What: Earlier in the week, shares in the world's largest crowdsourcing site by total users and projects posted, Freelancer Ltd (ASX: FLN), entered a trading halt pending a capital raising.
In an announcement to the ASX today, Freelancer said it has successfully raised $10 million through the issue of ordinary shares, at $1.40 each, to local and global institutions.
In addition, Freelancer CEO and founder, Matt Barrie; and the original venture capitalist investor, Simon Clausen, have also sold $12 million and $23 million of shares, respectively, to investors.
So what: The combined placement will raise $35 million for the technology company to: "take advantage of near term growth opportunities including, but not limited to, potential bolt-on acquisitions and acceleration of organic growth, and for general corporate purposes," the company said.
The above statement potentially clears up concerns of shareholders, since the company appeared well funded (with $31 million cash) prior to the announcement of the capital raising.
And while a sell-down by founders usually raises the eyebrows of investors, it's important to remind ourselves that both Mr Barrie and Mr Clausen continue to hold 34% and 42% of the company, respectively. Moreover, the free float (i.e. those shares available in the stockmarket) will increase to 23%.
Quoting directly from the ASX announcement:
"Freelancer.com founder and CEO Matt Barrie said, "I am thrilled that Freelancer is continuing to attract high quality institutions to its share register. As we continue to rapidly grow the Company, it is important that all shareholders benefit from increased market liquidity and a broadened share register. I remain absolutely committed to Freelancer as Chief Executive and a shareholder, but recognise the need to sell a small proportion of my shares to increase the company's free float and trading liquidity.""
Now what: Freelancer isn't the only crowdsourcing company disrupting the global freelancing and contractor employment markets. However, it is starting to show promise and all but certainly deserves a spot on long-term investors' watchlists – along with fellow ASX-listed and unprofitable tech stock, XERO FPO NZ (ASX: XRO). Xero is a cloud accounting specialist looking to sell its software in the Australia, New Zealand, US and UK markets.
Technology companies are bringing BIG opportunities for Australian investors…
