Balex Marine raises $1.2m to fuel expansion

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  • December 2, 2015

By Calida Smylie – NBR – National Business Review (paid access to website)

Tauranga-based Balex Marine has wrapped up a $1.2 million capital raising round to help further its domestic and international growth.

The designers of a self-powered, remote-controlled boat-launching device successfully closed its second fundraising round on $1.2 million.

Balex Marine's Paul Yarrall and Paul Symes.

Balex Marine’s Paul Yarrall and Paul Symes

 

The company raised $700,000 in a first capital round earlier this year, and many investors stayed for the second round, including members of the Bay of Plenty’s Enterprise Angels, whose sidecar fund EA 1 made a follow-on investment of $50,000.

The government’s Seed Capital Investment Fund invested $175,000 this round, which is in the top quarter for follow-on investment size for the New Zealand Investment Fund’s portfolio.

Callaghan Innovation plugged a $240,000 grant into the business earlier this year.

Enterprise Angels member Alan Bougen, who invested in the second round, has been appointed to the board, due to his marketing experience. He is also the co-founder and deputy chairman of NZX-listed honey health product company Comvita.

Richard Shirtcliffe, the chief executive of Tuatara Breweries and the former head of global marketing at baby buggy company phil&teds, has been appointed board adviser because of his exporting experience.

Balex Marine chairman Daryl French tells NBR both new appointees are experienced in taking start-up companies through the growth cycle – which will help if it looks at an IPO as part of a future exit strategy – and in setting up successful international distribution networks.

Daryl French

Daryl French

One hundred of the company’s automatic boat launchers – which eliminate the need for manual winching and wet feet – have just come off the production line, with half pre-sold, and will reach dealers this month.

The first production model is aimed at alloy and fibreglass hulled boats in the five to nine metre range weighing up to 2500kg.

The company has signed partnership installer agreements with several companies including DMW Trailers, Voyager Trailers, and the Boating & Outdoors national marine retail chain.

What the funds will be used for
Mr French, who also sits on the Enterprise Angels board, says a substantial amount of the capital raised will go towards gearing up its manufacturing facility. Currently parts are brought in from around the world and assembled in Tauranga.

The rest of the capital will go towards marketing and offshore distribution, since Balex aims to launch in Australia and the US next year.

Balex expects to break even in early 2017 and is forecasting revenue of $30 million in 2021. Mr French says the board has remained conservative on forecasts and market penetration.

“Our current sales revenue forecasts are only for a small percentage of the market and we have no competition. We’ll get a much better feel for revenue and profit when we move into Australia, and the board will be reviewing the break even point in the first part of next year to see if it can be brought forward.”

Balex assesses its global market at about 17.4 million boats, since the total global recreational boat park is estimated at $29 billion, with 60% of the market in five to nine metre boats.

The product was designed by Lex Bacon in his Tauranga garage, following a suggestion from his wife that an automatic boat loader would save marriages. He set up Balex in late 2013 along with Paul Symes, now its chief executive.

Mr Symes and his wife have the majority shareholding of about 40% of the company, while interests associated with Enterprise Angels hold about 20%. The government’s NZVIF owns about 11%.