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Property rental platform Rent.com.au, which is backed by Brisbane technology entrepreneur Bevan Slattery, is raising $1.95 million through a renounceable rights issue to capitalise on growing demand for its services.
Slattery, the company’s largest shareholder, has agreed to priority sub-underwrite $650,000 of the capital raising which is pitched at 1.7c a share.
The company’s directors and management have entered into general sub-underwriting agreements for about $583,000.
The announcement of the entitlement issue has given an immediate boost to Rent.com.au’s shares which rose 10 per cent to 2.2c by lunchtime trading.
The proceeds of the capital raising will be used primarily for sales and marketing of RentPay, an app that offers fleixible payment options for tenants.
The Perth-headquartered Rent.com.au says the the capital will further the commercialisation of RentPay, as it capitalises on ‘strong recent growth and improving awareness’.
"We've had a couple of strong quarters of RentPay customer growth following expansion of our sales and marketing efforts earlier in the year,” says Rent.com.au CEO Greg Bader.
“We've recently scaled back our consumer marketing, concentrating primarily on social media to support customer acquisition while focussing on our B2B (agent) sales activity which contributed around half of all sales in the September 2023 quarter.
“The funds raised via the entitlements issue will enable us to capitalise on the strong pipeline of sales opportunities before us and maintain our product leadership in terms of features and functionality."
The entitlements issue will be a non-renounceable, pro-rata offer on the basis of one new share for every 4.5 shares held at the record date for the offer of up to 114,482,080 new fully paid ordinary shares for 1.7c each.
Shareholders will also receive a free attaching option expiring on 31 December 2025 for every two shares subscribed for, with an exercise price of 4c a share.
Bader notes the importance of the underwriting support by Slattery, the founder of Superloop (ASX: SLC), Megaport (ASX: MP1) and NEXTDC (ASX: NXT), and company directors for the entitlement offer.
"This strong level of support from the board and management reflects the excellent position we find ourselves in, with regards to being able to accelerate RentPay growth further by capitalising on our strong sales opportunities,” he says.
“The entitlements issue will provide us the capital capability to do so through maintaining our leadership in the product space and increasing our capability on the sales side via consumer, agent and partnership channels."
Rent.com.au revealed last month that RentPay had reached a milestone of $150 million of payments through the platform since its relaunch, with growth running at 200 per cent year on year.
Rent.com.au posted an underlying EBITDA loss of $2.5 million in FY23 following an 18 per cent fall in revenue to $2.8 million.
The company reported $80 million in rent paid through the RentPay platform during the year.
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