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GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 1 of 30
Swiftly Dominating Last Mile; Initiate with a Buy
Company Description
GetSwift (or “the Company”) is an ASX listed global technology company with a Software as a Service (SaaS) delivery logistics platform. GetSwift provides an easy and affordable way for businesses of all sizes and industries to optimise dispatch, routing, visibility and tracking of their deliveries to the client’s end receiving customers.
Executive Summary
• E-Commerce Growth, Evolving Consumer Expectations and Greater Enterprise Awareness of Last-Mile Delivery are Driving Need for SaaS-based Solutions – With E-commerce sales projected to grow to 17% of all US retail sales by 2022, customers are beginning to view once-novel technologies like driver tracking and automatic dispatching as benchmark features for businesses’ digital sales offerings. Businesses are also quickly recognising the need for a unique brand experience that can compete with digital leaders like Amazon and Domino’s. SaaS-based logistics businesses are well-positioned to capitalise on these themes.
• GetSwift Provides a Seamless, Reliable, and Cost-Effective Solution- Although businesses may be able to develop proprietary software that performs most of the functions of GetSwift, it is more economically efficient to work with existing SaaS providers, who are better equipped to recoup costs of development and maintenance by distributing their solutions to a wide range of customers. Amongst the logistics SaaS providers, GetSwift offers both the lowest enterprise transaction for SME and Enterprise. The largest competitors in the space can charge up to $1.25 for SME transactions and 72c for enterprise transactions. Further, GetSwift has received strong recommendations from its customers for being an easy to implement and reliable solution. The key point is given the algorithm is self-learning and the onboarding/API integration can take months, as a customer uses GetSwift for longer, the switching cost becomes higher. It becomes an entrenched product.
• Management are Well Credentialed and Have Demonstrated Early Success with Enterprise Wins- GetSwift has the most executive experience of any management team in its peer group, and they have leveraged this advantage into early success, securing partners like Commonwealth Bank and NA Williams less than one year after completing their IPO. In contrast, competitors like Bringg and Onfleet have been around longer with more modest contracts.
Financial Highlights
12-month rating Buy
12m price target/
% upside
A$7.33
~200%
Price A$2.41
Trading data and key metrics
52-wk range A$0.24-$3.18
Market cap. A$534.60m
Shares o/s 212.99m
Free float 63.37%
Avg. daily
volume
981,996
Avg. daily value
(m)
A$2.65
Net cash (m) A$26.4
52W Share Price
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 2 of 30
• Moreover, N.A. Williams Should be the First of Many Enterprise Wins- NA Williams is possibly the watershed moment for GetSwift and the last-mile logistics SaaS market. If GetSwift is able to demonstrate its effectiveness for large businesses at the scale of NA Williams, the opportunities to expand into other verticals should be plentiful. Some of the major industries that could realistically work with GetSwift include fast food restaurants, beverage companies, third party logistics providers, big box retailers, and major delivery providers. Securing even a handful of the leaders in those industries could grow GetSwift’s revenue by hundreds of millions of dollars and properly establish them as the dominant global last mile logistics solution.
• Aesir Channel Checks Suggest GetSwift is Outpacing its Competitors- In a competitive landscape that centres on customer satisfaction, GetSwift has garnered the most praise from businesses. Whilst other businesses have lost customers to GetSwift over the last year, GetSwift has managed to avoid losing its own clients to competitors. Enterprises have praised GetSwift for the management’s responsiveness and the software’s reliability and have often come to these conclusions after performing their own due diligence on the options available on the market.
• M&A is Picking-Up in the Sector Which Could Represent Another Opportunity- Some of this year’s notable mergers and acquisitions in the space include Verizon’s $2.6 billion purchase of a fleet management SaaS solution, Fleetmatics and Walmart’s acquisition of New York-based last-mile delivery business, Parcel. Amidst the wave of e-commerce purchases by competitors like Amazon, Walmart, and Target, the logistics SaaS market GetSwift operates in will be fertile ground for future acquisitions.
• Aesir Initiates with a Price Target of A$7.33 which Represents a 50/50 blend of our Comparables (EV/Sales) and Discounted Cash Flow Methodologies for ~200% Upside- With the current pipeline ramp-up and the NA Williams deal fully deployed, GetSwift should be on track to do ~A$200m revenue comfortably in CY2020. GetSwift’s peer universe is richly valued for markedly less growth than GetSwift offers, albeit the companies are significantly more mature in their life cycle. Given GSW’s superior growth profile and margin structure, it is fair to assume that it could trade at ~10x EV/Sales based on 2019 sales projections which would equate to $2.06 billion enterprise value ($1.982 billion market cap), resulting in a $9.31/share fair value for the common equity in 2018. To sense-check that number, we used a discount cash flow model with Aesir NOPAT projections to 2022, a terminal growth of 5% and tax rate of 30%. To reflect the high level of execution risk, we opted for a 20% discount rate which results in an NPV/share of $5.34. As a thought exercise, Aesir elected to reverse engineer the share price to see what the implied discount rate the market was assigning to the Company’s projected cash flows. Under our assumptions, a 40% discount rate equates to a A$2.40 share price. This suggests that the market is still in ‘wait and see’ mode with regards to whether the management can fully execute on their current contracted deals and more interestingly, the market is attaching zero value to GSW’s deal pipeline, including the one other ‘embargo deal’ that management references in its presentation materials. This represents a substantial opportunity.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 3 of 30
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 4 of 30
1. Industry Overview
Logistics has always been a chaotic, fragmented, and unorganised function of business
operations, but with the rise of on-demand delivery companies and online retailers, a new
industry has emerged for SaaS products that can give businesses the tools necessary to succeed
in e-commerce.
