Velpic to finalise AU$5.2m reverse takeover of International Coal

Video e-learning startup Velpic is looking to open offices in Melbourne and Sydney, and will use its backdoor listing to help facilitate expansion plans.

Perth-based video e-learning startup Velpic is looking to expand, and is currently waiting to finalise a reverse takeover by coal mining company International Coal (ICX).

Velpic CEO Russell Francis told ZDNet that to help facilitate growth, the company needed an investment, and the most prevalent way was through a backdoor listing.

"It has been a bit like a dating scenario where, say, 'you look like a good fit for us', we'll date a few times and have a few meetings, and that's worked out well for us. We've found a really good shell and they loved us," he said.

When the deal becomes finalised in late September, the expected total value of the deal will be AU$5.2 million, based on a share price of AU$0.02 per share. But Francis cited that the company will also look to raise up to AU$5 million in investment.

ICX will also change its name to Velpic under the conditions of the takeover.

Russell Francis, CEO Velpic (Image: Supplied)

In the last 12 months, Velpic has seen revenue grow to AU$2 million at a 30 percent growth rate, and has attributed the growth to servicing customers such as Alcoa, AHG, Westrac, and Ausdrill.

Francis believes there's still an opportunity to help organisations -- particularly with the cloud market growing so rapidly -- that are still reliant on older learning management systems.

"We're visual creatures, so instead of putting a lot of text in front of someone and saying read this, go away, and learn it, we say watch this video. It's fantastic for low literacy levels, it's great for when English is a second language, but even for highly educated people it's very impactful. We've found that training through video can take up to less than 70 percent less time than reading a document," he said.

Francis said the funds will help the company open offices in Sydney and Melbourne, as well as increase headcount, which currently stands at 22 employees.

"We're going to stop being Perth's best-kept secret," he said.

To further help facilitate the company's growth, former Xero executive Leanne Graham was recently appointed to the Velpic board.

"When we first talked about going public, the brokers said to come up with your dream list of who you would want to help take you through this, and who you need to put on the board for experience," Francis said. "I did a bit of Googling, and I love what Xero has done ... and Leanne Graham's name popped up at the top, and she was the one who drove the business from here to here."

According to Francis, while the business is currently valued at AU$10 million, the goal is to grow it eventually into a billion-dollar business.

"There are no qualms about it; that's what we're in the business for, and we'll work towards that goal. We also think we have built the team and the product that we have got all the right ingredients ready to go."