Last-mile delivery start-up Locate Technologies says it will stash cash in excess of its working capital in Bitcoin.
Key Takeaways
- Locate Technologies, an ASX-listed last-mile delivery start-up founded in 2014 to improve the delivery experience for customers, has raised $1.45 million.
- The company says it will allocate cash in excess of its working capital requirement to Bitcoin.
- Its intention is to build a long-term strategic holding of the cryptocurrency, which it says could support future acquisitions and growth initiatives as it expands globally.
Key background
ASX-listed last-mile delivery start-up Locate Technologies, which launched in 2014 with a view to improve the customer experience around delivery, has taken a bold stance on bitcoin: it says it will allocate all cash exceeding its working capital towards the cryptocurrency, in the hopes that it will support future growth.
The company’s co-founder and CEO, Steve Orenstein, told an investor briefing that Bitcoin, which recently hit an all-time high of US$109,000 (though has since dropped to about US$105,000 at the time of writing), could capture value for shareholders.
“Those that have been following Bitcoin over a number of years have seen how it has grown substantially in value,” Orenstein said. “My expectation is that that will continue. And so, I think there will be more businesses looking to hold Bitcoin on their balance sheets… I think we are the first in Australia as a company that’s listed on the ASX to be putting Bitcoin on our balance sheet.”
In a statement to the ASX, the company acknowledged some of its shareholders may be cautious about its new Bitcoin policy, but Orenstein says it’s about education: “We’ve all grown up knowing about fiat currency… And so, it takes time and the ability to have an open mind to learn about these different concepts.”
Orenstein says its cryptocurrency holdings could help the company make future acquisitions – but doesn’t plan to sell down its stake to do so. The goal is for Bitcoin to strengthen the company’s balance sheet, to raise equity at higher prices, and issue shares to make acquisitions.
Big number
$1.45 million. That’s how much the capital the company raised, which is set to go towards new growth initiatives within the business, like product development.
Crucial quote
“By adding Bitcoin to our balance sheet, a lot of risk has been taken out over the last few months, with a lot of governments around the world, particularly the US, adopting Bitcoin as a strategic reserve.”
Tangent
Trump Media and Technology Group, the parent company of US President Donald Trump’s social media company Truth Social, is raising US$2.5 billion in a bid to build a corporate bitcoin reserve, also making cryptocurrency a core part of its balance sheet.
It comes as the White House announced plans to create a national strategic bitcoin reserve back in March.
“We view Bitcoin as an apex instrument of financial freedom, and now Trump Media will hold cryptocurrency as a crucial part of our assets,” Trump Media CEO Devin Nunes said in a statement announcing the sale. “Our first acquisition of a crown jewel asset, this investment will help defend our Company against harassment and discrimination by financial institutions.”
