Touch Ventures Reports $24.9M Loss, Invests $15M in Tixel and Reshop

A Challenging Year Marked by Strategic Reset

Touch Ventures Limited (ASX: TVL), an Australian investment company focused on high-growth technology assets, reported a net loss after tax of $24.9 million for the year ended 31 December 2024. This represents a 61% increase in losses compared to the $15.4 million loss recorded in 2023. The deterioration was primarily driven by significant impairments in its legacy portfolio, notably in Sendle and Postpay.

The company’s net tangible asset (NTA) backing per share declined to $0.12 from $0.15 at the end of 2023, reflecting the impact of these write-downs and subdued capital market conditions. Despite the financial headwinds, Touch Ventures remains debt-free with a strong cash position of $44.1 million, down from $58.2 million the prior year.

Gannet Capital’s Entry Signals New Direction

A pivotal development during 2024 was the entry of Gannet Capital as Touch Ventures’ largest investor, acquiring a 19.09% stake. Glenn Poswell, founder of Gannet Capital, joined the board, bringing extensive investment management expertise. The partnership has already influenced the company’s strategic direction, with a focus on cost reduction, leadership renewal, and portfolio optimisation.

Chairman Michael Jefferies highlighted that the collaboration with Gannet Capital has been instrumental in resetting the company’s cost base and enhancing its ability to source high-quality deal flow. This marks a clear shift from managing legacy assets to actively pursuing new growth opportunities.

New Investments in Tixel and Reshop

In a demonstration of this strategic pivot, Touch Ventures made two notable investments late in 2024. The company invested $4.5 million in Tixel, a Melbourne-based live entertainment ticket resale platform recognised for innovation. Additionally, it committed US$6.6 million (A$10.6 million) to Reshop, a US retail technology firm focused on instant customer refunds, led by former Afterpay executives including newly appointed CEO Anthony Eisen.

These investments underscore Touch Ventures’ intent to back scalable, technology-driven businesses with strong growth potential, moving beyond its legacy holdings that have been challenged by high interest rates and capital market volatility.

Legacy Portfolio Pressures and Valuation Adjustments

The company’s legacy portfolio faced continued headwinds, with Sendle’s valuation written down by $14.6 million following a financing round that introduced preferred equity senior to Touch Ventures’ stake. Postpay was fully impaired to nil, resulting in a $10.9 million loss. Refundid also saw a $1.6 million write-down after a capital raise via a SAFE agreement.

These impairments reflect the challenging environment for technology investments amid persistent high interest rates and subdued capital markets, which have pressured valuations and liquidity.

Governance and Leadership Changes

Touch Ventures undertook significant governance changes, including leadership team replacements and board refreshment. The company’s remuneration framework remains aligned with shareholder interests, with no short-term incentives paid in 2024 and a focus on long-term value creation through equity-based incentives.

The board continues to be chaired by Michael Jefferies, with key directors including Jim Davis, Sophie Karzis, and Glenn Poswell. The company also appointed Hall Chadwick as auditors, replacing KPMG.

Outlook and Market Position

Looking ahead, Touch Ventures is well-capitalised and positioned to pursue new investment opportunities in high-growth sectors. While the near-term financial performance remains dependent on the recovery and realisation of value from its portfolio companies, the strategic partnership with Gannet Capital and recent investments signal a renewed growth trajectory.

The company has not declared any dividends and maintains a cautious stance given ongoing market uncertainties. Investors will be watching closely how the new investments perform and whether the company can successfully navigate the transition from legacy asset management to active portfolio growth.