Beeks Financial Cloud Group plc (LON:BKS), a cloud computing and connectivity provider for financial markets, today announced its intention to conduct a fundraising to raise gross proceeds of approximately £15 million through a placing to new and existing institutional investors of new ordinary shares of £0.00125 each in the capital of the company.

In conjunction with the New Share Placing, a retail offer of new Ordinary Shares at the Issue Price will be made by the Company via PrimaryBid to provide retail investors with an opportunity to participate in the equity fundraise. The Placing is not conditional upon the PrimaryBid Offer.

In the event of suitable oversubscriptions, the Company has been notified by Gordon McArthur, Chief Executive Officer of the Company, that he would sell up to approximately £2.8 million worth of existing Ordinary Shares at the Issue Price. Gordon McArthur is currently interested in 26,290,410 Ordinary Shares, representing approximately 46.7% of the current issued share capital of the Company.

The Placing will be conducted through an accelerated bookbuild. The price at which the Placing Shares are to be placed and the number of New Ordinary Shares and Sale Shares will be determined at the close of the Bookbuild.

Beeks says it continues to operate successfully in a demanding, time-sensitive industry and the Directors believe that Beeks is well positioned to take further advantage of the rapid acceleration of Cloud deployment in financial services and the growing need for analytics around those infrastructure environments. These latency sensitive environments need to be built, connected and analysed and Beeks considers itself as one of the few companies in the world that can provide this.

The Directors’ main strategic priority is to continue to grow the Company’s institutional customer base both for public, private and secure cloud deployment as well as complementary analytics solutions, while maintaining Beeks’ core low latency offering. The Company will continue to develop innovative new products like Proximity Cloud, enabling them to expand into new asset classes and geographies, identifying significant opportunities for further exploration.

Such development is evidenced in the planned launch of Exchange Cloud, a new iteration of Proximity Cloud, which is explicitly designed for global exchanges and electronic communication networks. Exchange Cloud is being developed in response to Beeks’ identified demand from global exchanges for a secure, multi-client cloud environment. With Exchange Cloud, clients can offer both end user cloud compute to their own customers, as well as maintain space for their own internal use if required. Furthermore, inbuilt analytics can monitor the performance of the exchange, including market data replay functionality.

Continuing to accelerate Beeks’ addressable market and market share for the business, Exchange Cloud is expected to launch in H2 2022 and the Group is already in up to final negotiations with a number of world-leading global exchanges (with one at Proof of Concept stage).

The proposed Fundraising is intended to be used to accelerate the Company’s growth strategy and capitalise on the significant market opportunity and solid sales pipeline. Funds will be used to provide additional infrastructure capacity and product development (including internal and external resource) for Exchange Cloud, investment into the aforementioned recent contract wins and for additional working capital, including advanced purchases of IT rack capacity, computer servers and other associated hardware to help minimise impact from global supply chain issues, and for transaction costs.

Specifically, the proceeds of the Fundraising are expected to be utilised as follows:

• approximately £1m for investment in Exchange Cloud, the latest version of Proximity Cloud;
• approximately £2m for investment into recent contract wins (Private Cloud, Proximity Cloud);
• approximately £2m for investment (including internal and external resource) to enhance deployment capabilities for clients;
• approximately £2m to further accelerate product enhancements and their launches (Proximity Cloud and Exchange Cloud); and
• approximately £8m for advance purchases of IT rack capacity, computer servers and other associated hardware across the business to manage supply chains for Beeks’ substantial pipeline of deals, including a number of Tier 1 opportunities; plus additional working capital and transaction expenses.