Palisade Impact leads capital raise for Australian next-gen infra network

Palisade Investment Partners’ impact investing platform aims to address digital inequity with its A$20.5m cornerstone investment in GigaComm.

Sydney-based asset manager Palisade Investment Partners’ specialist impact investing platform, Palisade Impact, has led a A$20.5 million ($14.2 million; €13.4 million) funding round for Australian next-generation telecommunications infrastructure company GigaComm.

Investing alongside Melbourne-based Endeavour Asset Management and existing shareholders including AustralianSuper director Jim Craig, Palisade Impact committed the majority share of the capital raise, according to the the firm’s co-founder and chief executive, Steve Gross.

Formed in 2018, GigaComm is building a network that can deliver broadband speeds of up to 1GB per second – more than 10 times the average download speed in Australia – through more affordable plans for consumers. The independent network has so far reached 100,000 premises in the metropolitan areas of Melbourne and Sydney.

“The key challenge we have in Australia with all infrastructure is that it’s a large country geographically with a relatively small population,” Gross told Infrastructure Investor. “[As a result], in general terms, there’s more infrastructure being created that’s more modular and distributed.

“[GigaComm] is a business that very much plays into that thesis, which is modular, distributed infrastructure that allows a much more cost-effective delivery of the infrastructure service to more Australians. That, for us, is the key thesis – we’re seeing that play out in much of the infrastructure industry and telecommunications infrastructure is no different.

“This allows us to not only deliver a broad service but also to provide a specific service to low socio-economic households and address digital equity.”

GigaComm co-founder and chief executive Sophearom En told Infrastructure Investor that the digital infrastructure nature of the business, with its high barriers to entry, combined with the hybrid nature of GigaComm’s network (the company deploys fibre, as well as fixed wireless technology mmWave and copper-based technology GFast) means it can deliver compelling unit cost economics.

“That’s a powerful business model because we don’t have as much of a sunk cost as you would expect in rolling out traditional networks,” En said. “That means we can be profitable at much lower customer penetration levels than you would expect for traditional fibre-to-the-home network rollouts, but we can provide the same level of reliability and gigabit speeds as fibre.”

The capital raise will fund the next stage of the company’s expansion as it looks to broaden its coverage in the suburbs of Melbourne and Sydney, and expand into the Brisbane and Canberra markets. The company also has ambitions to move into regional areas, En added.