Key Growth Drivers for Last Mile Technology:
• E-Commerce Market Share Growth
• Increasing Consumer Expectations for Transparency
• Greater Enterprise Awareness of Logistics Solutions
1.1 E-Commerce Growth
The E-commerce industry has grown by 20 – 30% each year since 2010, and each year businesses
are devoting more resources to shoring up their online presence. With the market expected to
grow to 17% of all US retail sales by 2022 (Source: Forrester Research), traditional brick-and-
mortar retail leaders are keen to recapture e-commerce sales from Amazon, which already
accounts for 43% of all online sales in the US. Some examples of the rapid growth in e-commerce
include:
• Between May 2016 and May 2017, Walmart increased their online product offering from
10 million to 50 million items, with 16 million items added in the final quarter alone.
• Macy’s, a large traditional retailer, has experienced increasingly disappointing sales
whilst falling behind in the race for e-commerce. In August 2016, the retailer announced
the closure of 68 stores across the US, representing 10% of their existing stores. Other
department stores and big box retailers are facing similar woes, exacerbated by declining
foot traffic in shopping malls.
• A survey conducted by Deloitte this year revealed that the average consumer is, for the
first time, planning to spend more dollars at online stores than physical ones during the
holiday period.
Businesses are looking for solutions like GetSwift that can give them an edge in digital sales and
the logistics of last-mile delivery.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 5 of 30
1.2 Evolving Consumer Expectations
Over the last five years, consumers have become desensitized to the use of tracking technology
in existing markets. Some prime examples of shifting consumer expectations include:
• While regular taxis have had call services for many years, the arrival of Uber transformed
on-demand taxis from a luxury and emergency service to the default method of finding a
taxi.
• Food delivery is also not new, but consumers have become much more willing to stay
home and order from their favourite restaurants using a centralised app that provides
estimated delivery times, driver tracking, and food status updates.
• Domino’s is still pushing novel technologies like drones, delivery robots, and self-driving
cars. In time, these features could become as commonplace as driver tracking and online-
integrated order fulfilment.
GetSwift is in a position to provide traditional brick-and-mortar businesses with the tools they
need to meet these new consumer expectations.
1.3 Greater Enterprise Awareness
Logistics management and last-mile delivery solutions are now front of mind for all enterprise C-
Suites, which will catalyze technology adoption and drive growth for this industry. Although the
core pieces of ‘track and trace’ technology are similar, small nuances in customer experience,
reliability, and scale will determine who wins the larger deals:
• Retail businesses realise that creating a unique brand experience, as achieved by
Domino’s, is the ultimate goal in integrating e-commerce solutions into their business
models. Restaurant owners don’t want to provide mediocre services – they want
customers to find the ordering experience painless and efficient enough to warrant
coming back.
• Outside the e-commerce applications of last-mile logistics, the phenomenal operational
success of UPS, with all its strict driver efficiency protocols and management, has drawn
attention to the value of cutting unnecessary expenses incurred during internal
transportation and wholesale distribution. On top of providing drivers with optimised
routes, upper management can use tracking technologies to better account for internal
delays and adapt their daily operations effectively.
GetSwift is set to benefit from the wave of enterprises that will eventually want to be assured that
their logistics are being managed as well as possible.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 6 of 30
1.4 Growth of Amazon and UberEats
Amazon has managed to capture market share from brick-and-mortar retailers across a wide
range of industries, and this has put pressure on businesses to compete more seriously on the
digital front or risk falling behind. As seen in the figures below, Amazon has dominated the e-
commerce market in the US, which has itself grown rapidly every year since 2001. Food delivery
startups such as UberEats and Deliveroo are also moving physical restaurant sales to online
platforms; ‘ghost kitchens’ that have no walk-in address are quickly becoming a reality. It is this
mounting pressure for existing businesses to compete with online middlemen that makes
GetSwift’s technology imperative.
Figure 1: Amazon’s Gaining Market Share as its Growth Outpaces the Overall E-Commerce Market (Sources:
Company Reports, U.S. Census Bureau, eMarketer, Needham & Company, Aesir Capital)
Figure 2: Share of Total US Spending on Cyber Monday 2015 (Source: Slice Intelligence, Aesir Capital)
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GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 7 of 30
2. Company Overview
GetSwift (ASX:GSW) is a technology company with a B2B, smart-logistics, ‘track and trace’
software. The SaaS-based technology includes seamless order acceptance and dispatching,
automatic and efficient order routing and fully visible and GPS-enabled driver tracking and
delivery verification. By its own admission it looks to enable companies to ‘dispatch like Uber,
track like Dominos, and set routes like Fedex’, with application to almost any market vertical that
utilises a delivery model.
Figure 3: GetSwift App Experience (Source: GetSwift Investor Deck 2016)
GetSwift was created in 2015 when founder Joel Macdonald needed a better logistics
management tool for his start-up alcohol delivery service, Liquorun. Orders were being
dispatched and managed by a Philippines call centre as Joel’s truck drivers manually decided their
own timetables, delivery sequence, and routes. His customers were provided with large time
windows for deliveries, which proved to be inaccurate and imprecise. Hearing him recount his
frustrations conjures up memories of waiting patiently from 12 to 5pm for the cable technician
to show up, only for the technician to show up at 5:30.
