shares on issue, all of which will be
quoted on the NZX Main Board. Each Share gives the
holder the right to:
• attend and vote at a meeting of the Company,
including the right to cast one vote per Share on a
poll (subject to any voting prohibitions under the
NZX Listing Rules which may apply);
• an equal share with all other Shares in any
dividends authorised by the Company;
• an equal share with all other Shares in the
distribution of surplus assets of the Company in
any liquidation of the Company;
• receive certain information from the Company
(including its financial statements and its annual
report); and
• other rights as a shareholder conferred by
the Companies Act 1993 and the Company’s
constitution.
As described in further detail in Section 2
(TradeWindow and what it does - Other equity
securities of TradeWindow), TradeWindow also has
585,640 options on issue pursuant to its existing
employee share option plan. Provided that the exercise
conditions are met, each option is able to be exercised
for one ordinary share in TradeWindow. Following
Listing, TradeWindow will establish a new employee
incentive scheme that is appropriate for a listed issuer.
About TradeWindow’s
Shares
Purpose of listing
on the NZX
4
Total number of Shares on issue at Listing 86,031,600 shares
Financial year end 31 March
Expected Listing and quotation date 22 November 2021 under NZX code "TWL"
TradeWindow intends to quote its Shares on the
NZX Main Board. This means you may be able to sell
them on the NZX Main Board if there are interested
buyers. You may get less than you invested. The
price will depend on the demand for the Shares. The
only way in which a holder of Shares can realise their
How you can get
your money out
Listing statistics
and key dates
investment is to sell their Shares. If you sell your
Shares, you may be required to pay brokerage or
other sale expenses. You may also be liable for tax
on the sale of your Shares. You should seek your
own tax advice in relation to your Shares.
5
Key drivers of returns
Drivers of financial performanceKey strategies and plans
MARKET SHARE
The number of customers using the
platform, and the volume of international
shipments they make in a given period,
is a key driver of revenue.
• Investment in building a sales team experienced in solutions
sales targeting mid-market to large enterprise prospects across
New Zealand and Australia.
• Investment in online self-service capabilities to build a cost-
effective sales channel to reach Micro, Small and Medium sized
Enterprises (“MSMEs”).
• Investment in marketing to drive awareness of our brand and
capabilities across the supply chain ecosystem.
• Offer a comprehensive range of software solutions, each
designed to meet the needs of a specific market segment.
NEW GEOGRAPHIES
Rolling out localised versions of existing
products into new markets is a key driver
of revenue.
• Investment in localising existing software solutions to meet the
requirements of prospective customers. Localisation typically
involves language translation and integrations with the local
supply chain ecosystem partners including border agencies.
• Interoperability with Trade Single Windows
2
across Asia
creates bilateral digital trade lanes which deliver value to both
Australasian and Asian customers.
• Investment in establishing an agency network in Asia, including
partnerships with key ecosystem participants.
• Investment in establishing a presence in Chile to serve as a
beachhead into South American markets.
PRODUCT MIX
Expand and enhance TradeWindow’s
digital trade platform with both new
features and functionality, as well as
software solutions that deliver value
to other parts of the supply chain. New
products are key drivers of increasing
Average Revenue Per Customer.
• Investment in research and development to create a pipeline
of new features and functionality to cross-sell or up-sell to
existing customers.
• Strategic acquisition of solutions with complementary features
and functionality to cross-sell or up-sell to existing customers.
• Investment in a pipeline of products that enable entry into
adjacent market segments including trade finance.
2. Trade Single Window, a facility that allows parties involved in trade and transport to lodge standardised information
and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements.
6
You should read this table in conjunction with Section 2 (TradeWindow and what it does), Section 4 (TradeWindow’s financial information).
INTEROPERABILITY
Interoperability with regional digital trade
platforms or industry-specific software
solutions enables seamless transfer of
data from customers to their supply chain
ecosystem. This increases the utility and
usage of TradeWindow’s digital trade
platform, as trade volume processed is a
key driver of revenue.
• Investment in interoperability with members of the Pan-Asian
E-commerce Alliance to create ‘digital trading lanes’ between
member countries.
• Investment in interoperability with industry specific software
solutions used by banks, ocean carriers, port, terminal operators,
and logistics companies.
STRATEGIC ACQUISITIONS
TradeWindow will look to accelerate
growth through the acquisition of
incumbent software businesses with long
term customers, unique capabilities, and
significant recurring revenues.
• Buy into market positions that would otherwise take years to
build using an organic sales process. TradeWindow management
considers that the acquisition of incumbent solutions provides
a fast, relatively low risk and cost-effective way to consolidate
market share and enter new markets.
• Securing the supply of data drives network effects.
• Retention of talent from acquired businesses provides
immediate access to industry experts.
CULTURE
TradeWindow's strategy relies on
attracting and retaining highly skilled and
experienced subject matter experts from
both commercial and technical domains.
• TradeWindow initially recruited a skilled and experienced senior
leadership to establish a high-performance team culture. This
culture attracts the best emerging talent to the Company.
• Paid courses and on-the-job training provide employees with
the tools and support needed to define a career pathway best
matched to their ambitions, skills, and experience.
• High performance is supported with a focus on wellbeing.
TradeWindow employees are provided with paid health
insurance, flexible working arrangements and additional leave
days, among other benefits.
7
Investments in Shares are risky. You should consider
if the degree of uncertainty about TradeWindow’s
future performance and returns is suitable
for you. The price of Shares should reflect the
Key risks affecting this investment
Risk FactorsDescription
SECURITY
BREACHES AND
UNAUTHORISED
ACCESS TO
C U S TO M E R DATA
TradeWindow’s solutions involve the processing and the cloud hosting and storage, of
customers’ information, including confidential and proprietary data of organisations. There
is a risk that security breaches and incidents could result in potential enforcement action and
monetary fines from data protection authorities, litigation by customers, termination of customer
contracts, potential indemnity obligations and potential remediation costs. These could
materially impact TradeWindow’s financial and operating performance and financial situation.
The occurrence of such security breaches or incidents, or the perception that one has occurred,
could also result in a loss of customer confidence in the security of TradeWindow’s solutions or
damage to the TradeWindow brand and reputation, reduce demand for TradeWindow’s solutions,
disrupt normal business operations, and require TradeWindow to spend material resources to
investigate or correct the breach and prevent future security breaches and incidents.
REAL OR
PERCEIVED
ERRORS, FAILURES,
DEFECTS OR BUGS
TradeWindow’s solutions are used to run important processes for customers. There is a risk that
undetected errors, defects, failures, or bugs may occur in TradeWindow’s solutions, or certain IT
architecture especially when updates or capabilities are first introduced, or when new versions
or updates are released, which may make solution processing capacity or other use ineffective,
corrupt or unsuitable for the designed purpose, or incapable of scaling in line with customer
expectations. Further, TradeWindow’s solutions are often installed and used in large scale
computing environments with different operating systems, software products and equipment,
and data source and network configurations, which may cause errors or failures or may expose
undetected errors, failures, or bugs.
EMPLOYEE
ATTRACTION,
RETENTION
TradeWindow’s continued success is dependent upon its ability to attract and retain skilled and
qualified personnel, in particular, members of the senior leadership team, software engineers,
and customer success and sales teams with extensive domain expertise. The majority of
TradeWindow’s employees are located in New Zealand and Australia. Both of these markets have
a relatively small pool of candidates with enterprise software sector experience, exacerbated
by immigration restrictions caused by the COVID-19 pandemic. Supply issues coupled with
strong demand from a broad range of well capitalised businesses including banks, insurance
companies, professional services firms, and multinationals is increasing the cost of attracting
and retaining talent.
SUPPLY CHAIN
DISRUPTIONS
TradeWindow serves customers working on the front-line of global trade. Accordingly,
disruptions to their supply chains including, but not limited to, the availability of shipping
containers, the frequency of port calls and ship capacity, the frequency of flights and aircraft
capacity, bio-security incursions, port industrial action, and/or port infrastructure issues could
adversely affect the volume of shipments processed through TradeWindow’s solutions and
therefore revenues generated. Further, constraints in the supply of raw materials or components
could delay or stop production of goods, which could reduce the volume of shipments
processed through TradeWindow’s solutions. Prolonged supply chain disruptions could lead to
current and prospective customers leaving the market, resulting in a reduction in demand for
TradeWindow’s solutions.
potential returns and the particular risks of Shares.
TradeWindow considers that the most significant risk
factors that could affect the value of the Shares are:
8
This summary does not cover all of the risks of investing in Shares. You should also read Section 5 (Risks to TradeWindow's business and plans).
ECONOMIC
SHOCKS
TradeWindow’s revenue is highly correlated to the health of the economies in which it has
customers. Economic shocks are random, unpredictable events that can have a widespread
impact on the economy and can be caused by things outside of the scope of economic models.
The interconnected nature of global supply chains means that large shocks to either supply
or demand in any sector of the economy can have a far-reaching impact. TradeWindow’s
performance could be adversely affected by rapid and unexpected changes to macroeconomic
variables including, but not limited to, interest rates, commodity prices, household consumption,
labour markets, trade barriers and sanctions, pandemics, war, and terrorism.
OPERATING IN
COMPETITIVE
MARKETS
TradeWindow competes against a number of software vendors and service providers and, in
particular, global providers of freight forwarding, and digital trade software. New competitors
may enter the market in the future, or existing competitors may enhance their ability to compete
with TradeWindow, including for example, by improving their ability to capture data at source, to
securely process data at scale and the speed at which they do, or by increasing their focus on
user experience and workflow productivity.
COMPLIANCE
WITH LAWS AND
REGULATIONS
There is a risk that TradeWindow’s activities, including past, current, or future activities, may
have caused or cause it to inadvertently contravene laws and regulations in one or more of the
jurisdictions in which it conducts business. TradeWindow has offices, employees, and customers
in eight countries, therefore the Company is required to comply with numerous laws and
regulations including those relating to privacy, data protection, cyber security and other internet
regulations, anti-money laundering, employment and workplace laws, sales practices, securities
laws, and laws relating to requirements of corporations and preparation of financial information.
TradeWindow's operations are also affected by changes to laws and regulations relating to
anti-bribery and corruption, import and export control laws, tariffs, trade barriers and
economic sanctions.
INABILITY
TO PROTECT
INTELLECTUAL
PROPERTY RIGHTS
TradeWindow is a software business with a large proportion of the Company’s assets being
intellectual property. The value of TradeWindow’s business is, in part, dependent on the
Company’s ability to protect its intellectual property rights, including software code, business
processes, knowhow, copyright and trademarks. TradeWindow relies on such intellectual
property rights and there is a risk that it may fail to adequately protect its rights for a number of
reasons. There is also a risk that certain intellectual property may be obtained (or inappropriately
used) by third parties, for example, through breaches of agreements, fraud, or theft by
third parties.
STRATEGIC
ACQUISITION RISK
TradeWindow integrates acquisitions into the group and looks to cross-sell and up-sell to
the acquired customer base. There is a risk that acquisitions do not produce the forecasted
revenue benefits or cost synergies. TradeWindow’s performance is dependent on the efficient
allocation of capital into initiatives that generate positive returns. The allocation of capital to a
non-performing acquisition is at the opportunity cost of investing in an organic sales initiative,
marketing campaigns, or research and development projects. A non-performing acquisition may
result in the partial or complete write-off of the capital invested.
E A R LY- S TAG E
BUSINESS
TradeWindow is an early-stage software business operating in a nascent market. There is
a risk that the market moves more slowly than anticipated to adopt digital trade solutions.
TradeWindow’s performance depends on the widespread adoption of digital trade solutions
by mainstream exporters, importers, freight forwarders, and customs brokers. Lower than
anticipated adoption would mean lower revenues and a need to raise additional capital.
9
Capitalisation table
Number of Shares on issue at Listing 86,031,600
Estimated Listing price $0.92
Implied market capitalisation $79.1 million
Net cash
3
$8.8 million
Implied enterprise value (excluding lease liabilities under NZ IFRS 16) $70.3 million
Lease liabilities under NZ IFRS 16
4
$1.0 million
Implied enterprise value (including lease liabilities under NZ IFRS 16) $71.3 million
3. Estimated net cash as at date of Profile
4. Estimated lease liability as at date of Profile
The financial position and performance of TradeWindow is
essential to an assessment of this investment. You should
also read Section 4 (TradeWindow’s financial information).
Where you can
find TradeWindow’s
financial information
10
11
Contents
01 Key information summary
02 TradeWindow and what it does
03 Key features of the shares
04 TradeWindow’s financial information
05 Risks to TradeWindow’s business and plans
06 Tax
07 Where can I find more information
08 Contact information
02
14
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64
69
80
81
82
12
Dear Investor,
On behalf of the TradeWindow board, I’m
delighted to bring TradeWindow on the NZX.
TradeWindow is the developer of innovative
software solutions used by organisations working
on the front line of global trade. We’re proud to
facilitate trade for many of the organisations that
make up the back-bone of our economy.
Trade is the lifeblood of economies around
the world. Modern commerce is an extended
collaboration across an interdependent supply
chain executed over multiple time zones and
borders. Digital technologies enable organisations
to more easily overcome the challenges of scale
and distance to enter global markets. Our digital
solutions are designed to make trade more efficient
and secure, thereby enabling economic growth.
TradeWindow operates in the fast-growing
TradeTech market, comprised of the technologies
and innovations which enable global trade to
be more efficient, inclusive, and equitable. The
TradeTech market encompasses the hardware and
software solutions capable of transforming manual
processes to digital at each point in the supply chain.
TradeTech solutions are focused on the accurate
capture of data for re-use across a multitude of
processes including compliance, logistics, finance,
and insurance, all of which support getting a
consignment from A to B.
In the context of the COVID-19 pandemic, it
has become apparent that public and private
organisations alike can no longer rely upon
the paper-based processes that have long
characterised global trade.
I am personally excited about TradeWindow’s long
term growth strategy. TradeWindow’s track record
of innovation, high brand awareness, and supply
chain ecosystem partnerships positions the
business to reach global markets.
Led by Founder and Chief Executive AJ Smith,
TradeWindow has an accomplished management
team supported by a diverse and passionate team
of subject matter experts across New Zealand,
Australia, and Singapore. The team is committed to
delivering the vision of connecting all parties across
global supply chains to deliver trusted and seamless
end-to-end digital trade. In addition, we have an
experienced board of directors with extensive
experience in supply chain, technology, and the
finance sector and with listed company experience
that will assist TradeWindow going forward.
ASB Bank is the largest shareholder of TradeWindow
with a 22.4% shareholding. The balance of shares
are held by the co-founders and other early investors,
including employees.
TradeWindow’s board and management are excited
about offering you the opportunity to become
part of our future. This Profile contains important
information about TradeWindow. We encourage you
to read it carefully and consider in particular, Section
5 (Risks to TradeWindow’s business and plans) before
making your investment decision.
We look forward to TradeWindow becoming a
publicly listed company, and on behalf of my fellow
directors, I welcome your support of TradeWindow.
Yours sincerely,
Alasdair MacLeod
Chairman
Letter from
the Chairman
13
TradeWindow and
what it does
02
Founded in December 2018, TradeWindow is an
early-stage software company that provides digital
solutions for exporters, importers, freight forwarders,
and customs brokers to drive productivity, increase
connectivity, and enhance visibility. TradeWindow’s
software solutions integrate to form a cohesive
digital trade platform that enables customers to
more efficiently run their back-end operations, share
information and securely collaborate with a global
supply chain ecosystem made up of customers,
ports, terminals, shipping lines, banks, insurance
companies, and government authorities.
