Successful Placing to raise £45 million

RNS Number : 4178W

Boku Inc

14 November 2017

 

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This announcement is an advertisement and not an admission document or a prospectus. It does not constitute or form part of, and should not be construed as, an offer to sell or issue, or a solicitation of any offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information in the admission document (the "Admission Document") to be published by Boku, Inc. (the "Company") in due course in connection with the proposed admission of the common shares of $0.0001 each in the capital of the Company (the "Common Shares") to trading on AIM, a market operated by London Stock Exchange plc (the "London Stock Exchange"). Copies of the Admission Document will, following publication, be available during normal business hours on any day (except Saturdays, Sundays and public holidays) from the registered office of the Company and on the Company's website.

14 November 2017

Boku Inc

("Boku" or the "Company" and, together with its subsidiaries, the "Group")

Successful Placing to raise £45 million

Trading starts 20 November 2017 on AIM

Boku Inc, the world's leading independent direct carrier billing company, is pleased to announce the successful pricing of its initial public offering (the "IPO") and the placing (the "Placing") of 75,271,186 million Common Shares ("Shares") to raise £45 million. Trading on the AIM Market of the London Stock Exchange will commence on 20 November 2017 ("Admission").

Highlights

·     The Placing raised £45 million and consisted of (i) a placing of 25,423,728 million new Shares, to raise gross proceeds of £15 million for the Company; and (ii) the placing of 50,847,458 million existing Shares, to raise gross proceeds of £30 million for selling shareholders, all at a placing price of 59 pence per Share ("Placing Price").

·     The Company's market capitalisation on Admission, based on the Placing Price, is expected to be c.£125 million.

·     The Placing, which was significantly oversubscribed, saw strong demand from a wide range of institutional investors.

·     The £15 million proceeds, before expenses, from the issue of new Shares will be used by the Company for working capital purposes and investment in growth opportunities, including new product development.

·     It is expected that dealings will commence on AIM at 8.00am on 20 November 2017. The Shares will trade under the TIDM "BOKU" and the ISIN number is: USU7744C1063.

Jon Prideaux, CEO of Boku Inc, commented:

"I am delighted to announce that our initial public offering has been such a success.  We very much look forward to joining AIM on 20 November and would like to take this opportunity to thank existing shareholders for their support and welcome our new shareholders to the Company.

"Admission to AIM strongly positions the Company as we continue our growth plans, particularly enabling us to invest in new product development for the long-term benefit of the business and our customers."

Enquiries:

Boku Inc Jon Prideaux, Chief Executive Officer Stuart Neal, Chief Financial Officer	[phone]
Peel Hunt LLP (Nominated Adviser and Broker) Edward Knight / Nick Prowting (Corporate) Rory James-Duff / Sohail Akbar (Syndicate)	[phone]
IFC Advisory Limited (Financial PR & IR) Tim Metcalfe / Graham Herring / Miles Nolan	[phone]

Background to the Company

Incorporated in 2008, Boku is the leading independent direct carrier billing company in the world. Boku's technology enables mobile phone users, of which there are more than five billion worldwide, to buy goods and services and charge them to their mobile phone bill or pre-pay balance.

Boku's platform connects its customers, including Apple, Google, Facebook, Microsoft, Spotify and Sony, with billing, identity and sales systems of mobile network operators. The Group's technology makes a consumer's mobile phone number a convenient and secure payment method, providing an alternative to credit and debit cards. By using Boku, merchants take people with mobile phones and make them paying users.

Boku's merchants need to acquire and retain new users on mobile devices. Their objective is not only to acquire the maximum numbers of users, but also to navigate as many of them as possible through a 'conversion funnel' from single/ first use to loyal paying customers. Boku connects merchants to mobile network operators from around the globe with a simple interface that accesses various carrier capabilities:

·	Billing Systems: no other payment method reaches more people than carrier billing. According to the World Bank, there are 98 mobile subscriptions per 100 people on the planet and only 62% of adults have bank accounts;
·	Authentication Systems: with Boku, a single mobile number can be used to authenticate a consumer's identity, broadcast an array of customer communications, and provide a source of funds for future purchases or subscription payments; and
·	Sales Channels: by giving merchants the opportunity to have their services optionally added to mobile plans across mobile operators around the world, Boku seeks to create a potentially vast customer acquisition channel. Carriers also have access to demographic, location and behavioural data that can be used to refine and optimise the customer acquisition and retention process.

The Company's key strengths include:

·	Scale: With 148 employees, including 87 engineers and technical specialists, Boku can support the needs of even the most demanding customers. Boku has a network of local offices in key locations that can help merchants who do not wish to deal with carriers directly, get the commercial arrangements and technical connections that they need in order to take advantage of carrier billing.
·	Experienced Management Team: Boku has an experienced management team, with expertise in web, mobile and financial services. They have held executive roles for Amazon, AT&T, Visa, Bank of America, Barclays and Intuit.
·	Platform: Boku has invested in its systems and platform to ensure a high performance, high resilience, high capacity system operating in a dual-centre mode, with bank grade connections and billing functionality. Boku has achieved global scale, optimised its unit costs and thus has the capability to roll out enterprise merchants.
·	Market Leader: the Directors believe that Boku generates higher revenue than any other independent carrier billing company.
·	Intellectual Property: The Group has a healthy IP portfolio with 73 patents granted and 52 pending.