Joel wanted a tool that could dispatch jobs effectively, track his drivers, and optimise delivery
routes while providing the customer with more transparency in the delivery process. At that
same time, he joined forces with Bane Hunter and decided to hire engineers and create a
proprietary piece of technology that formed the backbone of what is today known as GetSwift.
Realising its scalability, Macdonald commercialised it and within 12 months had signed an
implementation deal with grocery delivery service Instacart, a company valued at $2 billion.
Figure 4: GetSwift Key Features (Source: GetSwift Investor Deck 2016)
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 8 of 30
2.1 Current Position
GetSwift now operates in 70 industry verticals within 600 cities and 70 countries. The platform
is growing at an exponential rate; it has aggregated 3 million deliveries and is delivering 375,000
items per month. Crucially, the platform has significant enterprise level support. It has partnered
with blue-chip brands including JustEat, Pizza Hut, Phillip Morris, takeaway.com and the
Commonwealth Bank of Australia. In September 2017 GetSwift signed an agreement with North
America’s leading representative automotive group, NA Williams. The deal is expected to deliver
1.15 billion transactions annually once fully implemented, generating $138 million in annual
revenue for GetSwift.
Figure 5: GSW Quarterly Transactions (Source: GetSwift ASX announcements, Aesir Capital)
Figure 6: Geographical distribution of Verticals (Source: GetSwift Investor Deck 2016)
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Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
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Historical Delivery Transactions by Calendar Quarter
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 9 of 30
3. The Value Proposition
Fred Smith, FedEx’s founder and corporate chairman, estimates global e-commerce sales will
reach $2.4 trillion by 2018. Unsurprisingly, brick-and-mortar retailers have begun investing
heavily in logistics infrastructure and technology to compete with the likes of Amazon and Uber.
Many large companies have begun leveraging external logistics management software to provide
a ‘quick fix’ for their organisation. All solutions attempt to offer new entrants and traditional
retailers a competitive grade of technology at a negligible fixed cost per transaction, some better
than others. Most companies are finding this to be superior to creating an in-house proprietary
solution as it allows them to compete in delivery while focusing internal resources on their core
competencies. Notably, GetSwift is providing business outcomes to the partners in its ecosystem
as evidenced by metric improvement across the board and data collaboration that is second to
none.
3.1 GetSwift Improves Customer Economics
Figure 7: GetSwift Value Proposition (Source: Aesir Capital)
Figure 8: Cost Reduction and Revenue Generating Benefits from GetSwift (Source: Aesir Capital)
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 10 of 30
4. Management Background
4.1 Joel MacDonald, CEO
• Former professional AFL player
• Founder of Distributed Logistics and Zwype.com
• Director at US Real Estate Investment Company
4.2 Bane Hunter, Chairman
• Former CEO of The Loop
• Former Senior Executive Director at Conde Nast; CPO, Media/Tech, Viacom
• Executive Experience in US, Europe, and Australia
• Qualified in PMP, SPL, ITIL, and CSM Certifications
4.3 Jamila Gordon, Chief Information Officer
• Former CIO at Qantas and Leighton Holdings
• Former IBM Executive in Charge of AXA Insurance and ABN-AMRO
4.4 Jonathan Ozovek, Head of Program Management and Operations
• Former SVP of Global Program Management Operations at Citigroup
• Former Head of Siemens Project Management Office
4.5 Brett Eagle, Corporate Counsel
• Admitted as Attorney in New York, USA and as Solicitor in NSW, Australia
• Specialist in Mergers and Acquisitions, Corporate Finance, and Multi-Jurisdictional
Transactions
4.6 Stanley Pierre-Louis, Board Advisor
• Senior Vice-President and General Counsel for the Entertainment Software Association
• Former SVP and Associate General Counsel for Intellectual Property at Viacom
• 20 years of experience advising industry-leading media companies
4.7 John Wilson, Board Advisor
• Pioneer of Flexible TV Screens and Electric Vehicles
• Prior experience working with US Defence Advanced Research Projects Agency
• Former Director of the Southern Legislative Conference
4.8 Sig Mosley, Board Advisor
• Managing Partner at Mosley Ventures
• Completed record venture deal of $5.7 Billion (Tradex acquired by Ariba)
• Seasoned Corporate Board Member and Angel Investor
4.9 Nevash Pillay, Board Advisor
• Member of the Telstra Executive Team
• 18-year career within the ICT space and 15 years in a leadership capacity
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 11 of 30
5. The Competitive Landscape
The competitive landscape in the SaaS logistics platform space is littered with firms that have
produced comparable offerings to the GetSwift platform. Only two incumbents, Bringg and
Onfleet, have secured substantial enterprise support in western economies. Both firms offer their
own white-labelled platform and customer app and each can perform route management, auto-
dispatching, and driver tracking. Customer feedback sourced from due diligence calls
differentiate the platforms on their reliability and ease of use. GetSwift and Onfleet tend to
perform better by these metrics.
Bringg is a Tel Aviv-based competitor to GetSwift. It has experienced strong transaction growth
since it was founded in 2013; total sales on the platform grew 300% in Q1 2017. The company
states it is looking to on-board clients with a minimum 1000-person driver fleet and a 120,000
delivery per year schedule. Management and sales personnel are young and bright, with
sophisticated start-up backgrounds but little executive experience. Bringg’s ability to secure
future enterprise clients will rely on the sourcing of managers and board members with more
extensive deal-making experience.
Key Metrics
• Base price $0.60 USD per delivery at a rate of 40,000 deliveries per year.
