GCICrossword Cybersecurity raises £500k with 40% contribution from CEO
() , a technology company focused on cybersecurity and risk management software, announced a successful fundraise of £500.5k through a placing and direct subscription of 10.0m new ordinary shares at 5p/share.
The fundraise comprised the placing of 6.0m ordinary shares to raise £300k from new and existing shareholders, conducted by Hybridan LLP, as well as the subscription by the company's CEO Tom Ilube of 4.0m ordinary shares to raise a further £200k.
Crossword said it would apply the proceeds from the fundraise to provide additional working capital as it continues to focus on achieving EBITDA and cash breakeven in H2 2024.
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Crossword Cybersecurity successfully completes a £500k fundraise to boost working capital and further its goal of becoming profitable this year. 40% of the proceeds came from the group's outgoing CEO Tom Ilube who now owns 16.7% of 's issued share capital. Ilube is set to be replaced by Stuart Jubb as part of a recently announced leadership restructuring, but will stay on the Board as non-exec Chair. The new shares will be admitted to AIM on July 23.
The new shares were issued at a 27% discount to 's closing mid-price on July 17, 2024, explaining today's price movement. However, the group has continued to deliver excellent financial performance as it nears EBITDA and cash breakeven, expected in H2 2024. In its most recent results for FY23, posted a 15% revenues increase to £4.2m, anticipating yet higher growth to £7m in FY24 on the back of a robust sales pipeline, continued conversion, and margin improvement.
The group has maintained its ambitious FY24 guidance as it remains on track to reach the abovementioned targets. Profitability should be bolstered by a targeted reduction of administrative expenses by half in terms of percentage of revenue in FY24 vs FY22. 's M&A strategy has also contributed to recent positive performance. Following 3 acquisitions in FY1 and FY22, with the companies now fully integrated, cross selling and key account management have delivered organic growth.
A major recent announcement of a new partnership with a global aerospace/defense company should significantly bolster sales of Crossword's SaaS platform Rizikon Assurance within the UK CNI market. The deal materially increased recurring revenue visibility, with "several million pounds" over the next few years identified by management. shares nearly doubled on the announcement, and have since consolidated to around 5.75p or 35% higher than the pre-announcement price, even after today's negative movement.
After last year's £2.62m fundraise and today's £500k helping support sales/marketing and product development, is well-positioned to reach its profitability target within the stated time frame and continue growing. The UK cybersecurity market size is worth US$15.72bn in 2024, and estimated to reach US$25.81bn by 2029 (Modor Intelligence), growing at a CAGR of 10.42%.
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