Australian wave pool company Surf Lakes, buoyed by a flood of interest from leisure resort operators around the world, is laying plans for a potential ASX listing as early as next year.
The Gold Coast-based company, which is backed by surfing greats Mark Occhilupo and Barton Lynch as brand ambassadors, is currently undertaking a private placement to raise $7 million which is nearing subscription.
The company has hinted at an IPO for some time, and although it has yet to be announced, CEO and co-founder Aaron Trevis says this could occur towards the end of next year.
The current private placement will be applied to ongoing research and development of the Surf Lakes technology and to scale up activities for the proposed Surf Lakes park in Yeppoon on Queensland's Capricorn Coast.
Yeppoon is the location of the company's testing facility and it is among a number of commercial locations proposed as part of a planned global rollout of the concept, with the US emerging as a prime market. Surf Lakes could be operating at Yeppoon within 12 to 18 months, pending local council approvals.
"We are in detailed commercial design at the moment," says Trevis.
Surf Lakes operates what it calls a five-waves technology that creates concentric waves from a central point that the company says provides more frequent and larger waves than conventional wave pool systems. The system deploys a central plunger to create multiple waves at once with the most recent tests measuring waves of up to 4.48 metres.
"We've grown increasingly confident in the technology now, and this has been backed by the fact that many people are committing to multiple projects with us," says Trevis.
Surf Lakes' progress over the past year has garnered interest from leisure and tourism operators around the world with the company securing agreements that could see its innovative wave pools initially built in San Diego, Las Vegas, Dallas, Nashville and Tampa in the US.
"We have signed an MOU (with one party) for six projects, starting in Florida and five other areas over eight years," says Trevis.
"We also have someone who has signed on in Hawaii who wants to do four projects over five years. The US is our biggest market, although Europe is looking really strong as well."
In June, Surf Lakes also announced an agreement with China Waves Sports to expand into multiple locations in China.
Founded in 2016, and after enlisting Occhilupo as surf industry advisor a year later, Surf Lakes has captured the imagination of the surfing community. Now that the technology is nearing commercial reality, Trevis says a broader investor market is emerging for the company.
"We have gone from the surf-focused entrepreneur who wants to take this to the public to now resort developers recognising that, if they can build this, they can make a fortune around the perimeter.
"That's really our big sell (as a concept) because we can take any paddock and turn it into a surfing paradise. It's like taking a mini Gold Coast or Sunshine Coast and build it wherever you want."
Surf Lakes is looking at pursuing multiple revenue streams as part of its business plan, including design and installation, royalties from licensees and joint-venture partnerships giving the company equity interest in key projects.
"We're currently developing all the operations training and systems. Not only is the surf park concept relatively new, ours is unique again. For our brand protection, we don't want to leave that for a resort developer to figure out."
Australia already has an artificial surf pool in URBNSURF at Tullamarine in Melbourne which employs the Spain-developed Wavegarden technology. URBNSURF is also planning a park for Sydney.
Trevis is keen for the competition to succeed, notably because it creates market awareness.
"We want to cheer them on to become successful because that can only reinforce the entire market," he says.
"Our technology comes in with four times the number of waves and variety, along with a range of other benefits, so it means that our case looks even stronger."
Surf Lakes is looking at both Sydney and the Gold Coast as prime markets to locate its wave parks in Australia.
"People think the Gold Coast has plenty of waves. While there are plenty of crowds out when the waves are good, there are many days when the waves are not so good. Also, you can't surf at night and each time a shark beetles into Snapper, people get nervous. Shark attacks have warned off even some hardened surfers."
Over the past year, the pandemic has also bolstered the business case for Surf Lakes.
"We took the view when COVID hit that it's probably the greatest economic crisis of our generation, therefore it was also the greatest opportunity of our generation," says Trevis.
Not only does it offer stimulus opportunities for regional economies globally, he says it also marries with the rising demand for lifestyle pursuits in a post-COVID world.
"Surfing is one of the few things you can do outdoors without having to travel. I think there's a hunger out there for people who want to enjoy life more, so there is a layering of opportunity that puts us in the right place at the right time."
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