Swedish P2P lending provider TrustBuddy announced a EUR 10m equity raise yesterday evening. Earlier that day, the company announced the acquisitions of Italian and Dutch Peer-to-Peer Companies, Prestiamoci and Geldvoorelkaar.
According to the company the raising of new equity was already oversubscribed at the time of the press release, based on a 20% capital raise mandate. The proceeds of the share placing will be used by EUR 5m to fund the cash consideration (and related costs) of the acquisitions of Prestiamoci and Geldvoorelkaar, EUR 2m for strategic expansion and platform development costs, and EUR 3m for working capital purposes.
The share placing is being undertaken by a book build, closing on Friday the 14th of November, in order to allow for participation by existing and new shareholders. Liberum is to act as Placing agent to the book build, and Erik Penser is acting as certified advisor. Further details of the book build will be announced in due course.
Jens Glasø, CEO of TrustBuddy, commented:
“We are delighted to announce this equity raise. The acquisitions and strategic moves into long term consumer and SME loans that this share placing will fund are exciting steps in achieving TrustBuddy’s long term strategy of being a diversified P2P lending operator. The indications of support for an equity fundraise from investors is sufficient to utilise the Company’s existing share issue authorisation of 20% of the existing shares in issue.”
A 20% equity raise is quite a dilution for existing shareholders. However, it needs to be seen in context with the announced acquisitions which do add not only new regional markets but most importantly to new business areas and licenses. Entering the SME-business and long-term consumer loan business give the TrustBuddy business more stability and contribute to an overall more stable image of the company. So while your % share of the cake has become smaller, you can enjoy that the overall cake has become much much bigger!