• Base price $0.20 USD per delivery at a rate of 240,000 deliveries per year
• Additional charge of $0.12 USD per delivery for route optimisation
• Additional charge of $0.057 USD per customer update SMS in Australia
Channel Check Customer Feedback
• ‘An expensive but reliable solution that just works’
• ‘A program good enough that we are not looking to switch.’
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 12 of 30
Onfleet was a pioneer in the on-demand digital logistics space; it has operated since 2012. It holds
a client base in 50 countries and counts Hello Fresh, TopShelf, Doughbies and Lugg as customers.
The firm is run by a Stanford MBA graduate and two software engineers from Stanford and
University of New Brunswick. It too, however, has struggled to sign enterprise-level clients.
Key Metrics
• Base price $0.15 USD per delivery for a package of 3,000 deliveries.
• Base price $0.12 USD per delivery for a package of 40,000 deliveries.
• Additional charge of $0.09 USD per delivery for route optimisation.
• Additional charge of $0.05 USD per customer update SMS in Australia.
Channel Check Customer Feedback
- ‘They were incredibly easy to integrate with and have continued to improve upon the
product based on our feedback’.
- ‘The other big feature we like is the organisation linking and delegation. Many of the retail
partners we work with already use Onfleet for their own delivery management – it’s very
easy to work with this kind of setup and create/monitor tasks assigned to other
organisations’.
- ‘It’s user-friendly, pretty intuitive, and does a good job optimising routes’.
- ‘There are a couple of bugs and limitations but nothing significant comes to mind.’
- ‘We didn’t spend much time considering other solutions before choosing Onfleet because
we’d received a good recommendation from another customer’.
- ‘Overall, Onfleet has been an awesome tool’.
- ‘We like the people, we like the software’.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 13 of 30
Not one firm contacted had swapped from GetSwift to its competitors. However, GetSwift has
been successful on numerous occasions at poaching customers from its competitors. Our channel
checks suggested that the customers that switched to GetSwift did so for its ease of integration,
reliability and user-friendly features.
GetSwift’s Key Enterprise-Level Differentiators
• A competent and well-connected C-suite.
• Superior design, ease of use and reliability of platform
• Credibility and transparency associated with public ASX listing
Key Metrics
• Inclusive blended price of $0.285 USD per delivery for SME customers
• Inclusive blended price of $0.20 USD per delivery for Enterprise customers
• Further cost reductions as deliveries reach larger scale numbers
Channel Check Customer Feedback
• ‘We have found that the analytics and flow are what exactly what we are looking for’.
• ‘Get Swift was extremely easy to work with in getting things customized to work with our
needs, unlike [market competitor] who we spoke with prior to deciding on GetSwift’.
• ‘We were previously using [market competitor] and continually had issues with the
platform freezing or running slowly and had higher costs’.
• ‘The product is very good and very inexpensive. We’ve had no hiccups with the software
and we’ve had an especially great experience with management’.
• ‘GetSwift removed a lot of the paperwork and manual labour-intensive work’
• ‘The system is very stable and we are very confident in it’
• ‘Providing transparency with drivers automatically improved performance; drivers
became aware that they were being measured against one another’.
• ‘The data we received allowed us to see heat maps of where our business was strong and
where it was weak’.
• ‘We realised that building our own software would be more expensive and more time
consuming than partnering with GetSwift and growing together’.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 14 of 30
5.1 A Direct Comparison
Following customer calls, each company was contacted individually and asked to give a pricing
quote for a company in Australia delivering 3000 items per month. The price structure quoted is
presented in figure 9.
Figure 9: Comparative Pricing of Major Competitors (Source: Aesir Capital)
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 15 of 30
5.2 UberEats (and Competitors) vs. GetSwift
While GetSwift’s software has a variety of applications, one notable function is that it allows small
restaurant owners to manage their own online ordering and delivery platforms without paying
the hefty commissions associated with other popular food delivery services.
Below are commission breakdowns from popular offerings as a proportion of total order (note
that Deliveroo has yet to turn a profit).
Figure 10: Restaurant Delivery Platform Pricing (Source: Aesir Capital)
Even at the lowest rate of 10%, restaurants will struggle to breakeven on their online orders. An
average business that makes $200,000 of gross revenue each year from online food orders and
incurs the industry average expenses for labour, food and rent will actually lose $10,000 each
year after paying Deliveroo. Channel checks suggest most businesses either break even or lose
money with these partners but just utilize the service as a marketing exercise and to drive
volume. GetSwift allows these customers to not only save money but also increase their brand
equity (white-labeled tech) and understanding of their customers through the feedback provided.
Gross Online Revenue $200,000
Labor Costs (35%) ($70,000)
Food Costs (35%) ($70,000)
Rent (25%) ($50,000)
Delivery Commission (10%) ($20,000)
Net Profit/(Loss) ($10000)
Figure 11: Hypothetical Restaurant Economics (Source: Aesir Capital)
In contrast, a restaurant that forgoes a listing on these services and sets up their own ordering
portal through GetSwift would be running approximately 8,000 deliveries a year through the
platform ($200k divided by $25 minimum order requirement) which equates to $2,320 in
transaction charges (29c/transaction). The remaining $18,000 saved in the worst case (upwards
of $50-60k in a better case) could be used to contract out drivers.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 16 of 30
6. Prospective Industries and Customers for GetSwift
6.1 Logistics Companies
One of the largest, and potentially most unexpected, customers for GetSwift could be logistics
companies. According to a Wired article, a UPS driver with just 25 packages to deliver can chose
from 15 trillion trillion possible routes. With 55,000 brown trucks (package cars) in the UPS U.S.
fleet alone, the math for determining route optimisation along with coordinating delivery time
for different types of packages being delivered is affectionately referred to in the article as a
‘combinatorial explosion.’ With over 16 million deliveries daily for UPS, over 200 million
addresses mapped by UPS drivers on the ground and money invested into details as little as the
‘maximum number of inches a UPS driver should have to move to select the next package’, it is a
safe bet that top logistics software will be highly sought after by these companies.