Board of Directors

Mark Britto (Non-Executive Chairman)

With over 20 years as an entrepreneur, sales and financial services executive, Mark Britto is currently the Senior Vice President and General Manager for Global Credit at PayPal. He also serves as Boku's Non-Executive Chairman. Mark founded Boku after six years as the Chief Executive Officer of Ingenio, a service marketplace and performance advertising company, which he led a 2007 acquisition by AT&T. Prior to Ingenio, Mark spent 4 years as Senior Vice President of worldwide services and sales at Amazon.com. Mark's first start up, Accept.com, was bought by Amazon.com in 1999 and served as the primary backbone of Amazon's global payments platform. Mark began his career in senior credit and risk management roles at leading national banks FirstUSA and Bank of America.

Jonathan (Jon) Prideaux (Chief Executive Officer)

Jon has more than 25 years of payments experience. He was an early Visa Europe employee and key contributor to its growth, leaving in 2006 as Executive Vice President of Marketing. He started Visa Europe's ecommerce division, was the lead executive on the introduction of Chip and PIN technology and oversaw product launches such as Visa Electron and V PAY. He served on the Board of EMVCo, was the Chairman of the Compliance Committee and a member of Visa's Global Product and Brand Councils. Since leaving Visa in 2006, Jon served as Deputy Chief Executive Officer for SecureTrading, where he doubled transaction numbers and quadrupled profitability. He then led a management buy in at Shopcreator, the e-commerce software platform.

Dr Richard Hargreaves, Independent Non-Executive Director

Richard co-founded Endeavour Ventures in 2006 and has been investing in and advising companies for over 30 years. He began his career at 3i plc where he spent ten years before starting Baronsmead and launched one of the first VCTs - Baronsmead VCT. He sold this to Friends Ivory & Sime plc in 1995 (it later became ISIS Equity Partners). Richard was Managing Director of their unquoted investment business which at the time had £180 million funds under management. Richard is a former chairman of the British Venture Capital and Private Equity Association (BVCA). He has significant experience as a non-executive director on both public and private company boards. He is a graduate of the University of Cambridge and has an MSc and PhD from Imperial College, London. Richard is the Chairman of Boku's Remuneration Committee.

Clint Smith, Non-Executive Director

Clint Smith is currently the Senior Vice President of Corporate Development and General Counsel for DataStax, Inc., a California-based technology company. Mr. Smith has previously held management positons with UUNET, Macromedia, MySQL and TrialPay. He has served on the board of directors of Yub, Inc., an e-commerce company acquired in 2014 by Quotient and TrialPay, Inc., a payments company acquired in 2015 by Visa. Mr. Smith is currently Chairman of the Audit Committee and has agreed to serve until April 2018, when Mr. Butcher is expected to be appointed Audit Committee Chair.

Keith Butcher (Non-Executive Director)

Keith was most recently Chief Financial Officer at Blancco Technology Group. Over the course of his career, Mr. Butcher has held Chief Financial Officer roles at several high-growth technology and e-commerce companies, including PaySafe Group, Flomerics and DataCash Group. In each of these roles, he played an instrumental role in streamlining costs, improving investor relations and guiding the companies through successful mergers and acquisitions. During his tenure as Chief Financial Officer at PaySafe Group, formerly known as Optimal Payments, Mr. Butcher guided the company through three significant acquisitions that helped transform the company in to a £2 billion business. This included the company's successful acquisition of Skrill in 2015 for €1.1 billion, which propelled PaySafe Group into the FTSE 250. Mr. Butcher will chair Boku's Audit Committee.

Stuart Neal (Chief Financial Officer)

Prior to re-joining Boku in 2017, Stuart was advising new technology ventures, bringing to market cutting edge technology in AI Machine Learning, Crypto Currency and Blockchain. Previously, he was Chief Commercial Officer at Vocalink Zapp (acquired by Mastercard), building distribution channels and creating merchant demand for their Pay by Bank App product. Stuart was also Commercial Director at Barclaycard, Europe's second largest card acquirer, where he oversaw the roll out of contactless payments across the UK market. He has held senior Commercial and Finance positions within a number of blue chip corporations including GlaxoSmithKline, Worldcom and Virgin Media. Stuart was previously Chief Financial Officer of Boku between 2012 and 2014.

Financial Highlights

In the nine months to September 2017, the Company saw continued growth across all key metrics; user numbers, TPV and revenue, helping Boku achieve a positive underlying EBITDA* for the month of September.

New users to the Boku platform increased by 10.6 million in the nine months to September 2017, compared with 5.1 million during the same period in 2016; an increase of 110%.

Full year comparisons

The table below set out a summary of the Group's audited financial results for the years ended 31 December 2014, 2015 and 2016.

	Year ended 31 December 2014 $'000	Year ended 31 December 2015 $'000	Year ended 31 December 2016 $'000
TPV	311,247	344,880	554,009
MAUs ('000s) (At period end)	1,019	1,884	3,354
Total Revenue	18,335	19,195	17,193
Gross Profit	14,220	15,174	14,420
Underlying EBITDA*	(9,621)	(11,360)	(12,274)

* Underlying EBITDA excludes share based compensation, exceptional reorganisation costs and costs relating to the IPO

Half year comparisons

The table below set out a summary of the Group's unaudited financial results for the six months ended 30 June 2016 and 2017.

	6 months ended June 2016 $'000	6 months ended June 2017 $'000
TPV	211,423	611,672
MAUs ('000s) (At period end)	2,082	4,741
Total Revenue	8,403	10,207
Gross Profit	7,049	9,195
Underlying EBITDA*	(7,165)	(2,758)

* Underlying EBITDA excludes share based compensation, exceptional reorganisation costs and costs relating to the IPO

 

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