As at the date of this Profile, TradeWindow serves
approximately 380 leading organisations across
the dairy, meat, horticulture, seafood, consumer
products, manufacturing, forestry, and logistics
sectors including Synlait, Open Country Dairy,
Greenlea Premier Meats, ANZCO, Silver Fern Farms,
T&G Global, Sealord, Independent Fisheries, Cedenco
Foods, Whittakers, Pan Pac Forest Products,
Wallace International, Airwave Australia, Hanes,
and UB Freight.
Overview of
the business
14
TradeWindow operates in the rapidly growing digital
trade segment of the TradeTech market. The World
Trade Organisation estimates that the digital trade
solutions alone could reduce trade costs by 14.3%
and boost global trade by up to US$1 trillion
per year
5
.
Management believes that the Company is well
positioned to capture market share through unique
digital capabilities, high brand awareness, and
partnerships across the supply chain ecosystem.
TradeWindow is the only player providing a
vertically integrated digital trade platform covering
compliance, operations management, data sharing
and storage, internal and external stakeholder
collaboration, and end-to-end supply chain
traceability. Data facilitated through the platform
can be re-purposed, providing the possibility for
future expansion into adjacent markets including
risk management, planning, and finance.
TradeWindow’s solutions incorporate innovative
technologies including blockchain. Cloud-based
computing infrastructure provides customers with
the flexibility of being able to access the platform at
any time, from any location with internet connectivity
on a range of devices including desktop computers,
laptops, tablets, and smartphones. Solutions have
been designed to be industry agnostic and scalable
with different sized organisations from MSME to
large enterprise.
5. https://www.wto.org/english/res_e/booksp_e/world_trade_report15_e.pdf
Figure 2.0: How an exporter uses TradeWindow’s software solutions
1. PRODUCTIVITY2. CONNECTIVITY
3. VISIBILITY
The consumer scans a
QR code which reveals
data from TradeWindow
Assure that verifies the
apple's provenance
using the data captured
as it moved through the
supply chain.
Exporter uses
TradeWindow Cube to
share shipping documents
(data) with a shipping
line, border agencies,
and their customer. This
provides each party with
the information they need
to facilitate the physical
movement of goods.
An apple exporter
creates a set of shipping
documents using
TradeWindow Prodoc.
15
6. https://www.hyperledger.org/wp-content/uploads/2020/03/hyperledger_fabric_whitepaper.pdf
What is Blockchain?
Blockchain technology enables parties to establish trust and
securely transact over the internet. Everyone involved in a
transaction will know with certainty what happened, when it
happened, and confirm other parties are seeing the same thing
without the need for an intermediary providing assurance, and
without a need to reconcile data afterwards.
The two terms “blockchain” and Distributed Ledger Technology
(“DLT”) are often used interchangeably and to understand
blockchain, it’s important to understand DLT - the framework
that underpins it. DLT is a decentralised database managed
by multiple participants, across multiple nodes (computers).
Blockchain is a type of DLT where transactions are recorded
with an immutable cryptographic signature called a hash. The
transactions are then grouped in blocks and each new block
includes a hash of the previous one, chaining them together,
hence why distributed ledgers are often called blockchains.
TradeWindow uses Hyperledger Fabric, an enterprise grade
permissioned DLT framework that enables performance at
scale while preserving privacy. Permissioned DLT solutions
are maintained by authorised nodes and are accessible to
registered members only. Hyperledger Fabric is an open-
source solution supported by a community of contributors
comprised of world class technology providers including AWS,
IBM, Google, and Oracle
6
.
Figure 2.1: What is blockchain and why TradeWindow is using it
16
Why Blockchain?
The tamper-proof, decentralised nature of blockchain makes it
an attractive tool to break down the silos that hinder international
trade. Digital trade solutions underpinned by blockchain provides
all permissioned parties with access to the same information,
potentially reducing communication or data entry errors.
Blockchain solutions can streamline administrative processes
involving manual checks for compliance or credit purposes that
may currently take weeks.
Furthermore, blockchain can be incorporated into solutions
used to increase supply chain transparency. Blockchain enables
accurate end-to-end tracking of products, which can increase
confidence in end-market users by reducing or eliminating
counterfeit products.
It is anticipated that blockchain will be a key technology enabling
the next evolution of the internet, Web 3.0, the Semantic Web,
which centres on the capability of machines to read and
interact with content in a manner more akin to humans
7
. The
incorporation of blockchain in TradeWindow’s solutions help
future-proof the Company’s technology stack.
TRADEWINDOW HAS NO ASSOCIATION
WITH CRYPTOCURRENCY
TradeWindow is not a cryptocurrency, and
does not use or accept cryptocurrencies for
payment, or have any association with issuers of
cryptocurrencies.
7. https://www2.deloitte.com/us/en/insights/topics/digital-transformation/web-3-0-technologies-in-business.html
17
TradeWindow is an early-stage technology business with a global from day one mindset. The Company
has established a presence across New Zealand, Australia, and Asia, with offices in Auckland, Sydney, and
Singapore. TradeWindow employs 76 highly skilled subject matter experts with deep knowledge in software
development, cybersecurity, supply chain, sales and marketing, finance, customer support, and human
resources.
TradeWindow is an early-stage technology business
with a global from day one mindset. The Company
has established a presence across New Zealand,
Australia, and Asia, with offices in Auckland, Sydney,
and Singapore. TradeWindow employs 86 highly
skilled subject matter experts with deep knowledge in
software development, cybersecurity, supply chain,
sales and marketing, finance, customer support, and
human resources
8
.
Where we have customers
Remote staff
Offices
Auckland
Hamilton
Christchurch
Sydney
Brisbane
Melbourne
Singapore
Jakarta
TradeWindow’s
market presence
9. Full Time Equivalent employees as at 31 October 2021.
18
8. Full Time Equivalent employees as at 31 October 2021.
19
Company history
TradeWindow was founded on 3 December 2018
by AJ Smith, the Company’s CEO, and Kerry Friend,
Executive Director. AJ and Kerry came together over
a shared passion for harnessing technology to make
commerce easier, faster, and more secure.
Immediately prior to launching TradeWindow, AJ,
Kerry, and team had been conducting pioneering
research and development work on the commercial
application of blockchain technology. Early
progress on a digital identity solution attracted
the attention of ASB Bank, which led to admission
into the bank’s start-up incubator, ASB Edge. The
programme provided the opportunity to connect
with the bank’s leading export customers, providing
an understanding of their journey, capabilities, and
pain points. TradeWindow was conceived around
the application of existing R&D to solve a much
larger problem, removing laborious paper-based
processes from cross-border trade.
Over the past two years, TradeWindow has
experienced rapid growth spurred through
acquisitions of existing software businesses.
The acquisition of the assets of Prodoc Limited,
a trade document software business, kick-started
commercialisation by providing the Company
with a high-quality customer base with an average
customer lifetime of almost 10 years. Subsequent
acquisitions have provided a cost-effective way to
capture market share and build capability.
TradeWindow continues to make advances in the
development of new solutions while continuing
to make significant investments in technology,
talent, process improvement, sales and marketing,
customer support, and opportunistic acquisitions.
Key milestones in TradeWindow’s operating history
are summarised in the figure 2.2.
20
May
Exploratory phase – entry into the
ASB Edge programme.
June
ASB make $1 million ‘Angel’ investment.
November
Closed ‘Seed’ round capital raise of $2.67 million led by ASB.
February
Expanded into the Australian market.
February
Closed ‘Series A’ capital raise of $6.8 million led by ASB.
March
Minimum Marketable Product version of Cube released.
Acquired the remaining (49%) shares of Trade Window
Origin Limited.
October
Acquired customs clearance software solution from
Speedi Solutions Limited.
Acquired freight quotation software solution from
FreightLegend Limited.
May
Admitted into the SWIFT cooperative as a Non-Supervised
Entity active in the financial services industry.
November
Digital trade Proof of Concept working in
collaboration with Greenlea Premier Meats.
January
Minimal Viable Product version of Cube released.
Acquired enterprise export documentation software
solution from Prodoc Limited.
Acquired a controlling shareholding (51%) in IVS Origin Limited
(since renamed TradeWindow Origin).
June
Admitted into the Pan Asian E-commerce Alliance.
April
Acquired the Cyberfreight freight forwarding software solution
from Hi-Tech Freight Solutions (Aust) Pty Limited .
March
Expanded into Asia via Singapore.
October
Achieved interoperability between TradeWindow Cube
and Trade-Van, the Trade Single Window operator for the
Chinese Taipei border agencies.
December
Incorporation of Trade Window Limited.
2018
2019
2020
2021
Figure 2.2: TradeWindow’s key milestones
September
Closed ‘Series B’ capital raise of $15 million led by ASB.
21
Global supply chains are a network of organisations
working in coordination to facilitate the sale and
physical movement of goods across borders. Supply
chains are underpinned by three critical processes:
• the movement of goods;
• the sharing of information; and
• the provision of finance.
Figure 2.3: Types of flows in international supply chains
Goods are exchanged between buyers and sellers,
whether they are raw materials or final products.
Typically, the flow of goods is unidirectional,
from seller to buyer. Financial flows involve the
completion of payment, which is also usually
unidirectional, from buyer to seller. However, the
flow of information is more reciprocal among
the players in a global supply chain, involving the
exchange of information not only between buyers
and sellers, but also with the entire supply chain
ecosystem including ports, shipping lines, banks,
insurance companies, and government agencies.
What is a supply chain?
INFORMATION FLOW
BUYPAYSHIP
GOODS FLOW
FINANCIAL FLOW
SELLERBUYER
22
Many organisations still rely on manual paper-
based processes to orchestrate the exchange of
information. BCG, a global consulting firm, provides
some context of the complexity trading organisations
face: “a single shipment often requires more than 20
entities, and involves between 10 and 20 documents
and 5,000 data field exchanges
9
."
The information exchanged is sourced from the four
data silos that make up global supply chains:
9. https://www.bcg.com/en-gb/digital-ecosystems-in-trade-finance-seeing-beyond-the-technology
Figure 2.4: Typical trade documentation shared across the supply chain ecosystem
Sales contract
and trade
terms
Commercial
invoice
Packing list
Exporter
(i.e. shipper)
Exporter’s
bank
/ insurer
Export
customs/
Bio-security
ForwarderExport
port
Carrier
(air, ocean)
Import
port
Import
customs
Importer’s
bank
/ insurer
Importer
(i.e. consignee)
Certificate of
origin
Customer
value
declaration
Export
licenses /
certificate
Sanitary and
phytosanitary
certificates
House bill
of landing /
House
airway bill
Delivery note
Shipment
status
Master bill of
landing /
Airway bill
Shipment
status (e.g.
booking
confirmation
arrival
notification)
Port
declaration
Manifest
Shipment
status
Port
declaration
Manifest
Shipment
status
Customs
clearance
Import
licenses
/ certificates
Letter of
credit
procession
Purchase
order
Letter of
credit
Insurance
policy
Typical documentation issued
23
Global supply chains are complex networks of
organisations working in coordination to efficiently
move goods from producer to consumer. TradeTech
solutions provide supply chain participants with
the tools needed to be faster, more flexible, more
accurate, more resilient, and more efficient.
TradeTech solutions are capable of transforming
manual processes to digital at each point in the
supply chain.
The TradeTech market can be divided into seven
segments: (1) supply chain finance; (2) trade finance;
(3) Know Your Customer (“KYC”); (4) insurance; (5)
digital trade; (6) shipping and logistics; and (7) other,
which includes solutions that do not neatly fit into
any of the other segments
10
.
TradeTech
Market
SUPPLY
CHAIN
FINANCE
OTHER
SHIPPING
& LOGISTICS
TRADE
FINANCE
DIGITAL
TRADE
INSURANCE
KYC
10. https://www.wto.org/english/res_e/publications_e/blockchainanddlt_e.htm
Figure 2.5: Overview of the TradeTech market
Overview of the
Tr a d eTe c h m a r ke t
24
SIZE AND GROWTH OF THE TRADETECH
MARKET
The global trade in goods amounted to US$18.9
trillion (2019)
11
. Supply chain costs are estimated to
represent 10 to 20%
12
of this figure, which equates
to approximately US$2.8 trillion of whitespace to be
claimed by TradeTech solutions. Within the TradeTech
market it is estimated that digital trade solutions
alone could reduce trade costs by 14.3% and boost
global trade by up to US$1 trillion per year
13
.
Figure 2.6: TradeTech total addressable market
TradeTech MarketGlobal Trade
US $18.9
trillion
US $2.8
trillion
11. https://stats.unctad.org/handbook/MerchandiseTrade/Total.html
12. https://www.oliverwyman.com/our-expertise/insights/2018/may/supply-chain-optimization--levers-for-rapid-ebitda.html
13. https://www.wto.org/english/res_e/booksp_e/world_trade_report15_e.pdf
25
MARKET OPPORTUNITY FOR TRADEWINDOW
TradeWindow’s digital trade solutions are currently
used by exporters, importers, freight forwarders,
and customs brokers. TradeWindow is positioned
to serve a wide range of customers with solutions
tailored to meet the needs of MSMEs through to
large enterprise.
TradeWindow takes a methodical data-driven
approach to selecting market expansion
opportunities with the size of the addressable
market a key factor in selecting new geographies.
We estimate this by calculating the value of the
whitespace: the throughput (both inbound and
outbound) of shipments (ocean and air freight)
multiplied by the following trade costs sourced
from The World Bank
14
:
• Documentary compliance cost – captures
the costs associated with preparing a bundle
of documents that will enable completion of an
international trade.
• Border compliance cost – captures the costs
associated with meeting the country’s customs
regulations and with regulations relating to other
mandatory inspections that take place at the port
or border.
Figure 2.7: TradeWindow’s serviceable available market
14
Existing Markets
New ZealandAustralia
$2.1 billion
$10 billion
$12.1 billion
Growth Markets
AsiaSouth America
$270.1 billion
$27.3 billion
$297.4 billion
14. https://www.doingbusiness.org/en/data/explore topics/trading-across-borders
In the near term, the majority of TradeWindow’s
resources are focused on winning market share
in Australasia, with some initiatives focused on
expansions into Asia via Singapore. TradeWindow’s
Singapore office has been successful in winning
a small number of customers across the region
including freight forwarders in China, Fiji, Indonesia,
Malaysia, and Papua New Guinea. TradeWindow is
working to grow market share in Asia by establishing
an agency network with reputable partners with an
initial focus on member countries of the Pan Asian
E-Commerce Alliance.
Longer term growth opportunities include entering
South American markets. TradeWindow has
already conducted market research in support of
establishing a beachhead in Chile. The market entry
study funded by a New Zealand Trade and Enterprise
Springboard grant identified that Chile shares many
of the attractive characteristics found in the
New Zealand and Australian export sectors. Chile
could provide the launching pad to establish an
agency network in the region.
26
SUPPLY CHAIN RESILIENCE
COVID-19 restrictions have forced organisations to
digitise processes to remain in operation. McKinsey &
Company’s Global Survey of executives reports that
organisations have accelerated the digitisation of
their customer and supply chain interactions, and of
their internal operations, by three to four years
15
.
CYBERSECURITY
Criminals are becoming increasingly sophisticated,
constantly evolving their attempts to steal data.
Unsecure systems leave organisations exposed to
the risk of theft or fraud, especially those dealing
with parties offshore. Beyond the theft of valuable
and sensitive data, cybersecurity incidents can
materially damage an organisation’s brand and
reputation. TradeWindow’s solutions form part of an
organisation’s overall cybersecurity approach.