FedEx has been fighting a decade-long legal battle over the classification of their drivers as
employees or independent contractors.
• In FedEx’s preferred business structure, all the costs associated with vehicles, uniforms,
technology, insurance, pensions etc would be left to the ‘independent contractors’ that
have purchased FedEx ‘routes’ (delivery zones). Regarding routing software, each
business is free to choose its own provider and is dissociated from the parent company.
The independent contractors in the FedEx network either mostly won’t know about
GetSwift or will not be operating at the scale required for an enterprise contract.
• Recent court rulings across the country have been put this structure on precarious ground
and left FedEx under the serious threat of having to treat their drivers as legal employees.
In fact, change may already be underway as FedEx recently settled a case for $240m. If
drivers are now to be legally treated as a part of the FedEx parent company, they may
want to implement a scalable and effective last mile logistics solution for all of their
drivers to minimise the costs of taking on their entire network as employees.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
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objectivity of this report. Investors should consider this report as only a single factor in making their
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Page 17 of 30
UPS has a reputation for being the best package delivery business in the United States, but has
been known to fall short when it comes to time-sensitivity, with a reported on-time delivery rate
of around 63%. While much of this comes from the nature of handling packages of varying size
and weight, there is significant room for improvement. However, UPS also has some of the most
meticulous protocols amongst the major logistics providers. Some examples include:
• Calculating the cost of every driver driving an extra mile per day to be $30 million.
• Reducing the minutes spent idling by the truck fleet by 100 million using onboard sensors
that turn ignition on and off efficiently.
• Instructing drivers to position the serrated edge of their keys down as they walk back to
their trucks, saving several seconds to start the ignition.
Given the close alignment of GetSwift’s offering and UPS’s management focus on efficiency, a
partnership between the two would be an unsurprising and natural fit.
To date, DHL has not employed a business-wide route optimisation solution. One route
optimisation software that is licensed to some drivers is called Paragon, but offers very little
management and data analysis functionality without hardware and subscription addons.
GetSwift would be an ideal solution in this scenario, providing DHL with an all-in-one package
that is scalable and requires no volume consistency to use.
6.2 Third-Party Logistics Companies
Transport companies also represent a sizable opportunity for GetSwift. While the raw delivery
numbers may not be as high as logistics companies like UPS/Fedex or restaurant companies like
McDonalds, partnering with large multi-modal 3PL companies will validate the integrity and
robustness of the technology while also providing valuable channel partners. The cost savings
that GetSwift could provide these companies amounts to the tens and in some cases hundreds of
millions of dollars which suggests that the revenue opportunity for GSW should still be sizable.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
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objectivity of this report. Investors should consider this report as only a single factor in making their
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Page 18 of 30
As the second-largest global provider of contract logistics, XPO’s services include e-commerce
fulfillment of orders; warehousing and distribution; the handling of returned goods (reverse
logistics); supply chain optimization; and managed transportation.
• XPO plans to roll out its own proprietary last-mile solution in November, but there is
still scope for GetSwift to enter into a partnership, as the company may see the long-
term cost of keeping their system effective and up-to-date to be disproportionate to
the cost of working dedicated logistics SaaS company.
• On top of 11,000 trucks of their own, they employ a network of up to 1 million trucks
brokered through independent carriers that handle 13 million deliveries each year,
which could mean up to $1.3m of incremental revenue for GetSwift.
In contrast to XPO’s efforts to lead the industry on the logistics softwares front, many of their
competitors like CH Robinson have not been as proactive in their strategy. With almost 75% of
CH Robinson’s net revenues driven by trucking activities, it is reasonable to expect that the
benefits of implementing GetSwift could be enormous. The metrics below should provide some
perspective on this.
• CH Robinson generated $513m of net income in 2016, meaning roughly $385m is
attributable directly to trucking activity.
• The company’s cost of goods sold for 2016 was $11b, and a conservative estimate of
fuel costs being 10% of that figure would put the cost of completing deliveries at
around $1.1b.
• If that cost figure is reduced just 5% by GetSwift CH Robinson’s net revenue could
increase by almost 11% ($55m) without any major growth or success.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their
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Page 19 of 30
6.3 Beverage Companies
Figure 12: Market Potential of a Coca-Cola Contract (Source: Aesir Capital)
Regional departments of Coca-Cola have already shown interest in implementing a logistics SaaS
software for their operations for several years now, as evidenced by their contracts with Bringg
in Israel and LogiNext in India. For now, there are two major pathways for GetSwift to land a deal
with Coca-Cola:
• GetSwift has a natural upper hand in securing potential agreements with Coca-Cola’s
Pacific Region operations as they should have the most experience handling logistics
in the local market. In other major regions like Eurasia and North America, GetSwift
will have to compete harder against their global competitors, but should have an edge
due to the wealth of executive experience and corporate connections in the
management team.
• A much more difficult race may emerge to secure an agreement with Coca-Cola’s
Executive Committee, which controls operations across all regions. It is difficult to say
with certainty how likely this is to occur. If GetSwift were to complete an agreement
at this level, they could potentially see all of Coca-Cola’s regional supply chains using
GetSwift, with the exception of the handful already working with Bringg and LogiNext.
