Dragontail Systems Limited (ASX: DTS, the “Company” or “Dragontail”), the
technology company revolutionizing the Quick Service Restaurant (QSR) and food service industry, is pleased to release a copy of the Company’s CEO address for the Extraordinary General Meeting (“EGM meeting”) that is being held on May 28th, 2020.
The current funding process, for which the EGM meeting is convened, involves the investment of up to AUD$19.25m from strategic partners, via the issue of convertible preference shares, in two stages (all in accordance to the Company’s Announcement dated 23 March 2020).
The funding is being led by Eldridge Industries (“Eldridge”), and Goudy Park Capital LP (“Goudy”), with the support of the Company’s largest Australia-based shareholder, Alceon Liquid Strategies Pty Ltd (“Alceon”).
The current fundraising will enable the Company to expand its activities and execute on the vast opportunities that presented to Dragontail which we are yet to realize. Among others, the Company will be able to expand into the significant market of the US, where extensive preparations are already under way, establishing the necessary infrastructure for marketing and sales activities. These include the execution of some new projects, penetrating the US market and accelerating cooperations such as with Tele Pizza – a global player with strong presence in Latin America and Iberia.
The funds will also serve the Company to repay its existing corporate loans with Alceon, and Eldridge, and thus be debt free.
Following the tremendous success in the UK, having the Algo Platform nationally installed across Pizza Hut stores in the UK, together with the recent launch of the AI-based QT Make-line Camera, the Company has successfully expanded its operations into more European countries, including Belgium.
The Company has also strengthened its executive backbone with the appointment as a Board member of Mr. Henry Shiner, who brings vast experience over many years of senior management and strategic positions at successful International and Australian-based companies. It is also proposed that Eldridge will nominate US-based Board members, further enriching the Board with their experience in the QSR industry.
Dragontail has reached the significant milestone of 2,500 global installations and has received very positive customers feedback supported by proven strong KPI improvements from using the Company’s technology. We believe this will strongly position the Company to double its install base within 12 months and as a result be closer to a breakeven point.
Since launching its first product, every Dragontail customer who has installed the technology and remained operational has continued as a customer or expander their relationship with the Company. This is demonstrated by those who trailed the last mile solution, using Algo Lite, and eventually opted to upgrade to the full Algo platform, such as FMI, the largest Pizza Hut franchisee in Canada. This enables the Company to increase its average monthly per-store recurring revenue.
While maintaining the position as the leading innovative technology company in the food delivery industry, the Company sees the current round of funding as a stepping stone towards accomplishing its goals, and scaling its installed base globally.
This ASX Announcement was approved and authorised by Dragontail’s Board of Directors.
The event is free and investors can register online to view the presentation here:
The Company invites questions to be submitted to firstname.lastname@example.org prior to the presentation.
Dragontail Systems Limited (ASX: DTS, the “Company” or
“Dragontail”) has entered into a non-binding term sheet with Eldridge Industries (“Eldridge”),
Goudy Park Capital LP (“Goudy”), and Alceon Liquid Strategies Pty Ltd (“Alceon”) (“Term
Sheet”) to raise A$20m via the issue of convertible preference shares (“Preference Shares”).
The key terms of the Term Sheet are summarized in the Annexure.
The funds raised from the issue of Preference Shares will enable Dragontail to accelerate its
entry into the US and other global territories, and to explore significant business opportunities
that are expected to drive customer growth and the deployment of the Company’s flagship
products – the Algo Dispatch Platform and the QT quality control camera system. The funds
will also enable the required growth in operations teams to support the new projects currently
in the Company’s pipeline, as well as additional investment into Artificial Intelligence R&D.
The Company also intends to apply part of the funds to repay in full its existing $4.3m
corporate loan with Alceon.
The Company intends to channel the funds and potential of the supporting investors to
penetrate new markets and develop new avenues for the Company’s development. The funds
will enable the Company, for the first time, to build a dedicated Sales and Marketing
department. To date, all new customers have come from inbound enquiry resulting from
positive word-of-mouth and the inherent strength of the Company’s proprietary technology.
This will allow the Company to pursue its significant existing pipeline of opportunities, as well
as provide the necessary resources to capitalize on the opportunity presented by both the
Total Technology product and food delivery aggregators. To ensure the Company has
sufficient liquidity while the parties work towards satisfying the conditions to the issue of
Preference Shares, it is proposed that Eldridge will provide a short-term bridge loan in the
amount of USD $2 million. The Company and Eldridge are in the process of finalizing the terms
of such bridge loan with a view to funding being made available to the Company in the coming
The Company looks forward to the proposed engagement with the two new US-based
investors, who can bring significant strategic benefits to the Company.
Eldridge, a holding company headquartered in Greenwich, Connecticut, has a track record of
building and growing diversified businesses with a focus on Credit and Credit/Real Estate
Hybrid; Insurance and Insurance Tech; Real Estate; Sports and Media; Convenient Food; and
Technology. Eldridge’s investment expertise, specifically in Convenient Food and Technology,
makes them a strategically important partner in a market that is targeted as a future growth
A further $5.5m will be provided by Goudy Park, a USA based concentrated global micro-cap
fund with very strong USA-based F&B connections.
Mr. Ido Levanon, Dragontail’s Managing Director, added: ” Dragontail was presented with
several funding and key strategic opportunities in the last 6 months and due to the strong
potential in the USA, the proposed fundraising was selected. It gives the Company the strong
financial resources it needs to achieve its significant growth ambitions.” Undoubtedly, the USA
market holds great potential for Dragontail, and we are confident that the strategic partners
in this fundraising will help us achieve this goal. On the current timetable, legal documents for
the Preference Shares are expected to be executed in February 2020, with a shareholder vote
to be held in March and the Company receiving the proceeds shortly thereafter”.