CONSUMER EXPECTATIONS
Increasing competition has led consumers to
become accustomed to on-demand access to
goods. Further, consumers are demanding increased
transparency of goods as they move through
the supply chain. Providing a superior customer
experience requires organisations work in close
coordination with their supply chain partners, this
requires end-to-end connectivity allowing data to be
seamlessly shared across IT solutions.
S TA NDA R DIS ATION
Seamless cross-border trade facilitation across
digital platforms requires the development and
implementation of globally accepted standards.
Standardisation initiatives focused on creating
universally recognised data standards, as well as
building a harmonised regulatory framework. Key
inter-governmental standardisation initiatives
include the development of supply chain data
standards by the United Nations Centre for Trade
Facilitation and Electronic Business, and model
laws by the United Nations Commission on
International Trade Law.
INTERNATIONAL COOPERATION
Economies are working together to enact compatible
digital policies. Initiatives include provisions for
digital trade within new Free Trade Agreements
and other partnership agreements. Significant
agreements likely to affect TradeWindow include:
the Comprehensive and Progressive Agreement for
Trans-Pacific Partnership; Australia-United Kingdom
Free Trade Agreement; Australia-European Union
Free Trade Agreement; and the Digital Economy
Partnership Agreement.
REDUCING BARRIERS
Reducing trade costs is essential in enabling more
MSMEs to effectively participate in cross-border
trade. Digital trade solutions are effective in reducing
the non-tariff trade costs that present a barrier to
participation for MSMEs and which are a constraint
on growth for many economies. The World Economic
Forum reports that digital platforms including cross-
border e-commerce platforms now facilitate 12%
of global trade in goods and are expected to grow at
twice the rate of domestic e-commerce
16
.
15. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-
hs-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever
16. https://www3.weforum.org/docs/WEF_Mapping_TradeTech_2020.pdf
Drivers of
TradeTech adoption
27
TradeWindow’s competitive landscape is best
understood by categorising players into the
productivity, connectivity, and visibility categories
described below. TradeWindow is the only
player providing a vertically integrated digital
trade platform covering compliance, operations
management, data sharing and storage, internal
and external stakeholder collaboration, and
end-to-end supply chain traceability. Digital
trade solutions deliver most value if data can be
captured at source, securely shared, and re-used
across multiple use cases.
PRODUCTIVITY
Productivity solutions enable organisations
to capture, aggregate, and reformat data,
all of which are foundational capabilities for
the digital enablement of trade. This market
segment includes trade documentation and
freight forwarding solutions competing directly
with TradeWindow Prodoc and TradeWindow
Freight respectively. TradeWindow’s Productivity
solutions are positioned to deliver a high-quality
customer experience through customisation,
supported onboarding, multi-modal training, and
high levels of customer service.
TradeWindow’s current competitors in the
Productivity category are primarily Australasian
based companies. However, it is expected that
TradeWindow will encounter further competitors
as it expands into new markets.
CONNECTIVITY
Connectivity solutions enable data sharing and
collaboration between organisations, typically
within a single sector. These solutions are both
competitors and collaborators with TradeWindow
Cube, which in contrast to many competitor
products, is a sector neutral solution designed
to connect with modern and legacy systems
used in pockets of the supply chain ecosystem.
Interoperability is required to facilitate digital
trade, as a single international shipment touches
parties from finance to logistics, government to
the customer. Interoperability creates a network
of networks, and this phenomenon increases the
number of participants that can securely share data
and collaborate which improves the value of the
services for parties across the supply chain.
VISIBILITY
Visibility solutions provide organisations and their
customers with granular data around their supply
chain and the movement of specific goods. These
solutions compete with TradeWindow Assure, one
of the few solutions capable of providing end-to-end
supply chain traceability, made possible through
integration with TradeWindow’s Productivity and
Connectivity solutions, both of which capture data
at source. In contrast, stand-alone solutions without
data traceability are limited to low value ‘data-driven
story telling’.
Competitive
landscape
28
LogisticsCommercial
FinanceGovernment
CargoX
TradeLens
SAP
Microsoft
Oracle
Infor
Bolero
essDocs
Trade
Information
Network
Voltron
Komgo
Trust Alliance
Trade document
solutions
ImpexDocs
Ozdocs
BSM
Freight forwarder
solutions
BlueJay (E2Open)
WiseTech Global
VISIBILITY
CONNECTIVITY
PRODUCTIVITY
CONNECTIVITY
VISIBILITY
Trust CodesIBM Food Trust
Point solutions with
limited capability
and scope
Sector specific
solutions are both
competitors and
collaborators
Data facilitated through productivity
and connectivity solutions are a
prerequisite to be competitive in the
visibility segment
KTNet
Inter commerce
CrimsonLogic
EDI-I
NACCS
Figure 2.8: TradeWindow’s competitive landscape
CAT Telecom
Tradelink
Kale Logistics
DagangNet
CIECC
CONEX
Trade-Van
TradeWaltz
KGH
National
Telecom
29
TradeWindow’s strategy is focused on building upon
the following competitive advantages.
• Platform network effects: TradeWindow has
created a platform network effect by keeping
customers engaged in its solution ecosystem.
Customers typically start their digital trade
journey with TradeWindow’s Productivity
solutions, business critical digital tools core to a
user’s work. Connectivity and Visibility solutions
reinforce the value of the Productivity solution and
layer more value on top of it.
• Talent attraction and retention: TradeWindow
has carefully selected a team of subject matter
experts with domain expertise covering enterprise
software development, data security and
encryption, sales and marketing, finance, law,
and strategy. Competitive packages, benefits,
collectively held values, and a high-performance
culture help attract and retain the talent needed to
create a continuous pipeline
of innovations.
• Customer focused research and development:
TradeWindow’s development partner programme
provides deep insights into the pain points and
work practices of organisations working on the
front line of global trade. Constant customer
feedback into the R&D process accelerates
TradeWindow’s innovation cycle and development
of intellectual property. TradeWindow has used
this early mover advantage to construct an
ongoing pipeline of new features and solutions.
• Breadth and depth of ecosystem: TradeWindow
has developed an ecosystem of partners
spanning shipping lines, ports, banks, insurance
companies, and government agencies.
Establishing an ecosystem of similar breadth and
depth cannot be replicated quickly. It can take
many months of close engagement including
pilots, security reviews, due diligence, and
commercial negotiations before establishing an
ecosystem partnership.
• Reputation and brand: In the New Zealand market
TradeWindow has been focused on building
profile in the export and freight forwarding sectors
with a presence at trade shows and conferences.
Furthermore, TradeWindow is a key contributor
to thought leadership on digital trade with
participation on high profile panel discussions
including those conducted by Digital Council of
Aotearoa, APEC, ASEAN New Zealand Business
Council, and the Pan Asian E-Commerce Alliance.
• Government accreditation: TradeWindow
has New Zealand government authorisations
and accreditation which require extensive
engagement and investment of time to replicate.
Specifically, TradeWindow is duly authorised
by the New Zealand Customs Service to certify
Certificates of Origin for the following Free
Trade Agreements: New Zealand/China FTA
and ASEAN/Australia/New Zealand FTA.
TradeWindow has also been approved by
the New Zealand Customs Service and the
Inland Revenue Department to store customs
documents and business records within its
platform, hosted outside of New Zealand in
digital format for its customers.
Competitive advantages
30
TradeWindow’s solutions are designed to be
adopted in increments, delivering increasing value
to customers. Figure 2.9 provides an overview of a
customer’s typical digital transformation journey.
Customers start by digitising their back-end
operations with TradeWindow’s Productivity
solutions. Digitisation of internal processes can
provide a catalyst for organisations to take the next
step in their digital transformation journey - secure
Figure 2.9: The transformational journey towards end-to-end digital trade facilitation
VISIBILITY
Differentiated quality
assurance & provenance
CONNECTIVITY
Safe collaboration & sharing
though a fully integrated system
PRODUCTIVITY
Implementation of operational
systems for superior efficiency
EXCELLENCE
EFFECTIVENESS
EFFICIENCY
Product
connectivity with permissioned partners across
the supply chain ecosystem. Data captured by the
Productivity and Connectivity solutions can be
re-purposed, aggregated, and enriched to provide
customers increased levels of visibility across their
supply chain to more effectively manage risk and
engage customers.
31
PRODUCTIVITY
TradeWindow’s Prodoc, ExpressDoc, Freight, and
ExpressFreight solutions are designed for exporters,
importers, freight forwarders, and customs brokers
to run business critical processes. Solutions are
purpose-built, with each designed to capture data at
source and automate workflows to deliver efficiency,
accuracy, and quality for all involved. Integration
17
into
Cube enables automation of cross-organisational
workflow, with data available from the source
in near real-time. Common capabilities across
TradeWindow’s Productivity solutions include:
INTEGRATION
· ERP
· Border agencies
AUTOMATE
· Data entry
· Data validation
· Deduplication of data
· Data cleansing
OPTIMISE
· Shipment movements
· Customs clearance
· Workflows
COMMON
CAPABILITIES
Mid-market to large
enterprise exporters
MSME exporters
Freight Forwarders
Customs Brokers
PRODOC
EXPRESSDOC
FREIGHT
EXPRESSFREIGHT
SOLUTIONSTARGET
MARKET
17. Prodoc, ExpressDocs, and Origin are fully integrated. Freight and ExpressFreight are expected to be integrated in due course.
Figure 2.10: Overview of TradeWindow’s Productivity solutions
• Third-party integrations – Seamless connectivity
with Enterprise Resource Planning ("ERP") systems
and border agencies.
• Automated data-entry – Capture data once at
source with edits syncing across documents and
modules. Eliminates manual data entry, duplication
of work, and human error.
• Optimise workflow – Efficient logical workflow and
interactions with key partners across the supply
chain ecosystem.
32
Prodoc is a customisable enterprise
document solution designed to meet the
demands of mid-market to large enterprise
exporters trading internationally. Prodoc is
a flexible solution that has been designed
to leverage customers’ IT investments with
integration into either on-premise or cloud-
based ERP systems. Prodoc integrates
systems used by border agencies for
compliance submission.
ExpressFreight
18
is a cloud-based
solution for cargo reporting and border
clearance solution targeted towards
shipping lines and their agents, air freight
couriers and operators of independent
customs bonded stores. ExpressFreight
eliminates the need for manual data
entry and connects with New Zealand
border agencies through Electronic Data
Interchange (“EDI”) connectivity.
Freight is a modular solution for managing
freight forwarding operations from order
management to warehousing. Modules
can be combined to deliver an end-to-end
freight forwarding focused ERP system.
Core capabilities include accounts,
Customer Relationship Management,
container freight station, customs,
e-commerce, export documents, freight,
customs, order tracking, local transport,
shipping and airlines, and warehousing.
ExpressDoc is a Software as a Service
("SaaS") cloud-based self-service export
documentation solution designed to
meet the needs of an MSME at the start
of their export journey. ExpressDoc
captures data at source through an
Application Programming Interface
(“API”) with cloud-based accounting
software solution Xero, with MYOB to
follow soon. ExpressDoc is in beta testing
with commercial release anticipated for
Q1 2022.
18. Speedi will be renamed ExpressFreight.
33
CONNECTIVITY
TradeWindow’s Cube solution enables organisations
involved in global trade to securely share mission-
critical data and collaborate with partners across
the supply chain ecosystem. Trusted collaboration
is made possible using an enterprise-grade
security underpinned by blockchain technology.
Permissioned parties can view and edit, with actions
recorded on an immutable audit trail.
Cube is design to connect all parties through
integration into incumbent systems used in each
part of the supply chain.
• Commercial – ERP systems used by exporters
and importers including SAP, Microsoft Dynamics
365, Oracle, NetSuite, along with sector specific
solutions.
• Logistics – Systems used by organisations to
secure bookings with shipping lines, airlines
19
,
as well as port and terminal operators. Current
connections include INTTRA, CargoSmart,
and PortConnect.
19. Cube does not currently connect with Air Freight booking systems, however this capability is on the product roadmap.
20. Cube is currently interoperable with Trade-Van (Chinese Taipei) and is currently working on integration with others throughout the region.
VISIBILITY
TradeWindow’s Assure solution is designed to
enhance transparency both within organisations
and across the supply chain. Assure enables
organisations to re-use data to build trust with both
businesses and consumers. Customers can provide
parties with permissioned access to blockchain-
verified records which prove end-to-end traceability
of goods. Assure use cases include:
• Finance – Systems used by large financial
institutions including: SWIFT, the messaging
system that connects financial institutions
and large corporates across the globe; and CGI
Trade360, a trade finance back-office solution.
• Government – Systems used by border
agencies including Trade Single Windows
throughout Asia
20
.
Key features in Cube currently includes:
• Origin – online fast turnaround electronic
Certificate of Origin service.
• Vault – scalable cloud-based data vault approved
by The New Zealand Customs Service and New
Zealand Inland Revenue.
• Bookings & scheduling – seamless access to
INTTRA and CargoSmart, the booking systems
used by the world’s largest shipping lines.
• Data-driven story telling – securely captured and
verified data can be used to prove the provenance
and authenticity of particular goods.
• Risk management – proprietary algorithms and
advanced cryptography can be used to detect
patterns of fraudulent activity.
34
TradeWindow’s customers purchase software
licenses to access one or more of the Company’s
solutions. The types of software licenses vary
depending on customer size, sales channel, and the
existence of legacy customer agreements
21
.
Revenues from TradeWindow’s Prodoc and Cube
22
solutions are made up of monthly subscription
fees and transaction fees. Prodoc and Cube
transaction fees are calculated per set of shipping
documents created or shared, respectively.
Transaction fees allow customers to match costs
with seasonal revenues.
TradeWindow Freight, the Company’s freight
forwarding solution, has a subscription charge
per module and number of users. The number of
modules used by a customer will vary depending on
the breadth and complexity of their operations.
TradeWindow’s ExpressDoc
23
and ExpressFreight
solutions both have monthly subscription fees.
These solutions for MSMEs can be accessed
through an online registration process. The minimum
subscription period for either solution is one month.
Other revenue includes fees from installation and
services including software customisation. The
basis of this charging can vary depending on the
contractual terms with the customer, which may
specify time and materials, capped or fixed pricing.
TradeWindow provides regular software upgrades
and enhancements as well as offering upsell
and cross-sell opportunities to its existing
customer base.
A summary of how TradeWindow makes money is
provided in figure 2.11 below.
Business model
Figure 2.11: How TradeWindow makes money
21. Freight and ExpressFreight have customer agreements that predate the respective acquisitions by TradeWindow.
22.. TradeWindow Origin provides a Certificate of Origin service outside of the functionality embedded in the Cube platform. Revenue
from this service is on a per-certificate basis and is ad-hoc in nature.
23.ExpressDoc is currently in beta and is not yet commercially available.
REVENUE
TYPE
PROPORTION
OF FY2021
REVENUE (%)
FY2021 REVENUE
($000)
REVENUE
MODEL
REVENUE
RECOGNITION
POLICY
DESCRIPTION
Transactional
revenue
53%$873Per
transaction
fee
At the point in
time when the
transaction
is processed
through the
solution.
• A transaction is the creation of a set of
trade documents, or the sharing of a set of
trade documents.
• Amount of fee may vary depending on the
customers transaction volume.
• Customers are invoiced monthly in arrears.
Subscription
revenue
26%$420Recurring
monthly,
quarterly or
annual fee
Over time as
the services are
delivered to the
customer.
• Customers pay a fixed subscription fee to
access the solution.
• Amount of fee varies depending on the
number of solutions subscribed for and the
number of users of the solutions.
