Tern plc (LON:TERN) investee Wyld Networks (STO:WYLD) Chief Executive Officer Alastair Williamson caught up with DirectorsTalk to discuss the agreement with Lacuna Space, the difference between hardware orders & data orders, the SEK 7.3 million raised in a private placing and being on target for launching the network in December.
Q1: Alastair, you recently signed an agreement with Lacuna Space, a LEO satellite operator to provide additional satellite coverage. Could you provide more details on that news for us?
A1: It’s a fantastic piece for news for Wyld Networks. We signed an agreement with Lacuna Space, they’re a UK-based satellite operator, they have five Low Earth Orbiting operational satellites and they also have the Medium Earth Orbiting satellite.
So, the rationale behind it was really to expand our constellation of Low Earth Orbiting satellites, as you know we have an agreement with Eutelsat and now we’ve brought Lacuna into the partnership to ensure we’ve got enough coverage so we can launch our network this year.
So, yes, fantastic news for us and really addresses some of the challenges that we were facing early on this year.
Q2: We also saw some good news recently on new orders for the data services. Could you just explain a bit more the difference between the hardware orders you’ve been receiving this year and now the data orders that you’ve recently received?
A2: Firstly, we’re really excited to start to get some data orders coming into the company.
Just to take you back a bit to explain the difference between a hardware and our data orders so early this year, we launched the Wyld Connect which is our IoT module piece of hardware that gets embedded into sensors that transmits data from sensors to the satellite. That’s a one-off hardware fee and we’ve had orders for about 92,000 so far and that’s basically enabling third-party sensor manufacturers to deliver data to the satellites.
Now, we’ve started to collect orders for data itself and what’s really important about this is that the data actually represents the monthly recurring revenue so as I said, we sold about 92,000 IoT modules and we’ll be getting revenues of up to $5 per month per unit of Wyld Connect that we’ve actually sold. So, we’re pretty excited now to start to see the data purchase orders coming in.
Q3: The company closed a placement of approximately SEK 7.3 million last week which in today’s market conditions is great news. Could you just take us through the rationale of the raise and we also notice that Tern, your largest shareholder, didn’t participate, was there a reason behind them not participating?
A3: I’ll answer that in two parts and address the raise first and then the Tern part secondly.
So, we raised SEK 7.3 million in a private placement last week which was really good news for us and if I can take you through the ‘use of proceeds’ on that raise which will explain the rationale of why we did it.
We are really looking to expand and extend our sales capability. So, at the moment, we’ve signed up to over 40 launch partners and we’ve got purchase orders from some of those launch partners. We really wanted to put some more sales resource into the organisation to convert a lot more of those launch partners into purchase orders and moving forward, sign up more launch partners as we actually launch the network.
I think also, as part of the commercial aspect, is that now we’ve got two satellite operators, Eutelsat and Lacuna, the technology is very very similar that we’ve had to adapt some of our hardware capabilities to suit the Lacuna Low Earth Orbiting satellites. It also means that we need to add additional resource into support our customers and that’s the key to success here is to ensuring we’ve got enough support capability on the ground and that’s resource, that’s people to actually support our customers as we launch the network.
The second part of the rationale was really to keep ahead of the market so we’re investing more money into our development organisation to ensure that we stay ahead of the competition and that’s really key in the business that we’re launching at the moment.
To the second part of your question which related to Tern, our largest shareholder, and your question was why didn’t they participate in the round. Well, they weren’t allowed to.
We’re listed on the Nasdaq First North, we’ve got a rulebook to follow and there’s a good market practice policy in place and that prohibits significant shareholders and large shareholders from participating in private placements. So, in effect, Tern were prohibited from participating in the round.
Q4: Finally, you’ve talked a lot about launching a service in December this year, what are the challenges that you face and do you think Wyld Networks is on target to achieve this?
A4: Absolutely so we’ve addressed all of the challenges over the last 2-3 months. We’ve signed up Lacuna so we’ve got additional coverage, additional Low Earth Orbiting satellites in the sky so that enabled us to be able to ensure that we could deliver a services that’s applicable to the customers that we’ve actually got on board.
So, in respect of the challenges, they’re overcome, and in respect to launching the network, we will launch the network in December.