Audioboom confirms plan to raise £5m through additional share placing

Mark Johnson's picture
by Mark Johnson

London-based podcast platform Audioboom has confirmed plans to raise £5m via a new placing of shares on the London Stock Exchange.

The company, dubbed the Youtube for voice content, said the money raised would be used mainly to sign up new talent and content to the fast growing service.

Audioboom made the statement in response to recent online commentary regarding a proposed equity fundraising by the Company. 

“The Company confirms that, in order to support and continue the strong revenue growth recognised by Audioboom in Q4 2018 and Q1 2019 and to capitalise on the opportunities available to it in the growing podcast market, it is currently working on completing a placing and subscription of new ordinary shares in the Company at a price of 2.5 pence per ordinary share to raise up to approximately £5 million of new capital”, the firm said in a stock market statement.  

Financial incentives for talent

The proposed fundraising will enable the company to offer, where appropriate, competitive financial incentives for leading podcast talent to join Audioboom's platform. These incentives could, in certain circumstances, include fully recoupable up front advance payments.

In addition to the proposed fundraising, Audioboom said it is also exploring potential non-equity means to support the acquisition of new podcast talent, involving a third party guarantee facility. 

Such a facility would enable it to arrange for minimum revenue guarantees to be provided to leading content partners without significantly affecting the group's cash position.

“There can be no certainty that the fundraising or the guarantee arrangements referred to above will be concluded nor as to the timing, terms, pricing or size thereof”, the statement read. 

“However the Board welcomes the indications of support for the fundraise at the proposed price that have been recently received from existing and new investors who recognise the podcast market's dynamics and Audioboom's growth potential."

Billionaire property tycoon, Nick Candy, is a major investor in the podcast company and has regularly contributed funds to support it.

Earlier this month, Audioboom reported record quarterly revenue of $4.6million, up 180 per cent on Q1 2018 which was $1.6 million. 

Audioboom’s shares were trading 10.3 per cent lower following the statement on Friday morning.

Disclosure: Mark Johnson is a shareholder in Audioboom.

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