• Customers are invoiced on a monthly,
quarterly, or annual basis throughout the
term of the contract.
Installation
revenue
12%$205Initial
one-off
customisation
set up fee
Over time over
the term of the
contract.
• Amount varies depending on the level of
service and complexity of the installation.
• Customers are invoiced on an upfront basis
or on a monthly installment basis.
Service
revenue
9%$144Per services
fee
Over time as
the services are
delivered to the
customer.
• Charges for ad-hoc customisation or
enhancement requests.
• Amount varies depending on the level and
complexity of the service.
• Customers are invoiced monthly on upon
completion of the work.
35
TradeWindow’s sales and marketing strategy is
underpinned by cost-effective customer acquisition,
customer advocacy, and highly targeted marketing.
TradeWindow’s sales and marketing initiatives
are spread across two functions: Sales who are
exclusively focused on new customer acquisition;
and Customer Success who are focused on growing
usage (and revenues) within TradeWindow’s existing
customer base.
COST-EFFECTIVE CUSTOMER ACQUISITION
TradeWindow offers digital trade solutions for
MSMEs through to large enterprise. This requires a
multi-channel sales strategy which will develop to
include both online self-service and enterprise sales
approaches. TradeWindow’s online self-service
solutions include ExpressDoc and ExpressFreight.
Sales leads for these solutions are generated
primarily through digital marketing campaigns. In
contrast, the mid-market to large enterprise segment
is reached using a team of Business Development
Managers employing a solutions sales approach.
The sales cycle for one of these larger customers can
take between two to twelve months depending on the
size and complexity of the prospect’s operations.
In Asia, TradeWindow has started establishing an
agency network serviced from the Singapore office.
CUSTOMER ADVOCACY
TradeWindow employs a proactive approach to
managing customer relationships starting with a
streamlined onboarding experience, comprehensive
product training, and regular ‘health checks’. Regular
Sales and
marketing strategy
contact provides the opportunity for Customer
Success Managers to identify opportunities for
TradeWindow to help customers progress their digital
transformation through cross-selling or up-selling.
TradeWindow's Customer Success Managers focus
on building strong relationships with customers
and act as their advocate to resolve issues and
capture feedback for the product development
cycle. Satisfied customers have agreed for their
TradeWindow journey to be used as a case study
for marketing purposes, which demonstrates the
efficacy of TradeWindow’s solutions. Sector specific
case studies are effective marketing materials for
attracting the fast followers.
TARGETED MARKETING
TradeWindow allocates its marketing budget across
digital media and industry events. The Company’s
multichannel approach is designed to build brand and
product awareness among users and key decision
makers. The Company’s modest spend on digital
media is limited to Search Engine Optimisation,
podcast publishing, and the creation of thought
leadership articles posted on LinkedIn or Twitter.
Notwithstanding disruptions caused by lockdowns
over the past 18 months, TradeWindow has
participated in export sector and freight forwarding
industry conferences and events across New
Zealand and Australia. Highlights include APEC 2021
forum (online), Hort Connections 2021 (Australia),
Customs Brokers and Freight Forwarders 2021
(New Zealand); and the ASEAN Trade Forum (online).
36
TradeWindow has established
partnership or sponsorship agreements
with Export New Zealand, Customs
Brokers & Freight Forwarder Federation
of New Zealand Inc, the Export Council of
Australia, and International Forwarders
& Customs Brokers Association of
Australia. The Company’s association
with these industry leading bodies
provides a source of referrals from well-
regarded and trusted organisations.
Leading industry
body partnerships
37
TradeWindow defines a Customer as an entity that
has entered into an agreement for one or more of
TradeWindow’s solutions and pays subscription
fees. TradeWindow’s digital trade software solutions
have been designed for widespread adoption while
meeting the sector specific requirements of a
customer base spanning a wide range of sectors
including dairy, meat, horticulture, seafood, forestry,
manufacturing, and freight forwarding sectors. Our
largest sector is currently freight forwarders and
customs brokers comprising around 250 MSME
customers subscribing to the Freight software which
represent around 36%
24
of trading revenues.
24. Management estimates as at 30 September 2021
Customers
Figure 2.12: TradeWindow’s customers by sector
24
66.0%
14.7%
10.5%
8.0%
0.3%
0.5%
Agriculture, Forestry & Fishing
Manufacturing
Electricity, Gas, Water & Waste Services
Wholesale Trade
Retail Trade
Transport, Postal & Warehousing
38
TradeWindow’s largest customer
currently represents less than 2%
of trading revenue and the top 10
customers accounted for less than
15% of trading revenue.
25
Figure 2.13: TradeWindow’s top 10 customers as a percentage of trading revenue
12345678910
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
25. Management estimates as at 31August 2021
Customer
39
GREATER USAGE FROM EXISTING CUSTOMERS
TradeWindow aims to increase the usage of the
Company’s solutions among the existing customer
base by cross-selling TradeWindow Cube.
TradeWindow plans to support this initiative by
recruiting additional Customer Success Managers,
as well as broadening the range of features and
functionality in the TradeWindow Cube solution to
grow the inherent value of the solution.
INCREASING MARKET PENETRATION
Australasia
TradeWindow plans to accelerate market penetration
in Australasia by increasing investment into sales and
marketing capabilities. It is anticipated that targeted
marketing initiatives including industry events and
thought leadership across media will drive high
quality lead generation. Additionally, TradeWindow
aims to develop further partnerships with industry
bodies to promote the Company’s brand and
reputation which TradeWindow anticipates will
encourage inbound customer referrals.
Asia and South America
TradeWindow’s solutions have been built on highly
scalable infrastructure and are designed to be
compatible across jurisdictions. TradeWindow aims
to build presence outside of Australasia, initially in
Asia, followed by South America using a capital-
light expansion model. TradeWindow is currently
establishing an agency network across Asia via our
Singaporean office. While our initial focus is on selling
Freight, future growth plans include selling other
TradeWindow solutions through this channel. Taking
a similar approach to Asia, TradeWindow plans to
set-up an agency network in South America by first
establishing a beachhead in Chile.
Business strategy
EXPAND PRODUCT OFFERING
TradeWindow’s product development approach
is one of continuous customer-centric innovation.
The Company continuously invests in research
and development to enhance the functionality of
existing solutions, as well as solve new pain points
experienced by customers. As TradeWindow
releases new solutions, the Company expands
its opportunities to further entrench the existing
customer base through cross-sell and up-sell
initiatives. TradeWindow’s modular architecture
and scalable cloud-based infrastructure makes it
straightforward to onboard both new and existing
customers onto new solutions.
TradeWindow’s product development process
is driven by collating feedback and solution
enhancement suggestions from a wide range of
sources including TradeWindow’s customers,
ecosystem partners, and employees. Metadata
associated with TradeWindow’s solutions provides
insights on where additional value can be created.
ACQUISITIONS
TradeWindow will look to buy existing businesses
to consolidate market share and/or build capability.
Strategic acquisitions can provide an opportunity
to buy into a market position that would otherwise
take years to build, as well as cross-sell and up-sell
opportunities to both new and existing customers.
TradeWindow management considers that small,
targeted acquisitions of established players in
the Australian market provide a lower risk, faster,
and stronger entry into the market. Figure 2.14
summarises TradeWindow’s acquisition drivers.
TradeWindow has a customer-centric strategy
underpinned by organic and inorganic growth
initiatives focused on continuous improvement of
the customer experience.
40
PEOPLE AND CULTURE
TradeWindow's growth plans rely on attracting and
retaining highly skilled and experienced subject
matter experts from both commercial and technical
domains. TradeWindow operates in an industry that
is competitive for talent. Accordingly, the senior
leadership team have been focused on shaping
a culture that people aspire to be a part of. Our
environment is focused on performance, innovation,
and accountability. Early in TradeWindow’s history,
the senior leadership team came together to define
six values that underpin the Company’s high-
performance team culture. TradeWindow’s values
are listed in figure 2.15 below. They describe what is
important, set expectations, and guide decisions.
Further information on
TradeWindow’s business
Be realWe value diversity of thought, honesty, and openness. We challenge with respect.
Think bigWe challenge the definition of possible.
Always engagedWe take time to understand our customers and stakeholders to deliver the best work
of our lives.
Own itWe always deliver, and on-time.
One teamWe take bold steps together to deliver the smartest solutions.
Fiercely efficientWe make each minute and every dollar count.
Figure 2.14: TradeWindow’s acquisition drivers
Seamless market entryRisk reduction
Accelerates expansion
Industry experts
Local leadership
Quality customer base
Local infrastructure
and offices
Why buy, not build?
Move rapidly with certainty
Sticky customer base to cross-
sell complementary products
Secures additional data
sources
Known market entry cost
Earn outs help retain
management and institutional
knowledge
Addresses war on talent
Figure 2.15: TradeWindow's values
41
TradeWindow operates in a dynamic, fast-paced
environment. Our people need to continuously
acquire knowledge and learn new skills. New ideas
spur opportunities for innovation. In addition to on-
the-job training, TradeWindow offers employees the
opportunity to build skills through paid courses best
matched to the needs of the business, their ambition
and experience.
We make wellbeing a priority at TradeWindow. Our
people are provided with health insurance, five days
paid Wellness Leave, and support from a dedicated
Wellness Committee. TradeWindow provides a
stimulating and healthy work environment with
modern offices and flexible working options.
OUR ENVIRONMENTAL, SOCIAL AND
GOVERNANCE FOCUS
Environmental
TradeWindow recognises that it has a responsibility
to the environment beyond legal and regulatory
requirements. TradeWindow aspires to have a
low environmental impact and we encourage
customers, suppliers, and other stakeholders to
do the same.
TradeWindow’s environmental initiatives include:
• Hybrid working – TradeWindow employees
can choose to work from home part of the time,
reducing the carbon emissions associated
with commuting.
• Paper-less office – TradeWindow uses digital
solutions to store and manage company records.
• Low-emission vehicles – TradeWindow’s head
office has a small fleet of Hybrid cars available
for employees to use.
• Cloud-computing – TradeWindow partners
with both Microsoft and Amazon Web Services
(“AWS”) as providers of cloud services. Microsoft
has been carbon neutral since 2012 and is
committed to zero-waste by 2030
26
. AWS has a
long-term commitment to use 100% renewable
energy by 2025
27
.
Social
TradeWindow is committed to creating an open
workplace where every team member is welcomed,
supported, and inspired, and where diversity is
celebrated. TradeWindow’s diversity and inclusion
principles will be practically implemented across
the business by:
• providing training and education that raises
employee awareness of inclusion and diversity and
associated benefits supported by TradeWindow’s
membership to Diversity Works NZ.
• ensuring our recruitment, development and
management approaches enable inclusion and
diversity at all levels.
• ensuring our people receive fair and equitable pay
and benefits.
• enhancing processes and policies to encourage
greater flexibility and diversity.
• entrenching inclusion and diversity in our culture
through engaging internal communications
and events.
• regularly tracking progress against targets.
• having zero tolerance for harassment,
discrimination, or victimisation.
Governance
TradeWindow is committed to observing best practice
in accordance with the NZX Governance Code.
26. https://azure.microsoft.com/en-gb/global-infrastructure/sustainability/#overview
27. https://sustainability.aboutamazon.com/environment/the-cloud?energyType=true
42
IT INFRASTRUCTURE
TradeWindow’s digital trade solutions are hosted by
AWS and Microsoft Azure. All data for TradeWindow’s
New Zealand and Australian customer base is stored
in data centres located in Australia.
TradeWindow uses the following approaches to
ensure consistent delivery of its cloud products:
• enterprise class architecture employing best
practice in security and application construction.
• decentralised storage provides multiple points
of resilience and trust where banks, shipping
lines, and insurance companies can host a
decentralised storage node ensuring multiple
copies of data.
• daily back-ups of the Company’s full database
with 14 days of hot backups for immediate
recovery.
• all data is encrypted and secured.
• TradeWindow maintains the following
International Organisation for Standardisation
(“ISO”) accreditations for which it is audited
annually: ISO/IEC 27001:2013 (Information
Security Management); ISO 9001:2015 (Quality
Management System); and PAS 99:2012
(Integrated Management System).
Multi-tenant infrastructure with single
source code
TradeWindow’s Cube solution has been built on
a scalable multi-tenant infrastructure network,
allowing TradeWindow’s digital trade software
solutions to scale up together with customers as
they expand their businesses. TradeWindow has
engaged with third-party technology consultants
who have tested and demonstrated the
platform’s ability to handle significant capacity.
TradeWindow’s Cube solution also operates
under a single source code system, which
allows for faster release of software updates,
enabling all users to access the latest enhanced
functionalities of the platform.
43
RISK MANAGEMENT PROCEDURE
TradeWindow’s key technology risk mitigation
methodology includes:
• Risk infrastructure management – the CTO
is responsible for ensuring compliance with
policies and procedures, recommending risk
mitigation strategies and operational oversight
of risk practices. In addition, the CTO initiates and
coordinates ongoing risk assessment, evaluates
all new risks, and manages responses to issues
when they occur.
• Monitoring and testing – TradeWindow
maintains continuous monitoring and activity
logging on its primary platform. TradeWindow
also subscribes to third party vendors to keep
abreast of relevant threats, vulnerabilities, or
actual incidents.
DATA PROTECTION AND CYBER SECURITY
IT security and data protection are critical to build
and maintain TradeWindow’s SaaS cloud-based
solution. TradeWindow employs a rigorous approach
to security management. As at the date of this Profile,
TradeWindow is not aware of any security breach of
its solutions having occurred.
Processes that are used by TradeWindow to enhance
data protection and cyber security include:
• External penetration testing – regular testing
is conducted by external vendors.
• Secure development – TradeWindow’s
development team receives regular training
in security aware coding techniques based
on industry best practice.
• Defence in depth – TradeWindow uses a
Distributed Denial of Service (“DDoS”) prevention
systems to protect its cloud-based platform.
TradeWindow uses a defensive depth approach
to systems architecture where security is not just
limited to a perimeter. Firewalls are used across all
systems, and firewall rules are continually updated
and independently audited where required. All
logs are centralised, reviewed and monitored by
system administrators for suspicious behavior.
44
INTELLECTUAL PROPERTY
TradeWindow’s key intellectual property includes
the source code of solutions developed by the
Company, the processes, technology, trade secrets,
know-how, brand, and design involved in delivering
those solutions to market. Trade Window does
not have any registered patents in place due to the
costs associated with worldwide patent protection
and the procedures it has in place are adequate and
appropriate to ensure the utmost protection of its
intellectual property.
AC CR EDITATIONS
TradeWindow operates in a competitive market,
therefore differentiation is of paramount
importance in order to attract talent, customers,
and supply chain ecosystem partners. In addition
to the government accreditations (see page
30), TradeWindow is an accredited employer for
immigration purposes in New Zealand and an
approved employer in Australia. TradeWindow
maintains the following ISO accreditations for
which it is audited annually: ISO/IEC 27001:2013
(Information Security Management); ISO
9001:2015 (Quality Management System); and
PAS 99:2012 (Integrated Management System).
45
Directors and senior
leadership team
Alasdair joined the TradeWindow board in October 2021 and was
appointed Chair at that time.
Alasdair has a broad range of experience in governance across
software, technology, and not for profit sectors. Alasdair is
currently Chair of Napier Port Holdings Limited and SilverStripe
Limited, and serves as independent member of the Board
Appointments Committee for IHC New Zealand. Alasdair was
Chair of the Hawke’s Bay chapter of ExportNZ (a division of
BusinessNZ) for seven years, and is a Trustee and mentor with
Big Brothers Big Sisters Hawkes Bay.
