Nektan secures future with £7.1m funding
Mobile gaming platform provider says investment will help fund US expansion and European growth after H1 warnings over need for new funds
Nektan has secured a new £7.1m financing package to help fund expansion in the US and support its growing European business, just over a month after the firm warned of a need for fresh investment following a maiden H1 loss.
The mobile gaming platform provider posted a £2.4m H1 2015 loss in March and said it would need to raise additional capital in order to avoid a “refocus of investment” that could affect its long-term prospects.
The firm said the new financing package will underpin its expansion in the US, where it has 18 signed contracts and/or letters of intent to provide its platform to licensed casino operators. The firm said it had also signed 14 new white-label partners in Europe in the past 90 days.
The firm, which recently floated on London’s AIM market, has signed white-label deals for its mobile casino platform with London-based business newspaper City A.M, Channel 4, and Kerching Casino in recent months.
And Nektan CEO David Gosen said the funding was “a clear endorsement” of the firm’s strategy and that the last six months had seen an “acceleration in demand” for its mobile gaming platform, highlighting its recent deal with UK newspaper The Sun.
“The support from existing and new investors in this financing is a clear endorsement of our focused strategy and will now allow Nektan to capitalise on our early market entry in the US and build on the European momentum with the continuing conversion of a strong partner pipeline,” Gosen said.
The funding round was led by a number of existing and new institutional and private investors and consisted of £4.7m of convertible loan notes, 1,044,744 placing shares, and the intended drawdown of £0.6m from an existing £1.2m loan from Disruptive Tech Limited (DLT).
As part of the funding round a number of Nektan directors have taken part in the equity placing, with Gosen and chief financial officer David Sparks being awarded 14,925 placing shares each. DLT also subscribed to 358,208 placing shares in lieu of repayment of the initial £0.6m loan facility.
Nektan’s share price was up 2.5% to 171.72p after early morning trading.