The Airtasker Ltd (ASX: ART) share price is going to be on watch today as it comes back to trading from its capital raising.
Airtasker’s capital raising
The tech tasking business announced that it has successfully completed its $20.7 million fully underwritten share placement to institutional, sophisticated and professional investors at $1 per share, issuing 20.7 million shares.
That issue price represented a 7.4% discount to Airtasker’s last closing share price of $1.08.
How big of a capital raising is this for Airtasker? It’s fairly sizeable as it represents just under 5% of its pre-offer issued shares.
What is the money going to be used for?
Proceeds from this share placement will be used to fund the acquisition of the assets of Zaarly Inc, a US-based local services market place, expansion into key city markets in the US and the UK, as well as the costs of the offer.
Airtasker said that the placement was strongly supported by existing and new domestic institutional, sophisticated and professional investors.
Summary thoughts on the Airtasker share price
The US and the UK are huge markets that could be very strong candidates for growth over the coming years. Australia is a good country to operate in, but its population is small compared to those two other countries.
Airtasker can really benefit from network effects. The tasking platform has already been developed and now it just needs more volume. New clients and taskers are very profitable for the business. In the IPO it revealed that in FY20 its gross profit margin was 93%. It’s also expecting its operating cash flow margin to be 4% in FY21, compared to -11% in FY20 and -136% in FY19. Positive cashflow is a good step and should help further growth of the Airtasker share price.
That gross profit margin is one of the highest on the ASX. And growth is going better than expected. When announcing this capital raising, Airtasker said that its prospectus guidance was 405,000 unique paying customers – it had 333,000 in the year to date to March 2021. It guided an average annual purchase frequency of 1.9x, Airtasker said it’s on track for this. The average task price in the prospectus was $189, in the year to date to March 2021 it was $194.
Airtasker also increased its FY21 gross merchandise volume (GMV) forecast from $143.7 million, up to a range of $148 million to $152 million. The revenue prospectus forecast was $24.5 million, which was upgraded to a range of $25.5 million to $26 million. The company also said that its gross margin was ahead of forecast.
It’s hard to know how much the Airtasker share price should be worth because it could go on to do amazing things, or it may not kick on (or be slowed by competition). But it’s definitely one to watch.