Alasdair started his career as a civil engineer, and then
transitioned into management where he gained a broad range
of experience across the energy, infrastructure, technology and
primary sectors. As a Partner in Deloitte for 12 years, Alasdair led
the teams that developed New Zealand’s Aquaculture Strategy,
Horticulture Strategy, and Red Meat Sector Strategy.
Alasdair has a Higher National Diploma in Civil Engineering from
the Glasgow Caledonia University, later completing a Master
of Business Administration from Massey University. He is a
Chartered Member of the Institute of Directors.
Alasdair MacLeod
Independent Chair
AJ Smith is a founding shareholder of TradeWindow and has been
the CEO from the company’s inception in 2018. AJ has a track
record of innovation and investment with successful rapid-growth
companies including MediFin, GreenFin and Bonds Africa (South
Africa) and Commonwealth Finance Group (Switzerland). With a
strong belief in building high-performance teams, AJ is an active
executive member of the Young Presidents Organisation and
graduated from the University of Freestate (South Africa) with
a Bachelor of Commerce majoring in Business Management,
Marketing, and Law.
As Executive Director and CEO, AJ is focused on formulating and
executing TradeWindow’s strategic growth objectives.
AJ Smith
Executive Director and Chief Executive Officer
Board of directors
46
Kerry Friend is a founding shareholder of TradeWindow and has
been a director since inception in 2018.
Kerry has three decades of financial management experience. He
started his career with EY Wellington before following a career
across Asia primarily in the media and entertainment sector.
Kerry has previously held senior finance positions with Take-Two
Interactive Software (Singapore), Jupiter TV (Japan), Bloomberg
(Japan) and News Corporation (Japan).
Kerry holds a Bachelor of Management Studies from the University
of Waikato, is a Chartered Accountant, a Chartered Member of the
NZ Institute of Directors, and a member of the Australian Institute
of Company Directors.
Kerry Friend
Executive Director
Diana joined the TradeWindow board in October 2021.
Diana has a strong governance background, with her current
portfolio including directorships on Napier Port Holdings Limited,
Ngati Porou Holdings and New Zealand Cricket. In 2015 she was
elected to the board of the New Zealand Olympic Committee.
She sits as either the Chair or a member of all of these entities’
Audit Committees.
Diana’s career began with PWC in Auckland and then Singapore.
She was then Chief Financial Officer for ten years, both in
the commercial sector and in the sporting environment. This
included CFO roles for two America’s Cup sailing campaigns,
establishing businesses in Spain, the UK and the US.
Diana is a Fellow Chartered Accountant and a Chartered Member
of the Institute of Directors. Her iwi affiliation is Ngati Porou.
Diana Puketapu
Independent Director
Phil joined the TradeWindow board in October 2021.
Phil brings extensive governance experience in the technology
sector, he was the founding Chairman of Xero, one of New
Zealand's most successful publicly listed technology companies,
and is currently Chairman of NZX/ASX listed Plexure Group
Limited, Chairman of ASX listed Straker Translations Limited
and Chair of NZX listed Just Life Group Limited. Phil is also the
Independent Chairman of Loyalty New Zealand Limited (Fly Buys).
Phil holds an MBA degree from Auckland University and he is a
Chartered Member of the Institute of Directors.
Phil Norman
Independent Director
47
Senior leadership team
TradeWindow’s senior leadership team brings a
depth and breadth of experience across multiple
industries including software, technology, finance,
FMCG and services. The team have backgrounds
that encompass early-stage start-ups through to
corporate organisations both in New Zealand and
overseas. The team have a proven track record of
working effectively to lead the business strategy
and culture. TradeWindow’s senior leadership team
are committed to the long-term success of the
business, each of the senior leaders listed below
are shareholders in TradeWindow.
AJ Smith
Chief Executive Officer
See biography in the section under the heading “Board of
Directors” on page 46.
Deidre Campbell
Chief Financial Officer
Deidre has extensive financial management and leadership experience within a
public company having been the Group CFO for Methven Limited, a formerly NZX
listed designer and manufacturer of showers and taps. During her 16 years as
CFO, Deidre led the establishment of processes and systems to support Methven’s
growth from $20 million to $100 million in sales, transition to an international
business, and from private ownership to an NZX listed company. Deidre is a
Chartered Accountant and member of Chartered Accountants Australia and
New Zealand.
Andrew Balgarnie
Chief Operating Officer
Andrew is an experienced business strategist, deal maker and problem solver
with a broad background spanning strategy, corporate finance, and consultancy.
Andrew has a track record for delivering large complex transactions and early-
stage capital raising. Andrew spent six years in Australia with NBN Co where
he worked on several high-profile projects including the procurement of a
satellite network, strategic review, and business transformation. Andrew holds a
Bachelor of Business Studies from Massey University, and a Master of Business
Administration from the Australian Graduate School of Management.
Brendan McEnroe
Chief Technology Officer
Brendan is a Certified Enterprise Architect, technology thought leader and start-up
founder with 30 years’ experience. He has a demonstrated history of leading high
performing teams on large scale technology projects within leading organisations
including Air New Zealand, Tenzing, NHS Digital, BT Global Services, and Syntegra.
Brendan holds a Bachelor of Science (Honours) in Applied Computer Systems
from Brunel University London.
48
Gavin de Steur
Chief Customer Officer
Gavin is an experienced people leader with over 20 years of operational
experience. His diverse background spans telecommunications, security, and
technology. Gavin’s early career started as an Electronics Engineer Telkom South
Africa before moving into customer facing and managerial roles. Gavin previously
founded Agic Technologies, a cash processing technology business, which
was sold to Fidelity Security Group. Gavin and his family moved to New Zealand
in 2019 where he helped establish the Customer Success team for UneeQ, an
enterprise software company. Gavin holds a Bachelor of Engineering from the
University of Pretoria (South Africa).
Peter Foyston
Chief Sales Officer
Peter joined TradeWindow in 2020 from New Zealand Dairy Products, a start-
up developing a sheep/goat milk infant formula, where he was CEO. He brings
over 30 years’ experience working in senior roles across China and the UAE for
Emirates Food Industries, Goodman Fielder, Campbell’s Soup Company, Chiquita
Brands International. In his early career, Peter was Marketing Director for P&G
China working on the localisation of key brands into China. Peter has a Bachelor
of Commerce from Queens University (Canada) and a Master of Business
Administration from The Tuck School of Business Dartmouth (USA).
Dr. Guy Kloss
Chief Information Officer
Guy is an enterprise architect, computer scientist, chemical engineer, rocket
scientist and thought leader in the world of data security. He has built up a
wealth of experience by applying his unique skillset across a diverse range of
organisations including Bayer, the German Aerospace Centre, Mega, Qrious,
Gentrack and Nyriad. Guy holds a Master of Engineering from TU Dortmund
University (Germany), and a PhD in Computer Science from Massey University.
Dewald van Rensburg
Chief Legal Officer
Dewald is a lawyer with more than 20 years’ experience in corporate and
commercial law. Prior to joining TradeWindow in December 2019, Dewald worked
as Registrar at a South African university where he oversaw governance and
compliance for more than 40 institutional committees. He has served as director
on various boards and holds a Bachelor of Laws and a Master of Laws with
specialisation in International Corporate Finance Law. He is currently pursuing a
Doctorate in Business Administration.
Adrian Collier
Chief Supply Chain Officer
Adrian has more than 20 years’ experience in leadership roles covering health,
pharmaceuticals, manufacturing, retail, renewable energy and international
trade. Before joining TradeWindow in 2021 Adrian was the New Zealand
Trade Commissioner to Taiwan for four years where he developed a first-hand
appreciation of the challenges facing New Zealand exporters. Adrian has also lived
and worked in mainland China with pharmaceuticals giant Pfizer where he held
several technology leadership roles. Adrian holds a Bachelors and Masters degree
(Hons) from the University of Auckland.
Dr. Andy Standley
Head of Project Management
& Onboarding Operations
Andy is an experienced IT project manager with a proven record of managing
projects from concept to completion. He is skilled at managing cross-functional
teams on large complex projects including an industry wide single trade window
project for global supply chain consultancy, B2BE. Andy has an Master of Science
in Atmospheric Sciences and Meteorology, and a PhD in Satellite Remote Sensing
– Climatology from the University of Bristol.
49
CORPORATE STRUCTURE
Trade Window Holdings Limited was incorporated
to be the listed entity and holding company of
Trade Window Limited, with Trade Window Limited
continuing as the operating company. To effect
this structure, immediately prior to Listing, Trade
Window Holdings Limited issued 10 new shares for
each existing share held by Trade Window Limited's
existing shareholders, in the same proportion
as the shares that they owned in Trade Window
Limited. In exchange, the shareholders transferred
all of their shares in Trade Window Limited to Trade
Window Holdings Limited (meaning Trade Window
Limited becomes a wholly owned subsidiary of
Trade Window Holdings Limited). Other than this
restructure, prior to Listing Trade Window Holdings
Limited has not undertaken any transactions.
TradeWindow has made five acquisitions since
its inception, described in pages 51 to 54. The
acquisition of Trade Window Origin Limited
(previously IVS Origin Limited) was the only
acquisition by way of share sale, meaning Trade
Window Origin Limited is now a wholly owned
subsidiary of Trade Window Limited (as illustrated
in figure 2.16). The other four acquisitions were of
assets only, meaning the assets were transferred
to Trade Window Limited (or a subsidiary), and no
separate legal entity was acquired (and is therefore
not shown in the corporate structure diagram at
figure 2.16).
ACQUIRED BUSINESSES
Management considers that the five acquisitions
undertaken by TradeWindow has provided the
Company with a cost effective and lower risk way to
acquire customers and talent, build capability, and
enter new markets.
Once listed, TradeWindow will be required to comply
with the NZX Listing Rules in relation to continuous
disclosure (including with respect to material
information relating to acquisitions), and major
and related party transactions would require
shareholder approval.
Acquired businesses, subsidiaries,
and bodies corporate
DUE DILIGENCE PROCESS
When considering a potential acquisition,
TradeWindow typically undertakes commercial,
legal, and technical due diligence on the target.
Some of these due diligence aspects are outsourced
and some performed internally by TradeWindow
personnel with relevant expertise. The nature of the
due diligence process undertaken, and the level of
involvement of external experts, depends on the
size of the acquisition, the number of customers,
the complexity of the product, the structure of the
transaction, and the quality of the records kept. The
acquisition of business assets, rather than shares in
an operating company, necessitates a more targeted
due diligence process than would be typical for a full
business acquisition.
50
Figure 2.16: TradeWindow’s corporate structure
1. Trade Window
Holdings Limited
2. Trade Window
Limited
3. TradeWindow
Services Limited
7. Trade Window Pte.
Limited
4. Trade Window
Origin Limited
5. Trade Window
Nominees Limited
6. Trade Window Pty.
Limited
8. Trade Window
CNCO Pte. Limited
New Zealand Holding Company
New Zealand Parent
New Zealand Subsidiary
New Zealand Trustee Company (ESOP)
Australian Subsidiary
Singaporean Subsidiary
1
2
3-4
5
6
7-8
Prodoc
On 26 July 2019, TradeWindow entered into an
agreement for the purchase of assets from
Prodoc Limited. Consideration was $4.0 million
comprising $2.5 million cash and $1.5 million in
shares, issued at a share price of $3.15 per share
(implying a post 10:1 share exchange price of $0.315
per share). The transaction was part funded through
a $1.35 million five-year term loan and a $150,000
revolving credit facility from ASB; and a $637,300
vendor loan, for which the final repayment was made
in July 2021. Full completion of the transaction
occurred on 15 January 2020. The Prodoc assets
were acquired by TradeWindow’s subsidiary Trade
Window Services Limited.
Prodoc Limited owned and operated the "Prodoc"
export documentation and compliance software now
rebranded as "TradeWindow Prodoc". This business
had been operating for approximately 20 years at
the time of acquisition. TradeWindow acquired the
business assets of Prodoc (rather than the shares in
the operating entity). It then integrated the Prodoc
software, and the associated customer base, into
its business.
TradeWindow acquired Prodoc with the intention of
converting the solution from an on-premise solution
to a cloud-based solution. Cloud access provides
long term customers with continuous updates and
the opportunity for TradeWindow to cross-sell or up-
sell further solutions.
TradeWindow completed commercial, legal, and
technical due diligence on Prodoc. TradeWindow
was a start-up at this point with limited capability, and
therefore outsourced the commercial and legal due
diligence to competent service providers.
Commercial due diligence involved a review of the
customer concentration, financial performance,
debtors, creditors, pricing and business model,
systems, and capabilities. The Personal Property
Security Register was checked to make sure the
business assets were unencumbered. Staff were a
core capability, therefore the due diligence process
involved interviewing all staff.
Legal due diligence involved a review of customer
contracts, supplier contracts, and employment
agreements. The lease of the premise was
excluded from the scope. Historical liabilities of
the Prodoc entities did not transfer, given the
asset sale structure.
Technical due diligence included a review of
code, work practices, security protocols, data
management, and IT infrastructure, performed
by TradeWindow staff with an understanding of the
integration and operational expectations of
the business.
51
IVS Origin
On 14 October 2019, TradeWindow entered into an
agreement for the purchase of 51% of the shares
in IVS Origin Limited (“IVSOL”). Consideration
was $433,500 comprising $233,500 in cash and
$200,000 in shares issued at a share price of $3.15
per share (implying a post 10:1 share exchange price
of $0.315 per share). The business of IVSOL was spun
out of the operations of Independent Verification
Services Limited on 14 October 2019, and IVSOL was
subsequently re-named Trade Window Origin Limited
(“TWOL”). Full completion of the transaction occurred
on 6 January 2020.
On 31 March 2021, TradeWindow acquired the
remaining 49% of the shares in TWOL. Consideration
was $416,500 in shares issued at a share price of
$8.64 per share (implying a post 10:1 share exchange
price of $0.864 per share). Complete control of TWOL
allows TradeWindow to integrate the Certificate of
Origin functionality into the Cube solution.
IVSOL was incorporated for the purposes of
this acquisition. Certain assets of Independent
Verification Services Limited were spun out into
IVSOL. These assets related to the software
platform and demonstrated track record for
issuing Certificates of Origin under the delegated
authority from the New Zealand Customs Service.
Independent Verification Services Limited was
contracted to continue to operate the business for a
transition period before TradeWindow became a duly
authorised body.
TradeWindow initially acquired a 51% interest
in IVSOL, with parties related to Independent
Verification Services Limited holding the remainder
of the shares. Subsequently, TradeWindow acquired
all of the shares held by the other parties.
IVSOL provided TradeWindow with the capability
to provide customers with a fast turn-around
Certificate of Origin service, which has been
integrated as a feature into TradeWindow’s
Prodoc and Cube solutions.
TradeWindow completed commercial, legal, and
technical due diligence on IVSOL. TradeWindow was
a start-up at this point with limited capability, and
therefore outsourced the commercial and legal due
diligence to competent service providers.
Commercial due diligence involved a review of the
customer concentration, financial performance,
pricing and business model, systems, and
capabilities. Independent Verification Services
Limited was contracted to provide a managed
service post-completion of the sale. Accordingly, the
commercial due diligence included a review of their
capability, including the authorisation provided by
the New Zealand Customs Service.
Legal due diligence involved a review of customer
contracts, supplier contracts, the spin-off from IVS
Group and the related managed service agreement.
Technical due diligence included a review of
code, work practices, security protocols, data
management, and IT infrastructure.
