Tech stocks raise $20m

27/07/2016 - 14:13

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Three local tech companies have tapped investors to raise a combined $20.1 million, with the funds to be put towards shoring up their balance sheets and further developing their products.

Tech stocks raise $20m
Department 13 chief executive Jonathan Hunter (right) with non-executive director Gavin Rezos. Photo: Attila Csaszar

Three local tech companies have tapped investors to raise a combined $20.1 million, with the funds to be put towards shoring up their balance sheets and further developing their products.

Cyber security company iWebGate has raised $8 million through the placement of about 177.7 million shares at 4.5 cents each.

The funds raised will be used to progress commercialisation of the company’s existing reseller agreements with Telstra and Blue Tech Consulting, while also extinguishing an $11.4 million convertible note agreement with US-based Lind Partners.

iWebGate also announced a reshuffling of its management team, with chairman James Tsiolis stepping into the role of interim chief executive, while current CEO and co-founder Tim Gooch will move to a new role as director innovation business and development, to oversee commercial development.

Robert Hayden has joined the management team as chief operating officer, looking after sales and operation activities.

“The incoming management of iWebGate have initiated a complete review of the current business and report that substantial cost savings have been identified and implemented,” the company said in a statement.

“Management will continue to look and take costs out of the business where possible, enabling the company to focus on customer growth and accelerating near term revenue generation.”

The raising was lead managed by Peloton Capital.

Screening and verification services company CVCheck has withdrawn a previously announced share purchase plan, and instead undertaken a $5.6 million capital raising.

CVCheck raised $4 million through a placement priced at 13 cents a share, and also plans to undertake a $1.6 million rights issue at the same price.

In a statement, the company said while the funds raised would be used to pursue growth prospects, they would also be necessary to deliver positive cash flow in the December 2017 quarter.

“This is based on assumptions of more modest revenue growth than experienced in FY16 and the reduction in expenses and marketing spend,” CVCheck said.

CVCheck also announced it had met its revenue guidance for FY16, with $7.1 million generated.

The company is targeting up to $13 million in revenue for FY17.

Chairman Christopher Brown said the rights issue reflected the company’s commitment to providing existing shareholders with the opportunity to participate on the same terms as incoming investors.

Acting chief executive Rod Sherwood said the company now had the financial flexibility to achieve strong revenue growth in Australia and New Zealand, and expected to become cash flow positive in less than 18 months.

Shaw & Partners acted as lead manager to the placement and underwriter for the rights issue, while EM Advisory acted as corporate adviser.

Meanwhile, software communications company Department 13 International has received firm commitments for a $6.5 million capital raising, by way of the placement of 52 million shares at 12.5 cents each.

The funds raised will be put towards commercial development of D13’s Mesmer counter drone technology, which is expected to be delivered by the end of the year.

Chief executive Jonathan Hunter said the company has received strong demand for the Mesmer software-based systems, which safely control wayward drones.

“These additional funds will also speed up the delivery and beta testing of version two of Mesmer, which will have a machine learning algorithm to enable even faster determination and mitigation of drone threats,” he said.

The raising was led by Viaticus Capital.

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