One of the turnaround small caps of 2020 is set to grow further with millennial marketing company Crowd Media (ASX: CM8) raising $1.5m to accelerate business growth in Europe via an oversubscribed Placement.
Originally seeking to raise just $1.2m as per their Term Sheet, the Company elected to accept the additional subscriptions with funds raised to scale up operations, bolster sales and strengthen its balance sheet. This comes at a time when online retails sales have been booming through COVID-19 and positions Crowd Media well to capitalise on the trend through their extensive influencer marketing network.
The funding comes after a strong few months of corporate activity where Crowd Media has partnered with KINN Living and VITAL Innovations via exclusive marketing service contracts to market and sell their consumer products across Europe, taking a clip of sales along the way.
“Since outlining our vision for Crowd at the November 2019 AGM, our mission has been to sell exemplary products that are integral to the lives of our millennial audience,” said Crowd Media Chairman, Steven Schapera.
“At the time we were largely focussed on beauty/haircare/skincare products, however with the unfortunate arrival of COVID-19 it is now fair to say that home-care, hygiene, and health products have never been more integral to the lives of our customers than they are now.”
Further, Schapera’s Board identified volatile capital markets as a future risk for Crowd Media hence the opportunity to bring new investors to the growing business while strengthening the Company’s balance sheet led to the Placement with shares offered at $0.025 each and represented a 19.5% discount on the 10-day VWAP.
“The offer was significantly over-subscribed, enabling us to curate the prospects and choose only those who we felt would best align with the company’s interests,”
“After two years of substantial losses, underlying EBITDA is now positive and steadily improving. We have streamlined every single aspect of the business and evolved into a lithe, lean, and nimble business run by entrepreneurs, not corporate managers.”
Since being appointed Chairman of Crowd Media in September 2019, Schapera has overseen the Board and management team which has launched three new consumer brands across Europe – I Am Kamu, London Labs and KINN Living – and resulted in Crowd Media turning around a $4.7m operating loss in FY19 to positive underlying EBITDA for January through to June.
Schapera is best known as the founder of cosmetics brand BECCA which he exited in 2016 via the $300m sale to Estee Lauder. Since the commencement of their marketing for KINN Living’s hygiene products, sales have exceeded expectations with Crowd to soon roll out VITAL’s SuperSafe brand which include COVID-19 testing and protection that have been widely adopted in the UK by police, hospitals, schools and offices.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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