52
Speedi
On 10 September 2021, TradeWindow entered
into an agreement for the purchase of the assets
of Tauranga based border clearance software
company, Speedi Software Limited. At the time of
the acquisition, Speedi Software Limited had been
operating for over 30 years.
Consideration was $1.45 million comprising
$725,000 cash and $725,000 in shares issued at
a share price of $9.20 per share (implying a post
10:1 share exchange price of $0.920 per share).
The transaction was part funded through a $725,000
five-year term loan from ASB. Full completion of the
transaction occurred on 1 October 2021. The Speedi
Software assets were acquired by TradeWindow’s
subsidiary Trade Window Services Limited.
TradeWindow completed commercial, legal and
technical due diligence on Speedi Software Limited.
TradeWindow outsourced elements of the
commercial and technical due diligence to a
competent service provider.
Commercial due diligence involved a review of the
customer concentration, financial performance,
pricing and business model, systems, and
capabilities. Staff were a core capability, therefore
the due diligence process involved interviewing the
two staff members.
Legal due diligence involved a review of customer
contracts, supplier contracts, employment
agreements, and the lease agreement.
Technical due diligence included a third-party
specialist review of code, work practices, security
protocols, data management, and IT infrastructure.
Cyberfreight
On 18 February 2021, TradeWindow entered into an
agreement for the purchase of the assets of Sydney
based freight forwarding software company,
Hi-Tech Freight Solutions (Aust.) Pty Limited
(“HTFSL”). Consideration was AU$2.25 million
comprising AU$750,000 in cash and AU$1.50 million
(NZ$1.63 million) in shares issued at a share price of
$8.64 (implying a post 10:1 share exchange price of
$0.864 per share). The transaction was part funded
through a NZ$420,000 five-year term loan from ASB.
TradeWindow also acquired at the same time
the assets of Cyberfreight Solutions Pte. Limited
(“CSPL”), a Singaporean company related to
HTFSL for SG$5,000 cash.
Full completion of these transactions occurred on
1 April 2021. The Cyberfreight assets were acquired
by TradeWindow’s subsidiary Trade Window
Services Limited.
HTFS and CSPL, together known as “Cyberfreight”,
had been operating a freight forwarding software
platform for over 20 years, with a roster of over
250 customers spanning New Zealand, Australia,
Singapore, China, Fiji, Papua New Guinea, Indonesia,
and Malaysia. Cyberfreight has since been re-
branded as "TradeWindow Freight".
The acquisition of Cyberfreight provided
TradeWindow with a cost-effective way to amass
a high-quality customer base, access to freight
management capabilities, and secure market share
in Australia and further afield.
TradeWindow completed commercial, legal, and
technical due diligence on Cyberfreight. At the time
of the acquisition, TradeWindow had the capability to
complete all elements of the due diligence in-house.
Commercial due diligence involved a review of the
customer concentration, financial performance,
pricing and business model, systems, and
capabilities. Staff were a core capability, therefore the
due diligence process involved interviewing all staff.
Legal due diligence involved a review of customer
contracts, supplier contracts, employment
agreements, and lease agreements.
Technical due diligence included a review of code,
work practices, security protocols, data
management, and IT infrastructure.
Based on unaudited management accounts,
Cyberfreight has booked unaudited revenue of
approximately $675,000 in the half year to
September 2021.
53
Freight Legend
On 26 August 2021, TradeWindow entered into
an agreement to purchase the FreightLegend
software solution from FreightLegend Limited.
Consideration was $100,000 in cash. Full completion
of the transaction occurred on 4 October 2021. The
FreightLegend business assets were acquired by
TradeWindow’s subsidiary TradeWindow Services
Limited. FreightLegend will become a module of the
TradeWindow Freight solution.
FreightLegend is a cloud-based software application
to help freight forwarders streamline how they
prepare and track freight quotes. FreightLegend
was the sole asset of FreightLegend Limited, a
pre-revenue start-up business at the time of the
acquisition, with only one trial customer.
Since the acquisition was for the FreightLegend
software only, no commercial due diligence was
required. Due diligence was limited to legal
and technical review, both of which were
conducted in-house.
54
Pre-acquisition historical
financial information
In certain instances, where a material business
acquisition has occurred prior to the Listing date,
financial information for the acquired business
in respect of the periods prior to the date of the
acquisition is potentially required to be included
in the Profile.
TradeWindow considers the acquisitions of
Prodoc, IVSOL, and Cyberfreight (but not Speedi
or FreightLegend) to be material given:
• In respect of Prodoc and Cyberfreight, these
acquisitions were strategically important in
providing a customer base for TradeWindow to
cross-sell its newly developed products. Without
these acquisitions, TradeWindow would not have
the practical reach to a relevant customer base.
• In respect of IVSOL, this acquisition was
strategically important in providing TradeWindow
with the capability to issue certificates of
origin under the delegated authority of the New
Zealand Customs Service, and therefore gives
TradeWindow a significant competitive advantage
(being one of two certificates of origin providers in
New Zealand, that we are aware of).
TradeWindow does not consider the acquisitions of
Speedi and FreightLegend to be material given:
• In respect of Speedi, the acquisition was for a
specific, niche functionality that is not material
to TradeWindow's overall product suite. As
compared with TradeWindow's proposed
market capitalisation on Listing, the value of
the acquisition ($1.45 million) is relatively
immaterial; and
• In respect of FreightLegend, this was an
acquisition of limited intellectual property only,
with the value of the acquisition being $100,000.
In addition, TradeWindow considers that the selected
financial information for Prodoc and IVSOL for the
pre-acquisition period is not material information.
TradeWindow's consolidated financial statements
include 15 months of financial information in
relation to Prodoc and IVSOL following the
acquisitions in January 2020, which provides
investors with a clear understanding of how the
acquired businesses/assets have been integrated
into the TradeWindow group.
Further, with most of the acquisitions described
above, a key part of the strategic rationale was the
ability to integrate the target business' software into
TradeWindow's suite of solutions and to access an
existing customer base and cross-sell other solutions
in the TradeWindow suite to those customers.
The historical financial performance of the target
businesses pre-acquisition is therefore not relevant
for investors in assessing the historical performance
of TradeWindow, as the integrated business is
expected to be materially different from what existed
pre-acquisition.
The acquisitions of IVSOL and Prodoc have been
accounted for in Trade Window Limited’s audited
financial statements, with 3 months to 31 March
2020, and 12 months to 31 March 2021. Refer to
Section 4: (TradeWindow's financial information
- Overview of historical financial performance).
The acquisitions of Cyberfreight, Speedi and
FreightLegend were completed subsequent to
TradeWindow's most recently completed accounting
period. Refer to Section 4 (TradeWindow’s financial
information - Events since FY2021).
55
Substantial product holders and
relevant interests in TradeWindow
As at the date of this Profile the following persons
have, and immediately after Listing will have, a
relevant interest in 5% or more of the Shares in
TradeWindow.
Technalise Limited (“Technalise”) is named as the
largest shareholder on page 2 of the FY2021 financial
statements. Technalise undertook the process of a
short form removal from the Companies Register,
also known as Section 318(1)(d) process (solvent
companies), which became final on 6 October 2021.
As part of the process, Technalise made an in-specie
distribution of its shares in TradeWindow to its
constituent shareholders on 27 July 2021.
PERSON AND NATURE OF RELEVANT INTEREST
NUMBER OF
SHARES
% OF
SHARES
ASB Bank Limited is the registered holder and beneficial owner of
Shares in the Company
• Subject to escrow restriction stated on page 63.
19,243,41022.4%
AJ Smith is the registered holder and beneficial owner of Shares
in the Company.
• Subject to escrow restriction stated on page 63.
14,773,41017.2%
Quayside Holdings Limited is the registered holder and beneficial
owner of Shares in the Company.
6,826,0407.9%
Holding des Mers du Sud is the registered holder and beneficial
owner of Shares in the Company.
5,229,2206.1%
56
Shareholdings held by
directors and senior managers
The table below sets out the equity securities
in TradeWindow that the directors and senior
managers of TradeWindow have an interest in
at the date of this Profile and will likely have an
interest in immediately after Listing.
DIRECTOR / SENIOR
MANAGERNATURE OF RELEVANT INTEREST
NUMBER OF
SHARES
% OF
SHARES
AJ SmithRegistered holder and beneficial owner.14,773,41017.2%
Kerry Michael FriendRegistered holder and beneficial owner of
3,853,550 Shares held by Kerry Friend and
YHPJ Trustees (2016) Limited as trustees
of the Tomodachi No.2 Trust.
3,853,5504.5%
Brendan Sean McEnroeIs the registered holder and beneficial
owner of 321,890 Shares.
Has a relevant interest in 83,700 Shares held
by DigiTui Limited as a director and majority
shareholder of DigiTui Limited.
405,5900.5%
Andrew John BalgarnieIs the registered holder and beneficial owner
of 193,860 Shares.
Has a 20% or more interest in Invicta Venture
Investments Limited (a registered holder
of Shares), resulting in Andrew being deemed
to have a relevant interest in a further
476,210 Shares held by Invicta Venture
Investments Limited.
Has a relevant interest in 30,280 Shares held
by Alaska Investment Trust Limited as trustee
of the Alaska Investment Trust.
Has a relevant interest in 178,940 Shares held
by Itsu Investments Limited as trustee of the
Itsu Investment Trust.
879,2901.0%
Deidre Lee CampbellRegistered holder and beneficial owner.101,5300.1%
57
TradeWindow also has 585,640 options on issue
("Options") pursuant to its existing employee share
option plan ("Pre-Listing ESOP"). Provided that the
exercise conditions are met, each Option is able to
be exercised for one ordinary share in TradeWindow
on the relevant vesting date. The exercise price is
$0.00920 per Share. No further Options will be issued
under the Pre-Listing ESOP. The number of Options
and relevant vesting periods for such Options are set
out in the table below:
Other equity securities
of TradeWindow
VESTING PERIODNUMBER OF OPTIONS
FY2022331,675
FY2021225,799
FY202428,166
TOTAL585,640
Immediately following Listing, TradeWindow will
issue up to 105,000 Shares to its employees as a
one-time bonus to all staff employed on the Listing
date, which equates to $1,000 net of tax value per
person, grossed for marginal income tax rates, with
the number of shares to be issued calculated based
on the Listing price of $0.92 per share. TradeWindow
believes that employee share ownership is a key
factor in motivating and retaining employees.
TradeWindow proposes to issue these Shares in
accordance with Listing Rule 4.6.1.
As at the date of this Profile, there are no classes of
TradeWindow equity securities on issue other than
the Shares and Options.
TradeWindow had convertible notes (“Notes”) on
issue as stated on page 23 of the FY2021 financial
statements. The Notes were issued to 38 wholesale
investors, including ASB Bank Limited and Quayside
Holdings Limited who held combined 47.7% of the
Notes. The Notes were converted to ordinary shares
in full on 25 August 2021 at a conversion price of
$8.07 per share (implying a post 10:1 share exchange
price of $0.807 per share).
Under the Company's constitution, the board may
issue Shares or other equity securities, to any
person and in any number it thinks fit. The issue of
further Shares which rank equally with, or in priority
to, any existing Shares, whether as to voting rights,
distributions or otherwise, is deemed not to be an
action affecting the rights attaching to those existing
Shares. However, the issue of new equity securities in
TradeWindow is governed by the NZX Listing Rules,
which requires the approval by ordinary resolution of
the holders of the Shares to the issue of new equity
securities, except in certain circumstances set out in
the NZX Listing Rules.
58
The table below sets out the total of the remuneration
and the value of other benefits received by
each director (in their capacity as a director) of
TradeWindow in respect of TradeWindow or any other
member of the TradeWindow group during FY2021
and expected to be received in FY2022.
The remuneration and other benefits to be provided
to the directors during the next financial year (being
FY2023) are expected to be consistent with the
amounts payable from November 2021 for the
remainder of FY2022 on an annualised basis. It
is anticipated that one additional director will be
appointed during the remainder of FY2022. As at
the date of this Profile, the directors are expected
to receive the following annual directors’ fees in
FY2023:
The overall director fee pool (the total fees available
for payment to directors in their capacity as directors)
has been fixed at a maximum of $500,000 per
annum. Executive directors are not remunerated in
their capacity as a director.
The directors are entitled to be reimbursed for
all reasonable travel, accommodation and other
expenses incurred by them in connection with their
attendance at board or shareholder meetings, or
otherwise in connection with TradeWindow business.
Director remuneration
and benefits
POSITIONFEES PER ANNUM
Chair$95,000
Directors (other than the chair)$60,000
Committee chair$8,000-$10,000
Committee members$4,000-$5,000
DIRECTOR
REMUNERATION
AND VALUE OF
OTHER BENEFITS
RECEIVED IN FY2021
EXPECTED REMUNERATION AND VALUE OF OTHER
BENEFITS EXPECTED TO BE RECEIVED IN FY2022
TOTALBASE FEECOMMITTEE WORKTOTAL
Alasdair MacLeod$0$43,542$5,958$49,500
Diana Puketapu$0$27,500$6,417$33,917
Phil Norman$0$27,500$2,292$29,792
AJ Smith$0$0$0$0
Kerry Friend$0$0$0$0
59
The number of employees or former employees
of TradeWindow who in FY2021 received
remuneration and any other benefits in their
capacity as employees that was $100,000 per
annum or more are shown in the table below.
TradeWindow's growth plans rely on attracting
and retaining highly skilled and experienced
employees. During FY2022 TradeWindow
continues to build its team for future growth
ambitions and to build a preferred employer
status. Thus FY2022 remuneration and benefits
are expected to increase around 70% in FY2022
(on FY2021).
Employee remuneration
and incentives
REMUNERATIONNUMBER OF EMPLOYEES
100,001 – 110,0002
110,001 – 120,0002
120,001 – 130,0003
140,001 – 150,0001
150,001 – 160,0001
190,001 – 200,0001
230,001 – 240,0001
240,001 – 250,0002
250,001 – 260,0001
280,001 – 290,0001
290,001 – 300,0001
460,001 – 470,0001
60
Each of TradeWindow’s senior leadership team
(including AJ Smith and Kerry Friend) have
entered into employment agreements with
Trade Window Limited.
TradeWindow has granted indemnities, as
permitted by the Companies Act 1993, in
favor of each of its independent and executive
directors. TradeWindow maintains insurance
for its directors and officers.
ASB holds 19,243,410 Shares or 22.4% of
TradeWindow. ASB is TradeWindow’s primary
banker. In conjunction with loans provided to
TradeWindow Services Limited, ASB holds
a General Security Deed over TradeWindow
Services Limited, and Trade Window Limited
has provided ASB with an unlimited guarantee
and indemnity with respect to those loans.
On Listing, the board will have in place the following
board policies, charters and other governance
documents that are typical for a company listed
on the NZX Main Board:
• Board Charter
• Audit and Risk Committee Charter
• Nomination and Remuneration Committee
Charter
• Code of Corporate Governance
• Code of Conduct
• Diversity and Inclusion Policy
• Auditor Independence Policy
• Remuneration Policy
• Dividend Policy
• Continuous Disclosure Policy
• Securities Trading Policy
• Risk Management Policy
• Protected Disclosures Policy
• Takeovers Protocol
Following Listing, in accordance with the NZX Listing
Rules and the constitution, the board will have the
power to appoint additional directors (including an
executive director) to the board from time to time,
provided that any director appointed by the board
must retire and seek re-appointment at the next
annual shareholders’ meeting of TradeWindow.
