ASX-listed pet care platform Mad Paws (ASX: MPA) has today emerged from a trading halt to announce a $4 million growth capital raise, with funds to support the integration of its brands into a single platform.
Of the growth capital, $3 million is the result of an institutional placement backed by binding commitments form investors, and boosted by a $1 million share purchase plan (SPP).
Investors in the placement acquired shares for 13 cents per share, and will support the company’s ambitions to maintain its ‘market leading position’.
In addition to integrating its multiple brands into a single platform, Mad Paws says the growth capital will accelerate veterinary care site Pet Chemist’s growth, and enable the company to grow its marketing channels and support infrastructure as it scales towards profitability.
Funds from the placement will take Mad Paws’ cash position from $3.3 million at 31 December 2022 to $6 million.
“We have exited December 2022 on a $30 million operating revenue run rate growing 75 per cent year on year on a pro-forma basis, but we see significant upside potential ahead of us by implementing the four strategies this capital raise will enable,” Mad Paws co-founder and CEO Justus Hammer said.
“We are also very pleased with the support from both existing and new investors for the placement and encourage all eligible shareholders to take up the SPP offer once available.”
The co-founder added that the pet sector was becoming ‘increasingly more active’, but that Mad Paws was committed to maintaining its market leading position in the space - pointing to the company’s most recent quarterly results as evidence of the group’s strength.
“As we reported in our recent December quarterly, our marketplace and e-commerce business verticals are all continuing to grow rapidly from a revenue and customer acquisition perspective, which is giving us scale and improved margins,” he said.
“We also remain on track to be EBITDA positive in mid calendar year 2023.”
Of the raise’s backers, existing shareholders turned out to support the tranche, including cornerstone investor Bombora Special Investments Growth Fund which committed $500,000 to the placement.
Mad Paws - co-founded by Alexis Soulopoulos who is set to present at Business News Australia’s E2E Summit next week - said it would issue 23.1 million new fully paid ordinary shares post-placement. At 13 cents each, this represents an 18.75 per cent discount to the last close price on Tuesday.
The SPP will see the company raise $1 million also at 13 cents per share, with eligible shareholders entitled to acquire up to $30,000 of new shares.
Reflecting the discount of the placement and SPP, shares in MPA have fallen by 12.50 per cent to $0.14 per share at 11.52am AEDT.
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