As an example of the potential cash flows that could be generated from a Coca-Cola deal, figure
12 calculates a rough estimate of the number of deliveries made by Coca Cola Enterprises each
year, which accounts for 80% of all Coca-Cola North American deliveries. With a fleet of 9500
trucks that make around 30 deliveries per day and 17900 tractors (for wholesale distribution)
that make 2 deliveries per day, Coca Cola Enterprises’ annual delivery volume should be close to
117m, so the implied number of deliveries for Coca-Cola in North America is 146m. Should
GetSwift secure a single contract of this scale (notwithstanding Coca-Cola operating 4 regional
ventures outside North America) their revenue could potentially increase by almost $14m each
year, amounting to nearly 15% of their total revenue from all known agreements in 2018.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
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Page 20 of 30
While Pepsi Beverages Company has been less active in testing new systems and technologies,
the deal environment would likely be similar to that of Coca-Cola. One major difference
attributable to PepsiCo is their interest in employing drones, self-driving technology, and AI to
improve their supply lines.
• Pepsi has also been working to explore reduction in labour costs through order-fulfilment
automation technology and home-grown order management tools that have reduced
direct labour costs by 40 percent whilst increasing trailer loading efficiency by 58
percent.
• Implementing GetSwift’s software into the businesses internal supply chains could
further cut unnecessary costs to the business, such as extra fuel costs and dispatching lag
time.
AB InBev has already been working with researchers at MIT to explore how last-mile solutions
can improve supply lines in regions with high traffic congestion and frequent delay events. If
GetSwift’s software can deliver tangible results to businesses looking to improve efficiency on
these fronts, there could be a huge spike in demand for logistics solutions across the board.
• A metric that highlights this is that while the cost of logistics in the US is roughly 8.5% of
GDP, countries like India and China spend 13 and 18% of their GDP on logistics. If the
figures for just those two countries could be reduced by 1%, their economies would save
almost $23b USD each year on logistics expenses.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
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objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 21 of 30
6.4 Restaurants
While GetSwift and its competitors have been working to secure contracts with many of the well-
known fast food restaurants around the world (Pizza Hut, Johnny Rockets, Red Rooster, etc),
many of the marquee names are still uncommitted.
Figure 13: Market Potential of a McDonald’s Contract (Source: Aesir Capital)
Although McDonalds outsources a large portion of its internal transportation to external logistics
providers, it is still possible to come to an arrangement similar to the existing one with Phillip
Morris and CITO transport, where CITO is instructed to use GetSwift whilst handling Phillip
Morris deliveries. McDonalds stores each receive deliveries roughly 10 times each month. This
figure does not include internal transportation between distribution centres and packaging
plants.
• Additionally, there is a large opportunity in online food delivery for McDonalds retail
stores. McDonalds has nearly 36000 stores worldwide in 119 countries. The average
McDonalds store does US$2.5m in daily revenue with an average ticket price of $5. That
equates to 500,000 transactions per store. Given there are approximately 15,000 stores
in the U.S. alone, that equates to 7.5 billion orders annually.
• If 20% of annual transactions in the U.S. were captured by online delivery, GetSwift would
have an addressable market with McDonalds U.S. alone of 1.5 billion transactions or an
$150m+ annual revenue opportunity.
While somewhat smaller, YumBrands (Taco Bell, KFC and Pizza Hut) along with Dominos
represent comparable opportunities.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
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investment decision. Please refer to disclaimer & disclosure for full text.
Page 22 of 30
6.5 Multi-Purpose Retail
Having already squeezed distribution costs down to 1.7% of sales – lower than even competitors
like Kmart (3.5%) and Sears (5%) – Walmart and its management are notoriously committed to
operating as lean a business as possible despite managing almost 11,000 stores and $32 billion
in inventory each year. As e-commerce captures more and more market share from the brick-
and-mortar retail industry, the company has been proactively exploring their options moving
forward.
• Walmart also recently acquired their own logistics SaaS company, Parcel, to handle the
last-mile within New York for both Walmart.com and recently acquired start-up, Jet.com.
• The size of Walmart’s online catalogue is now over 50 million, having grown nearly 40
million over one year since May 2016. Alongside growing their online offerings, the
company has been working to reach a larger audience – evidenced by their purchase of
online clothing retailer Bonobos for $310 million and the Shoes.com domain name for $9
million.
• Walmart’s e-commerce sales have grown from roughly $10 billion in 2016 up to more
than $16 billion in 2017, with the average order coming in at $50. This implies a
transaction volume of 320 million deliveries each year, notwithstanding the rapid
annual growth driving e-commerce sales.
Target has been very active on the last-mile and same-day delivery technology front, with
numerous partnerships, pilot programs, and acquisitions working towards implementing
effective and customer friendly services:
• Grand Junction Acquisition (August 2017): Most recently, Target acquired a New York
based transportation technology firm to build an infrastructure for home-delivery for
bulky in-store items.
• Instacart Partnership (September 2015): Target partnered with an externally managed
same-day delivery service (that is also partnered with GetSwift) to create a same-day
delivery service just for groceries
• Target Restock (May 2017): To rival Amazon Prime Pantry, Target launched their own
online ordering and delivery service for household items.