EMPLOYEE INCENTIVES
Following its Listing on the NZX Main Board,
TradeWindow intends to establish a new
employee share option plan and an employee
share purchase scheme, to incentivise and retain
employees. No grants under the new employee
share option plan or issuances under the
employee share purchase scheme have
been made as at the date of this Profile.
Material interests
in TradeWindow
Other material
governance disclosures
61
Key features
of the shares
03
All Shares quoted on Listing will be fully paid ordinary
shares in TradeWindow which rank equally with each
other and all other ordinary shares in TradeWindow
on issue. The key features of the Shares do not differ
from those that apply to other ordinary shares in a
company generally. Shareholders who wish to sell
their Shares on the NZX Main Board after Listing must
contact a broker and have a Common Shareholder
Number (“CSN”) and an authorisation code (“FIN”).
Key features
The payment of a dividend by the Company is at the
discretion of the board and will be a function of a
number of factors, including the general business
environment, operating results, investment
opportunities and financial condition of the Company.
While it is the aim of the Company that, in the longer
term, its financial performance and position will enable
the payment of dividends, at the date of this Profile, the
Company does not intend, or expect, to declare or pay
any dividends in the immediately foreseeable future,
given TradeWindow’s focus on long term growth.
Dividend policy
62
If you wish to sell your Shares on the NZX Main Board,
after Listing, you must contact an NZX Firm and have
a CSN and a FIN. Opening a new broker account can
take a number of days depending on the NZX Firm’s
new client procedures. If you do not have a CSN,
you will:
• be assigned one when you set up an account
with an NZX Firm; or
• receive one from the Share Registrar.
Each of ASB Bank, AJ Smith, Kerry Friend and
YHPJ Trustees (2016) Limited as trustees of the
Tomadachi No. 2 Trust, and Stephen Cox
(“Escrowed Shareholders”) have entered into
escrow arrangements with TradeWindow in
respect of the following Shares (representing
90% of the Shares owned by each Escrowed
Shareholder) ("Escrowed Shares"):
for ASB Bank Limited, 17,319,069 Shares;
for AJ Smith, 13,296,069 Shares;
for Kerry Friend and YHPJ
Trustees (2016) Limited
as trustees of the Tomadachi
No. 2 Trust, 3,468,195 Shares;
for Stephen Cox, 3,791,763 Shares.
Restrictions
What you need to do
to sell your Shares
Under these arrangements, each Escrowed
Shareholder has agreed not to sell or otherwise
dispose of any Shares where such sale or disposal
would result in the Escrowed Shareholder holding
less than their specified number of Escrowed Shares
in the period between Listing and the first day after
the date on which TradeWindow releases to NZX
its results announcement in respect of the half year
ended 30 September 2022. The Escrowed Shares
held by the Escrowed Shareholders represent, in
aggregate 44.0% of the total number of Shares on
issue at the time of Listing.
There are customary carveouts from the escrow
arrangements. In addition, for ASB Bank Limited, a
carve out is provided where the transfer is required
by law or regulator, or where the transfer is required
to avoid or mitigate adverse reputational damage for
ASB Bank Limited or its affiliates.
If you do not have a FIN it is expected that you will
be sent one as a separate communication by the
Share Registrar. If you have an NZX Firm and have
not received a FIN by the date you want to trade your
Shares, your NZX Firm can obtain one, but may pass
the cost for doing so on to you. In certain cases where
an NZX Firm uses a bare trustee structure to hold
your Shares, you may not have a CSN or a FIN. Please
contact your NZX Firm to determine what you need
to do to sell your Shares.
If you sell your Shares, you may be required to pay
brokerage or other sale expenses. You may also be
liable for tax on the sale of your Shares. You should
seek your own tax advice in relation to your Shares.
63
TradeWindow’s
financial information
04
For the purposes of compiling the historical financial
information presented in this section, TradeWindow has
utilised the audited consolidated financial statements of
Trade Window Limited which are available on TradeWindow’s
website and the Documents section of the NZX’s website.
No historical financial statements for Trade Window
Holdings Limited are available as the entity was recently
established as part of this Listing process. Trade Window
Limited is the main operating entity and has historically
prepared consolidated audited financial statements in
accordance with NZ GAAP (Tier 2) standards.
As a listed entity, TradeWindow will prepare its future
financial statements to NZ GAAP (Tier 1) standards. This
will require TradeWindow to provide additional disclosures,
most notably those with regard to impairment testing
of intangibles, financial risk management, operating
segments, earnings per share, the TradeWindow group's
employee share ownership plan, and an operating cashflow
reconciliation among other disclosures.
If you do not understand this financial information, you
should seek advice from a financial advice provider or
an accountant.
The financial information contained in this section has
been prepared by TradeWindow, is presented in New
Zealand dollars, and is rounded, which may result in some
discrepancies between the sum of the components and the
totals within tables, and certain percentage calculations.
Introduction
64
Selected financial information
28. EBITDA is a non-NZ GAAP measure. Refer to Section 4 (TradeWindow’s financial information - Reconciliation of Non-NZ GAAP to NZ GAAP financial information).
29. Refer Section 4 (TradeWindow’s financial information - Overview of historical financial performance), and Section 4 (TradeWindow’s financial information - Events since FY2021).
30. Subscription customers are those that are licensing TradeWindow’s software and generate monthly subscription.
FINANCIAL INFORMATION (NZ$000)
FY2020
10 months ending
31 March 2020
FY2021
12 months ending
31 March 2021
Revenue3571,642
Other Income281702
EBITDA
28
(2,820)(5,864)
Loss for the year
29
(3,133)(6,598)
Dividends on all equity securities of the issuer00
Total Assets7,2146,138
Cash and cash equivalents
29
1,2981,413
Total Debt2,2311,710
Total Liabilities3,7212,644
Net Cash Flow from Operating Activities
29
(2,544)(4,576)
SELECTED OPERATIONAL INFORMATION
FY2020
10 months ending
31 March 2020
FY2021
12 months ending
31 March 2021
Number of subscription customers
30
107123
Average Revenue per Subscription Customer
(per month)
$936$1,022
65
This section provides an overview of the historical
financial performance of TradeWindow and
should be read in conjunction with Section 4
(TradeWindow’s financial information - Selected
financial information) on page 65.
FY2020 FINANCIAL PERFORMANCE
While TradeWindow was established in 2018, it was
non-trading until June 2019. During this first year
of operation, TradeWindow incurred $3.7 million
of operating expenses, establishing a Product
Development team in the Auckland office.
The acquisitions of the Prodoc and IVSOL businesses
/assets in January 2020 generated the trading
revenue of $0.4 million during the period to 31 March
2020. Other income was received by way of research
and development grants totaling $0.3 million.
FY2021 FINANCIAL PERFORMANCE
TradeWindow’s operating expenditure increased
to $9.3 million reflecting a full twelve-month period
as well as increased investment in the Product and
Commercialisation teams.
Trading revenue increased to $1.6 million, primarily
reflecting a full twelve months of Prodoc and IVSOL
revenue from existing customers, but also saw the
commencement of incremental income from new
customers. Other income comprised of research
and development grants of $0.4 million and a
COVID-19 wage subsidy of $0.3 million.
EVENTS SINCE FY2021
Since 31 March 2021, TradeWindow has raised
$15.0 million of new equity from existing and
new shareholders, as detailed in Section 4
(TradeWindow's financial information - Capitalisation
table). It also completed the acquisitions of Hi-
Tech Freight Solutions (Aust.) Pty Limited, Speedi
Software Limited and FreightLegend Limited,
Overview of Historical
Financial Performance
partially funded by new term loans (as detailed on
pages 51 to 54). Further, the Prodoc vendor loan
was repaid in July 2021 and term loans continue to
be repaid on schedule. These transactions have a
combined (unaudited) impact on TradeWindow’s
balance sheet as follows:
• Increased cash and cash equivalents
of $14.3 million
• Increased fixed and intangible assets
of $4.0 million
• Increased interest bearing loans and
borrowings of $0.9 million
• A corresponding increase in equity
of $17.4 million
In May 2021, TradeWindow entered a lease for office
premises in Level 4, Partners Life House, 33-45
Hurstmere Road, Takapuna. International Financial
reporting standards require this to be capitalised on
commencement, increasing both right of use assets
and lease liability by $1.2 million. TradeWindow
expects to enter a lease for office premises at Sydney
Corporate Park, Alexandria, NSW, Australia, with a
commencement date expected to be on or around
the 1 December 2021 for a minimum term of four
years at A$0.16 million per annum.
In the notes to the FY2021 financial statements,
TradeWindow disclosed that as an early-stage
business it was projecting to continue to incur
negative operating cashflows for a period of at least
12 months from the date of issuing the FY2021
financial statements. Since this date, the $15 million
capital raise has been successfully completed and
net operating cash outflow has been materially in line
with expectation. However, still being an early-stage
business, the commercial feasibility and sales from
Cube and related products at scale, and the time
frame it may take, remain materially uncertain.
Refer to Section 5 (Risks to TradeWindow’s
business and plans).
66
Implied market capitalisation is the value of all of the
TradeWindow’s issued equity securities, as implied
by the Listing Price. It tells you what TradeWindow is
proposing as the value of TradeWindow’s equity.
Implied enterprise value is a measure of the total
value of the business of TradeWindow, as implied by
the Listing Price. Implied enterprise value is the
31. Estimated net cash as at date of Profile
Capitalisation
table
amount that a person would need to pay to acquire
all of TradeWindow’s equity securities, minus
TradeWindow’s cash on hand, plus the amount that
would be required to settle all of TradeWindow’s
borrowings. It is a measure of what TradeWindow is
proposing the business of TradeWindow as a whole
is worth.
The board has ascribed a listing price of $0.92 per
Share (“Listing Price”), based on its view of the equity
value of TradeWindow.
In ascribing the Listing Price, the board considered
the equity raising conducted by TradeWindow
between May and September 2021, where
TradeWindow raised $15 million at a subscription
price of $9.2011 per Share (implying a post 10:1
share exchange price of $0.9201 per Share).
The new equity was raised from 48 investors
including ASB Bank Limited and Quayside Holdings
Limited, who purchased a combined 57.5% of the
Shares. The offer was initially made to existing
investors, who took up 84.4% of the $15 million, and
12 new wholesale investors took up the remaining
$2.35 million.
The board also considered the secondary sale
conducted by three existing shareholders between
August and September 2021, where 195,462 existing
shares were sold to selected wholesale investors at
the same price as the equity raising above.
At the time of Listing, TradeWindow will have 150
registered holders, including 13 holders through a
custodial account. Four have entered into escrow
arrangements with TradeWindow in respect of their
shareholdings as noted in more detail on page 63.
The Listing Price implies the valuation metric as set
out in the table below. The price at which Shares will
be traded on the NZX Main Board following Listing
will depend on the demand for, and supply of, Shares
and will be subject to change.
NUMBER OF SHARES ON ISSUE AT LISTING86,031,600
Listing price$0.92
Implied market capitalisation$79.1 million
Net cash
31
$8.8 million
Implied enterprise value (excluding lease liabilities under NZ IFRS 16)$70.3 million
67
The table below reconciles the non-NZ GAAP
measure “EBITDA”, and the NZ GAAP “Loss for
the year” presented in Section 4 (TradeWindow's
financial information - Selected financial
information). Apart from EBITDA, all items in
this table are sourced from TradeWindow’s
audited financial statements.
Reconciliation of
Non-NZ GAAP to
NZ GAAP financial
information
Financial Information (NZ$000s)FY2020FY2021
Loss for the year(3,133)(6,598)
Income tax expense (benefit)2(476)
Net financing costs33141
Depreciation and amortisation2781,070
EBITDA(2,820)(5,864)
68
Risks to
TradeWindow’s
business and plans
05
This section describes the risks that
TradeWindow is aware of that exist or are likely
to arise that significantly increase the risk to
TradeWindow's financial position, financial
performance or stated plans.
We have outlined our assessment of the
likelihood, nature, and potential magnitude
of circumstances if they were to occur. This
assessment is based on the knowledge of the
Board as at the date of this Profile. There is no
guarantee or assurance that the importance of
each risk will not change or that other risks will
not emerge over time.
Introduction
69
WHAT IS IT?
TradeWindow’s solutions involve the processing and the cloud hosting and storage, of
customers’ information, including confidential and proprietary data of organisations.
There is a risk that security breaches and incidents could result in potential
enforcement action and monetary fines from data protection authorities, litigation by
customers, termination of customer contracts, potential indemnity obligations, and
potential remediation costs.
WHY IS IT SIGNIFICANT?
TradeWindow could be faced with enforcement action and monetary fines from data
protection authorities, litigation by customers, termination of customer contracts,
potential indemnity obligations, and potential remediation costs.
Further, the occurrence of such security breaches or incidents, or the perception that
one has occurred, could also result in a loss of customer confidence in the security of
TradeWindow’s solutions or damage to the TradeWindow brand and reputation, reduce
demand for TradeWindow’s solutions, disrupt normal business operations, and require
TradeWindow to spend material resources to investigate or correct the breach and
prevent future security breaches and incidents.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
TradeWindow considers that it operates in accordance with high standards of
data protection and frequently identifies and reports on any weaknesses or issues.
TradeWindow has in place backup systems designed to ensure that data and business
continuity is maintained in the event of any disruption.
TradeWindow considers that the impact of a material cyber-attack would be particularly
significant if private customer data were to become public. TradeWindow could be
faced with regulatory investigations and civil litigation, as well as having a significant
reputational impact.
Security breaches and unauthorised
access to customer data
70
WHAT IS IT?
TradeWindow’s solutions are used to run mission-critical processes for customers.
There is a risk that undetected errors, defects, failures, or bugs may occur in
TradeWindow’s solutions, or certain IT architecture especially when updates, or
capabilities are first introduced, or when new versions or updates are released which
may make solution processing capacity, or other use ineffective, corrupt, or unsuitable
for the designed purpose, or incapable of scaling in line with customer expectations.
Further, TradeWindow’s solutions are often installed and used in large scale computing
environments with different operating systems, software products and equipment, and
data source and network configurations, which may cause errors or failures or may
expose undetected errors, failures, or bugs.
WHY IS IT SIGNIFICANT?
Errors or defects may make TradeWindow’s solutions ineffective, corrupt, or unsuitable
for the designed purpose. The occurrence of such incidents may lead to customers
becoming dissatisfied and ceasing to use TradeWindow’s solutions which could be
damaging to TradeWindow's brand and reputation.
Widespread or more systematic bugs or defects could result in a disruption of normal
business operations, requiring TradeWindow to spend material resources to investigate
or correct the errors or malfunctions and provide additional support to customers to
resolve any issues. TradeWindow may be unable to retain customers or attract new
customers, due to a poor reputation for quality, performance, and reliability.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
Incidents of solution malfunction or errors are likely for a business that frequently
provides new features, updates, and add-ons to its software. The probability of
such incidents occurring is likely to increase as TradeWindow’s customer base
grows. TradeWindow’s solutions will be installed and used in large scale computing
environments with different operating systems, software products and equipment, and
data source and network configurations, again increasing the risk of errors, failures, or
undetected bugs.
Prior to commercial release, TradeWindow’s solutions are put through several phases
of testing including working with a small group of customers, to conduct ‘real-world’
usability testing.
Once a solution has been commercially released, risk is further mitigated with a
continued focus to deliver comprehensive customer support in the event of product
failure, to minimise the negative impact on customers.
Real or perceived errors, failures,
defects, or bugs
71
WHAT IS IT?
