Mobile marketing specialist VMob has raised $4 million of new capital, building on the $1.3 million it secured earlier this year from a private share placement.
The oversubscribed raise was supported by five Australian institutions and one New Zealand institution, which VMob couldn't name, along with high net worth individuals.
The funds will go towards hiring developers and sales and marketing staff, CEO Scott Bradley says.
"We're hiring development resources internally who are building the platform," he says. "Those people aren't cheap. New Zealand has a small pool of development capability but has highly talented developers so we have to compete against the likes of the Vends, the Diligents and Xero."
Because it uses channel partners, VMob doesn't need large salesforces offshore, but needs senior marketers able to talk to chief marketing officers and heads of digital in key markets, says Bradley.
Jeremy Leonard, who set up the Fuse agency for Omnicom in New Zealand, is leading the charge in Asia and VMob is about to appoint another senior executive in Europe, says Bradley.
It also wants similar personnel in the US and Latin America, where it has other deployment opportunities.
VMob earns recurring revenue from mobile vouchers, mobile ads, email, SMS, Facebook and AdWords — and up front license revenue. Among its customers are Yellow Pages for menus.co.nz, and McDonald's Netherlands in collaboration with DDB Tribal in Europe.
The company had 350 investors after its reverse listing on the NZAX late last year and hopes to have more than 500 after this latest capital raising, says Bradley.
He adds high net worth individual investors account for about 20 percent of its portfolio. In its annual result in March, VMob announced a $1.74 million loss, with revenues of $90,000.
Its focus is on big deployments and long-term global growth, delivering on the "massive global opportunity" in the mobile market, Bradley says.
"As with most platform businesses there's always that trade off between moving to rapid profitability or increasing shareholder value by globally expanding." Bradley says.
The level of interest in the capital raising and the stature of the investors was due to its platform and the market opportunity.
“Mobile marketing solutions that deliver personalisation leading to behavioural change and loyalty are the holy grail for brands. Combine this with the uniqueness of our platform and the IP we have created and own [and it] makes us a very attractive proposition. Secondly the available revenue to mobile solutions is significant and low hanging. We know print readership is plummeting, which will result in revenue shifts away from this channel."