Brisbane company Redflow has announced it will raise $14.5 million capital to help meet demand for its industrial and residential batteries.
The ASX-listed firm, led by serial internet entrepreneur and Internode founder Simon Hackett, will place $10.5 million of shares at 10 cents each. Redflow shares are currently trading at 16 cents. Another $4 million will be raised from Hackett’s own investment vehicle Hackett CP Nominees Pty Ltd.
While Redflow has a residential battery named ZCell that is a competitor to Tesla’s Powerwall range, Hackett said the business needs the extra money to take advantage of a market opportunity from industrial clients.
“We have identified that the telecommunications sector has a strong, proven and ongoing demand for energy storage that fits the ‘sweet spot’ of Redflow’s unique value proposition,” said the executive chairman.
“In May, Redflow recorded its largest sale to date, to an energy systems integrator working in the telecommunications and network power sector.”
The new cash will also assist company’s previously revealed plans to move its manufacturing to south-east Asia and take other measures to reduce the cost of production.
“The activities Redflow is undertaking to transition manufacturing and to implement key product cost-down projects are critical to the future success of the company,” said Redflow chief operating officer Richard Aird.
Hackett said that the company would continue to produce residential batteries.
“Redflow will continue supplying into its ZCell residential battery sales channel, which is delivering our compelling energy storage solution for residential and SOHO customers, especially those located in off-grid areas or warm climates.”
The first tranche of share placements is expected on July 20, while the second tranche is due to complete on August 30.
Redflow was established in 2005 and listed on the ASX in December 2010.
Hackett was a part of the university cohort that founded AARNet, the first implementation of the internet in Australia, then founded broadband provider Internode. He sold the South Australian business to iiNet in 2011 for $105 million.
He was also formerly on the board of the NBN before joining Redflow in 2014, and is currently placed number 45 on the Business Insider Tech 100.