TradeWindow’s continued success is dependent upon its ability to attract and retain
skilled and qualified personnel, in particular, members of the senior leadership team,
software engineers, customer success, and sales teams with extensive domain
expertise. The majority of TradeWindow’s employees are located in New Zealand
and Australia, both markets have a relatively small pool of candidates with enterprise
software sector experience. The situation has been worsened by immigration
restrictions associated with the COVID-19 pandemic. A limited pool of labour coupled
with strong demand from a broad range of well capitalised businesses including banks,
insurance companies, professional services firms, and multinationals is increasing the
cost of attracting and retaining talent.
WHY IS IT SIGNIFICANT?
TradeWindow may not be able to attract and retain adequately skilled and experienced
employees, or be able to find effective replacements for individuals who leave
TradeWindow, including in particular, members of the senior leadership team referred
to on pages 48 and 49.
TradeWindow relies on the technological expertise of its employees to maintain and
develop intellectual property, the loss of key personnel may lead to a loss of operational
knowledge, technology capabilities, key partner and customer relationships, and
industry expertise, as well as delays in the development, launch and commercialisation
of new software features or applications.
The loss of key employees may slow the product development process which
could provide well resourced competitors with the opportunity to replicate features,
functionality, or entire solutions, and consequently erode TradeWindow’s competitive
advantages referred to on page 30.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
The majority of TradeWindow’s employees are located in New Zealand and Australia,
which are both competitive markets for skilled and experienced talent.
TradeWindow has in place a number of measures intended to mitigate the risks
regarding employee attraction and retention, including:
• the implementation of an appropriate employee share scheme with milestones
linked to targets of TradeWindow, to allow employees to be able to share in the
success and growth of the company in a meaningful way;
• putting in place an appropriate employee compensation structure and benefits
programme for an organisation of its size and nature which will continue to
be monitored;
• provision of paid courses and on-the-job training providing employees with
the tools and support needed to define a career pathway best matched to their
ambitions, skills, and experience;
• strong focus on culture and values of the company, to create a reputation of a
market-leading employer; and
• the provision of wide-ranging staff benefits with a focus on wellbeing, including
the provision of paid health insurance, flexible working arrangements and
additional leave days.
Employee attraction, retention
72
WHAT IS IT?
TradeWindow serves customers working on the front-line of global trade. Accordingly,
disruptions to their supply chains including, but not limited to, the availability of
shipping containers, the frequency of port calls and ship capacity, the frequency of
flights and aircraft capacity, bio-security incursions, port industrial action, and/or
port infrastructure issues could adversely affect the volume of shipments processed
through TradeWindow’s solutions and therefore revenues generated. Further, the
supply of raw materials or components could delay or stop production of goods, this
could reduce the volume of shipments processed through TradeWindow’s solutions.
Prolonged supply chain disruptions could lead to current and prospective customers
leaving the market, thus a permanent reduction in demand for TradeWindow’s solutions.
WHY IS IT SIGNIFICANT?
Frequent and/or prolonged disruptions to the supply chain may lead to offshore
customers seeking alternative suppliers either closer to, or within their home market.
Disruptions reduce the productivity of shipping lines, ports, terminals, airlines, and
logistics companies, to mitigate the impact, these parties may choose to pass on the
costs to exporters and importers by increasing fees. TradeWindow’s customers may not
be able to absorb or pass on these costs, making international trade either unprofitable,
or their products uncompetitive on the world market.
Transactional fees make up a 53% of TradeWindow’s trading revenues. A reduction
in international trade volumes due to supply chain disruptions could therefore have a
material adverse impact on TradeWindow’s operating and financial performance
and prospects.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
The majority of TradeWindow’s current customers are located in New Zealand and
Australia, most of which are reliant on international trade for a significant proportion
of their revenues. Customers are concentrated in the primary sectors, with some of
the largest players in meat, horticulture, seafood, and timber using TradeWindow’s
solutions. Correspondingly, TradeWindow operational and financial performance is
highly correlated with the strength of the economies in which it has customers.
Supply chain disruptions
73
WHAT IS IT?
Economic shocks can occur at random. The interconnected nature of global supply
chains means that rapid and unexpected changes to macroeconomic variables
including, but not limited to, interest rates, commodity prices, household consumption,
labour markets, trade barriers and sanctions, pandemics, war, and terrorism. Large
shocks can have a far-reaching impact on either supply or demand in any sector of
the economy.
WHY IS IT SIGNIFICANT?
Demand and supply shocks may have an adverse impact on the volume of international
trade facilitated by TradeWindow’s solutions, and consequently the Company’s
operational and financial performance.
Financial shocks may make it difficult for TradeWindow to access capital which could
constrain growth, either in new capabilities, or the acquisition of further businesses.
Economic shocks caused by changes to government policy or sanctions could slow or
stop trade between countries. Governments may use manual paper-based trade as a
non-tariff trade barrier, thereby purposely slowing the adoption of digital trade.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
TradeWindow possesses cash reserves which, in the short term, would help the
business withstand volatility caused by short-term economic shocks. Apart from the
two office leases, TradeWindow has few long-term contracted obligations, therefore
Management considers that it would be able to reduce operating costs in the face of
a more prolonged economic shock. However, to the extent an economic shock was
sufficiently pronounced or continued for an extended period of time, TradeWindow's
operating revenues and cash position may be materially adversely impacted.
Economic shocks
74
WHAT IS IT?
TradeWindow competes against a number of software vendors and service providers
and, in particular, global providers of freight forwarding, and digital trade software,
with some competitors competing with TradeWindow across multiple applications
and some focusing on specific applications. New competitors may enter the market
in the future, or existing competitors may enhance their functionality, reliability, cost
effectiveness, pricing, customer support, and perceptions of value to become more
competitive with TradeWindow.
WHY IS IT SIGNIFICANT?
Some competitors have significantly more financial and operational resources than
TradeWindow currently has, or may develop, and broader distribution relationships
with sales partners, and customers. Competitors also may have substantially broader
and more diverse product and service offerings, allowing them to leverage their
relationships with distribution partners and customers based on other products or
incorporate functionality into existing products to gain business. Increased competition
could adversely impact TradeWindow’s ability to attract and retain customers, or the
price at which it offers products and services, and reduce TradeWindow's market share,
in each case having an adverse impact on TradeWindow’s operating and financial
performance and prospects.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
TradeWindow anticipates competition in the digital trade segment of the TradeTech
market to continue from existing and potentially new competitors.
TradeWindow has in place measures aiming to mitigate the risk of losing customers to
competition, including through continued engagement, attentive customer service and
support, and a pipeline of updates to features and functionality which are designed to
improve the user experience.
Operating in competitive markets
75
WHAT IS IT?
There is a risk that TradeWindow’s activities, including past, current, or future activities,
may have caused or cause it to inadvertently contravene laws and regulations in one
or more of the jurisdictions in which it conducts business. TradeWindow has offices,
employees, and customers in eight countries, therefore the Company is impacted by
numerous laws and regulations including those relating to privacy, data protection,
cyber security and other internet regulations, anti money laundering, employment and
workplace laws, sales practices, securities laws, and laws relating to requirements
of corporations and preparation of financial information. Other examples include
laws relating to corrupt practices and bribery, import and export control laws, tariffs,
trade barriers, economic sanctions and other regulatory changes which may impact
TradeWindow’s offerings in certain foreign markets, or other significant changes
including trade disputes.
WHY IS IT SIGNIFICANT?
Should TradeWindow breach any relevant laws or regulations, it may be subject to
potential enforcement action and monetary fines from authorities.
Changes to the legal or regulatory frameworks in any of the jurisdictions TradeWindow
operates may require the Company to reconsider how it conducts business, which
may involve additional expenses (including on regulatory compliance), may require
TradeWindow to cease carrying on business in a particular way or jurisdiction, or may
create uncertainties as to the manner and conditions under which TradeWindow may
conduct business. A failure to comply with applicable law in any of these jurisdictions
could result in a material financial and reputational cost to TradeWindow.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
While TradeWindow’s policies and procedures are designed to comply with laws and
regulations of a particular subject matter generally, there remains some risk that those
controls are not sufficient to prevent it from contravening the laws and regulations
of all jurisdictions in which it does business. This is particularly relevant to laws and
regulations which, from experience to date, TradeWindow believes are not material or
particularly applicable to the conduct of TradeWindow’s business.
Compliance with laws
and regulations
76
WHAT IS IT?
TradeWindow is a software business with a large proportion of the Company’s assets
being intellectual property including software code, business processes, know how,
patents, copyrights and trademarks. TradeWindow relies on such intellectual property
rights and there is a risk that it may fail to adequately protect its rights for a number
of reasons. There is also a risk that certain intellectual property may be obtained
(or inappropriately used) by third parties, for example, through certain breaches of
agreements, fraud, or theft by third parties.
WHY IS IT SIGNIFICANT?
TradeWindow’s value to a large extent is attributed to its intellectual property, protection
of these rights are critical for maintaining the Company’s competitive position,
reputation, and future revenues. If intellectual property rights are not adequately
protected it may result in the following any of the following scenarios:
• certain intellectual property may be obtained (or inappropriately used) by third
parties, for example, through certain breaches of agreements, fraud or theft;
• intellectual property being misused or misappropriated, including unauthorised
use, disclosure, or reverse engineering of TradeWindow's technology; and
• employees or third-party counter-parties inappropriately disclosing confidential
information on its systems, policies, and procedures.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
In New Zealand, TradeWindow can ensure all registrable forms of intellectual property
are properly registered and are kept up to date. In addition, TradeWindow will continue
to ensure the terms and conditions of employees, contractors and consultants ensure
that there are no challenges to intellectual property developed in the course of the
relevant employee/contractor’s engagement with TradeWindow.
As TradeWindow expands its international activities, the Company’s exposure to
unauthorised copying and use of TradeWindow’s platform, its applications, and
proprietary information may increase. There is also a risk that certain intellectual
property, including patent, trademark, copyright, and trade secret protection may not be
available in every country in which TradeWindow’s offerings are available.
There is a risk that actions taken by TradeWindow, such as data encryption, access
controls, information classification and training and general awareness may not be
adequate in all circumstances and may not prevent the misuse or misappropriation of
intellectual property or deter the independent development of similar products
by others.
Further, although TradeWindow endeavors to enter into non-disclosure agreements with
its employees, licensees and other third parties who may have access to intellectual
property and confidential and proprietary information, TradeWindow cannot assure that
these agreements or other steps the Company has taken will prevent unauthorised use,
disclosure, or reverse engineering of its technology.
Inability to protect intellectual
property rights
77
WHAT IS IT?
TradeWindow has acquired five businesses, and will continue to seek strategic
acquisition opportunities, in order to build a customer base at a lower cost than using
an organic sales process, as well as build technological capabilities that are difficult
and expensive to replicate. TradeWindow integrates acquisitions into the group and
looks to cross-sell and up-sell to the acquired customer base. There are a number of
inherent risks with strategic acquisitions, including the risk of acquired businesses not
producing the forecasted revenue or cost synergies, risks around integration of the
acquired business into the TradeWindow business and risks around transfer and legal
ownership of intellectual property of the acquired businesses.
WHY IS IT SIGNIFICANT?
TradeWindow’s performance is dependent on the efficient allocation of capital into
initiatives that generate positive returns. The allocation of capital to a non-performing
acquisition is at the opportunity cost of investing in a different acquisition opportunity,
marketing campaigns, or research and development projects. A non-performing
acquisition may result in the partial or complete write-off of the capital invested.
Further, TradeWindow's revenue growth to date has been driven in substantial part as a
result of acquisitions it has made. TradeWindow's ability to continue to achieve revenue
growth through acquisition is dependent on identifying appropriate acquisition targets,
negotiating appropriate terms with them, and being able to source adequate capital to
fund the acquisition.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
TradeWindow develops a business plan in support of each acquisition. The business
plan considers alternative options including building in-house capabilities, a joint
venture, or other commercial arrangements. To gain the support of TradeWindow’s
management and board, a business case needs to demonstrate positive returns and/or
strategic advantages.
TradeWindow’s acquisition process also includes commercial, legal, and technical
due diligence, albeit such processes are in each case dependent on the quality of
information provided by the target company.
TradeWindow has structured past acquisitions with shares as part of the consideration
to ensure alignment between the vendor and TradeWindow. Future acquisitions may
include the vendor being subject to earn out provisions.
Strategic acquisition risk
78
WHAT IS IT?
TradeWindow is an early-stage software business operating in a nascent market and
is therefore a higher risk investment than a more established business. TradeWindow
has employed, and is likely to continue to employ, a growth strategy where spending
exceeds revenues, a situation commonly referred to as "cash burn". Operations to date
have been financed by capital raised from investors alongside a growing revenue base.
There is a risk that the market moves more slowly than anticipated to adopt digital trade
solutions. As TradeWindow is still an early-stage business, the commercial feasibility
and sales from TradeWindow Cube and related products at scale, and the timeframe it
may take for this to develop, remain materially uncertain.
WHY IS IT SIGNIFICANT?
TradeWindow's ongoing viability relies on continued growth in revenues driven by
customer acquisition. If, for any reason, TradeWindow experienced a decreased rate of
customer acquisition and revenue growth, TradeWindow may need to find additional
funding to finance operations until revenues exceed expenses.
TradeWindow’s performance and commercialisation of products at scale depends on
the widespread adoption of digital trade solutions by mainstream exporters, importers,
freight forwarders and customs brokers. Lower than anticipated adoption of digital
trade solutions and therefore demand for TradeWindow products would mean lower
revenues and a need for TradeWindow to raise additional capital or seek other
financial support.
OUR ASSESSMENT OF THE
LIKELIHOOD, NATURE,
AND POTENTIAL MAGNITUDE
OF ANY IMPACT
TradeWindow’s customers include a number of well recognised brands that have
gained operational efficiencies from using the Company’s software solutions. To
date, these initial customers have generated demand for TradeWindow by attracting
other businesses in their sector; fast followers seeking to realise similar operational
efficiencies.
However, to the extent that this customer growth does not continue, this will have a
material impact on TradeWindow's ability to scale, and could have a material adverse
impact on TradeWindow's cash position.
Early-stage business
79
Tax
06
Tax can have significant
consequences for investments.
If you have queries relating
to the tax consequences of
investing in Shares, you should
obtain professional advice on
those consequences.
80
Where can I find
more information
07
Once TradeWindow is
listed, it will be required
to make half-yearly and
annual announcements
to NZX and such other
announcements required
by the NZX Listing Rules
from time to time. You
will be able to obtain this
information free
of charge from:
nzx.com/companies/
TWL/documents
Further information
relating to TradeWindow
and its Shares (including
the Constitution and its
most recent financial
statements) is available
at: tradewindow.io/
investor-centre
Further information in
relation to TradeWindow
is available on the
Companies Office
register of the Ministry
of Business, Innovation
and Employment.
This information can
be accessed on the
Companies Office
website at: business.
govt.nz/companies
81
Contact
information
08
LISTING ISSUER
Trade Window Holdings Limited
Level 4, Partners Life House,
33-45 Hurstmere Road
Takapuna
Auckland 0622
09 836 4200
SHARE REGISTRAR
Computershare Investor Services
New Zealand
Level 2,159 Hurstmere Road,
Takapuna,
Auckland 0622
09 488 8700
LEGAL ADVISOR
Russell McVeagh
Level 30, Vero Centre,
48 Shortland Street,
Auckland 1010
09 367 8000
FINANCIAL ADVISOR
Northington Partners
Level 33, Vero Centre,
48 Shortland Street,
Auckland 1010
09 913 4600
AUDITOR
KPMG
18 Viaduct Harbour Avenue,
Auckland 1010
09 367 5800
82
83
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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