The Company will keep shareholders informed of material developments. Should definitive
legal agreements be executed, shareholders will be provided with additional information
about the proposed issue of Preference Shares and the proposed investors in connection with
the shareholder approval process.
Dragontail Systems Limited (ASX: DTS, the “Company” or “Dragontail”) is pleased to announce that it is going live with the first store to integrate the power of the Algo kitchen delivery and optimization system (the “Algo”) with the functionality to use drivers from leading food delivery aggregator, DoorDash. The launch is taking place at Papa’s Pizza in Galveston Texas, an existing Algo customer. This represents the world’s first full integration between an aggregator platform and a store’s kitchen operation and delivery system. Dragontail expects this functionality to significantly increase customer demand for the Algo and improve revenue per store over time.
This exciting development means Dragontail can now offer its QSR customers who use the Algo the ability to combine their own driver fleets with drivers operated by aggregators to fulfill deliveries. The Algo’s AI algorithm automatically compares and recommends, on the basis of pre-determined business considerations, which is the most accurate and effective alternative. In this way the Algo optimizes customer satisfaction while minimizing labor cost and the total costs of delivery to the restaurant. In addition, stores that only use aggregator drivers will also be able to improve food quality and customer satisfaction by having real-time coordination between the food preparation function and the driver’s arrival.
The launch follows completion of an intensive period of integration work between DoorDash and Dragontail, following the announcement of a strategic alliance in July 2019. DoorDash currently has 340,000 restaurants on their platform in the USA and Canada.
Dragontail is confident that this breakthrough development will open up more opportunities for the Company in the USA, and strengthen its penetration of a market with huge potential, including aggregator platforms.
As part of the Algo’s continued development, QSR customers can also use the unique Driver Sharing module that enables nearby stores to share the same pool of drivers, as a joint workforce, while incorporating aggregator’s drivers as well.
Mr. Ido Levanon, Dragontail’s Managing Director, commented: “This is a very exciting development for the Company, and we expect this first-of-a-kind solution to be a game changer for every delivery restaurant, by combining DoorDash’s extensive operations with Dragontail’s full restaurant AI-based optimization system. The combination will result in the most efficient use of drivers and restaurant staff with the ultimate beneficiary, the end customer, receiving their food faster and always hot and fresh. With this integration, Dragontail has recognized a market need – optimization of the delivery function for restaurants and aggregators – and rapidly developed a unique product to meet this need”.
Dragontail Systems Limited (ASX: DTS, the “Company” or “Dragontail”) is pleased to provide an update regarding the very significant increase in the number of transactions processed through its technology during this Holiday season.
Total orders processed by the Algo Platform and the QT quality control camera in December 2019 were over 6.5m, which represents a more than 10-fold increase compared to December 2018. Total food items processed were over 11.5m, which is more than 13.5 times the number processed in December 2018.
This major volume increase and smooth operation in the five different continents during the busiest period of the year was thanks to Dragontail’s solid, state-of-the-art, cloud-based technology.
Mr. Ido Levanon, Dragontail’s Managing Director, said: “We are very pleased with our ability to provide our two flagship systems tailored to the needs and requests of our customers. It is very satisfying to witness the immediate benefits of our technology on customer satisfaction and store operation. Our ability to scale up so much in one year is an indication for what it is to come next. Dragontail as of today is the only technology company in the world that possesses every key data point inside and outside the restaurant, enabling us and our customers to find more ways to streamline their operations and improve customer experience. We are looking forward to another year of continued growth within multiple markets in Asia, Australia and Europe and our newly targeted market – the USA”.
Dragontail Systems Limited (ASX: DTS, the
“Company” or “Dragontail”) is pleased to announce that Pizza Pan Group Pty Ltd, the
Australian master franchisee for Pizza Hut (owned by YUM! Brands – the world’s
largest QSR company), has decided to expedite the nationwide rollout of the Algo
Platform. The Algo Platform will be rolled out into 250 Pizza Hut stores across Australia
and be completed it by the end of Q2 2020.
Following the success of the first installed stores, the improvement in performance and
customer’s satisfaction, the Pizza Hut Board of Directors has decided to accelerate the
deployment of the Algo Platform in Pizza Hut stores across Australia, allocating all the
resources needed to complete the 250 stores’ installation as planned.
Pizza Hut Australia and Dragontail are aiming to present the market with innovative,
state of the art modules, using unique technologies that will contain new functions and
Mr. Wayne McMahon, Chief Information Officer at Pizza Hut Australia, commented:
“I believe that implementing superior technology is a top priority for our business.
Cutting-edge technology, such as Dragontail’s, will be a key enabler in propelling Pizza
Hut Australia into the next phase of sustained business growth”.
Mr. Phil Reed, Pizza Hut Australia CEO added: “In recent months, we have been
closely witnessing how the technology improves store operations and, as a result,
customer experience. We believe that accelerating the implementation process will
lead to tremendous improvement and great impact throughout our stores and among
Dragontail Systems Limited (ASX: DTS, the “Company” or “Dragontail”) is pleased to announce that it has gone live with its Algo Platform in the first Pizza Hut stores in the UK over the last two weeks, with the intention to complete a nationwide rollout early next year.
The Algo platform is an optimization algorithm that streamlines, enhances and manages the entire restaurant order and delivery process, designed to improve operational efficiency, reduce costs, increase revenue, enhance management control and deliver a significant ROI.
The roll out of Dragontail’s Algo platform in Pizza Hut stores in the UK is the first nationwide rollout in a large European country.
The Pizza Hut UK rollout represents another customer aiming for a nationwide deployment, following Singapore, Canada and Australia.
Following this contract win, the number of contracted stores has increased to 3,814, up from 2,191 in Q4/18.