Clearly, there is interest in adopting new supply chain technologies to improve the Target
customer experience, and GetSwift could be an ideal candidate to improve that experience by
providing customers of these new services with track and trace functionality that is so sought
after in 2017.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
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objectivity of this report. Investors should consider this report as only a single factor in making their
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Page 23 of 30
7. M&A Activity in the Industry
7.1 BPost Acquires Radial
• Date: October 2017
• Acquisition Profile: In an effort to shore up operations in North America, the Belgian Post
Group (BPost) acquired Radial, formerly known as Ebay Enterprises, from Sterling
Partners. Radial is Amazon’s largest competitor for order fulfillment in the US and
accounts for 20% of all deliveries flowing between North America and the EU.
• Value: $820 million
7.2 Walmart Acquires Parcel
• Date: October 2017
• Acquisition Profile: Walmart acquired Parcel, a Brooklyn, N.Y.-based company that
handles scheduled and same-day delivery services in New York for online retailers. While
Parcel will continue to serve its existing clients, Walmart will also utilize the startup’s
technology and network of delivery employees to ramp up its own same-day delivery
online offerings for both Jet.com and Walmart in New York City.
• Value: less than $10 million
7.3 SmartTrans Acquires Resource Connect
• Date: October 2017
• Acquisition Profile: SmartTrans acquired cloud-based logistics software company
Resource Connect and its patented iCuro cloud logistics management platform. The
acquiring company described Resource Connect’s supply chain offering as "highly
complementary" to SmartTrans’ transport supply chain solutions and field services
operations. Ideally, the joint business will offer clients a comprehensive suite of planning,
management and tracking solutions. The horizontal integration created through the
transaction will promote additional scale by allowing SmartTrans to cross-sell its
offerings to Resource Connects’ customer base and vice-versa.
• Value: $16.6 million
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
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Page 24 of 30
7.4 Target Acquires Grand Junction
• Date: August 2017
• Acquisition Profile: Target acquires San-Francisco based logistics transportation
technology company Grand Junction, whose software manages retailers' local deliveries.
The company was already working with Target on a same-day delivery pilot at the
retailer's smaller-format store in New York, and will be useful in Target’s future
endeavours to implement same day delivery.
• Value: Undisclosed
7.5 Walmart Acquires Jet.com
• Date: August 2016
• Acquisition Profile: Jet is among the fastest growing e-commerce companies in the U.S,
with more than 400,000 new shoppers added monthly and an average of 25,000 daily
processed orders. The start-up boasts best-in-class technology that rewards customers in
real time with savings on items that are bought and shipped together, reducing supply-
chain and logistics costs often buried in the price of goods. Walmart was initially criticized
for this acquisition, but Jet.com has proved its value over the last year by continuing to
grow as well as can be expected.
• Value: $3 billion
7.6 Verizon Acquires Fleetmatics
• Date: November 2016
• Acquisition Profile: After acquiring Yahoo a week earlier, Verizon completed a deal to
acquire Fleetmatics, a Dublin-based logistics and fleet management SaaS provider. With
the steady decline in their core phone services business, evidenced by their non-existent
revenue growth from FY16 to FY17 and negative growth from FY15 to FY16, Verizon has
been looking to invest in new revenue streams, and has been willing to pay premiums of
up to 40% for their acquisitions.
• Value: $2.4 billion
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
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Page 25 of 30
8. Growth Risks
8.1 Delays in the Agreement Pipeline
While we anticipate GetSwift to continue securing major agreements and generating revenue as
expected, their performance could falter if there are unexpected delays to the current timelines.
8.2 Rapid Customer Onboarding May Lead to a Capacity Overload
While GetSwift expects to continue growing rapidly in the foreseeable future, onboarding too
many major customers without expanding staff and resources could create a bottleneck of
demand for the product and lead to unsatisfied clients.
8.3 A Competitor May Develop Ground-Breaking Technology
Our recommendation is made on the basis that the technologies of GetSwift and their competitors
are all comparable and do not possess exclusive advantages over each other. If a competitor were
to successfully innovate their SaaS product and secure a patent, growth prospects for the
company could be diminished.
8.4 Technology May Become Obsolete
GetSwift’s business model is optimized for vehicles and human drivers. With constant innovation
on the front of robotics and drones, GetSwift’s technology, in its current form, may become
obsolete and a redesigned business model may be required to compete effectively.
8.5 Threat of Security Breach
As with any data-intensive business, GetSwift could be negatively impacted if there is breach or
leak of confidential customer data or proprietary software. Such breaches may result in
reputational harm and regulatory penalties.
8.6 Loss of Customers
GetSwift’s success depends not only on the securing of new agreements, but the retention of old
ones. Abandonment of the SaaS product by existing customers could adversely affect revenue in
the future.
8.7 Geopolitical Compliance May Impede Growth
With GetSwift’s ambitions to service multiple regions, they may face future obstacles in
geopolitical regulatory compliance regimes. This risk should be considered minimal due to the
nature of the product not warranting heavy regulations.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
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objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Please refer to disclaimer & disclosure for full text.
Page 26 of 30
9. Valuation
GetSwift is undoubtedly polarising when it comes to investors agreeing on a fair valuation.
Assuming all performance shares vest (a fair assumption given management has been meeting
their milestones well ahead of schedule), the total diluted share count is 212,986,886. At a share
price of A$2.50, this equates to a market capitalisation of ~US$400m (A$530m).
However, this market cap could prove to be quite modest given the sales projections for GetSwift.
The Company has issued two pieces of revenue guidance that should be considered. In their May
2017 investor presentation, the company said it was targeting 30x transaction growth in next 24
months and 50x transaction growth in 36 months. That equates to over 72 million transactions
per year and over 120 million transactions per year respectively. Assuming 15c/ transaction,
that’s A$18m/year revenue when ramped up. Those projections were made on their then-current
pipeline. Since that guidance GetSwift announced that it has signed an exclusive commercial five-
year agreement with N.A. Williams, the leading representative group for the North American
Automotive Sector. It is estimated that the contract will potentially yield in excess of 1.15 Billion
transactions per year once fully implemented (fulfillment will take 15-19 months due to the
complexity of the channel structure). GetSwift expects this deal alone to increase revenue by
more than US$138 million per year once all channel partners are online or ~A$180m.
With the current pipeline ramp-up and the NA Williams deal fully deployed, GetSwift would be
on track to do ~A$200m revenue comfortably in CY2020. However, as noted in the ‘potential
customers’ section, there are multiple industries that could benefit from GetSwift. These
opportunities represent tens of billions of deliveries per year. GetSwift is a highly logical fit for
many of these organisations, but it will need to invest heavily in growing its headcount and
infrastructure to tackle contracts of that size. Despite the sizeable opportunities, Aesir has
adopted a ‘show me’ approach with our forecasting, only giving GetSwift credit for an N.A.
Williams roll-out and existing pipeline ramp which results in 1.4 billion transactions for CY19 and
A$206m in revenue. These forecasts alone carry significant execution risk and thus will only be
upgraded as management proves they can scale their technology and organisation to
accommodate such high transaction loads.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
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Page 27 of 30
Figure 14: Transaction Opportunity for GetSwift in the Near Term (Source: Aesir Capital)
Figure 15: P&L Snapshot (Source: Aesir Capital)
GetSwift’s peer universe is richly valued for markedly less growth than GetSwift offers, albeit the
companies are significantly more mature in their life cycle. The EV/Sales multiples range from 4-
13x for companies projected to grow at a 3 year CAGR of 24 to 38%. GetSwift could conceivably
grow their revenue from its low base of $1m/year to $200m+/year in the next few years.
Moreover, EBITDA margins for the peers range from 13 to 38% but public projections are that at
1m deliveries per month GetSwift expects gross margins over 90% and EBITDA margins north of
60%. It is difficult to say what GetSwift’s new margin structure should look like in the light of the
massive enterprise deals that they are onboarding but assuming those margins hold, this stock is
at low single digit multiples of EBT, which is comparatively cheap.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
Aesir does and seeks to do business with companies covered in its research reports. As a result,
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Page 28 of 30
Figure 16: Comps Table – Growth Metrics (Source: Aesir Capital)
Figure 17: Comps Table – Valuation Metrics (Source: Aesir Capital)
Given the superior growth profile and margin structure, it is fair to assume that GetSwift could
trade at an ~10x EV/Sales based on 2019 sales projections, which would equate to $2.06 billion
enterprise value ($1.982 billion market cap), resulting in a $9.31/share fair value for the common
equity in 2018. To sense-check that number, we used a discount cash flow model with Aesir
NOPAT projections to 2022, a terminal growth of 5% and tax rate of 30%. To reflect the high level
of execution risk, we opted for a 20% discount rate which results in an NPV/share of $5.34.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
www.aesircapital.com.au This report has been prepared by Aesir Capital Pty Ltd.
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Page 29 of 30
Figure 18: Discounted Cash Flow Analysis (Source: Aesir Capital)
As a thought exercise, Aesir elected to reverse engineer the share price to see what the implied
discount rate the market was assigning to the Company’s projected cash flows. Under our
assumptions, a 40% discount rate equates to a A$2.40 share price. This suggests that the market
is still in ‘wait and see’ mode with regards to whether the management can fully execute on their
current contracted deals and more interestingly, the market is attaching zero value to GSW’s
deal pipeline, including the one other ‘embargo deal’ that management references in its
presentation materials. This represents a substantial opportunity.
Aesir initiates with a price target of A$7.33 which is a 50/50 blend of our comparables (EV/Sales)
and discounted cash flow methodologies for ~200% upside from current price.
GetSwift (ASX: GSW) An Emerging Force in Global Logistics
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Disclaimer & Disclosure
Aesir, its directors, employees and associates declare that they deal in securities as part of their securities business and consequently may have a relevant interest in the securities recommended herein (if any). This may include providing equity capital market services to their issuing company, holding a position in the securities, acting as principal or agent, or making a market therein and as such may effect transactions not consistent with the recommendation (if any) in this report. Aesir declares that it may have acted as an underwriter, arranger, co-arranger or advisor in equity capital raisings, and will have received a fee for its services, for any company mentioned within this report during the last 12 months and may also do so in the future. The research analyst who prepared this report (“Analyst”), is a shareholder and director of Aesir and, accordingly, will receive a financial benefit from the receipt of fees for Aesir’s services from any company mentioned within this report. The Analyst may also be additionally engaged by any such company in an advisory capacity as a director of Aesir. Aesir declares that, in preparing this report, it may have consulted with any company mentioned in this report, only to the extent necessary to identify relevant publicly available information. You should not act on any recommendation issued by Aesir without first consulting your investment advisor to ascertain whether the recommendation (if any) is appropriate, having regard to your investment objectives, financial situation and particular needs. Nothing in this report shall be construed as a solicitation to buy or sell a security, or to engage in or refrain from engaging in any transaction. Aesir believes that the information and advice contained herein is correct at the time of compilation, however we make no representation or warranty that it is accurate, complete, reliable or up to date, nor do we accept any obligation to correct or update the opinions in it. The opinions expressed are subject to change without notice. Aesir, its directors, employees and associates do not accept any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this material. We cannot guarantee that the integrity of this communication has been maintained, is free from errors, virus interception or interference.