Leading mobile gaming company plots US expansion

Leading mobile gaming company plots US expansion

Wednesday, April 29, 2015
Leading mobile gaming company plots US expansion

Mobile gaming platform provider Nektan has continued its busy start to 2015 by announcing that it has raised £7.1m (€9.9m/$10.9m) of new finance.

The cash will be used primarily to aid expansion in the US, grow its European business and launch its partnership with the Sun newspaper in the UK.

The funding comes after a quarter in which it has signed new contracts with 14 real money gaming and freemium partners, while Nektan's US joint venture, ReSpin, has 18 signed contracts or letters of intent with licensed US tribal and commercial casino operators.

The company also welcomed a new chief executive in January, with David Gosen's arrival meaning Gary Shaw moved into the role of executive chairman.

Nektan said it had raised £4.7m by issuing convertible loan notes, £1.7m through the placing of one million shares and will draw down a further £600,000 from its loan facility with shareholder Disruptive Tech.

"The last six months have seen an acceleration in demand for our mobile, tablet and desktop gaming products and services, most notably with our landmark real money gaming partnership announced with The Sun in the UK," said Gosen.

In the three months to March 31, Nektan saw net gaming revenue from real money gaming white label partners more than double from the previous quarter.

It added that new depositors were up by more than 84 per cent and deposits by more than 85 per cent on the previous quarter.

However, despite such success, the company believes that new funding was essential to drive further expansion.

A Nektan spokesman said: “The board has continued to consider several funding options for the company, and believes that the financing will ensure the company now has the capital to accelerate its stated investment plans.
“The company had originally expected to secure further capital in March and therefore the rate of investment and revenue growth over the last two months has not been at the levels originally envisaged by the directors.

“The directors, however, remain encouraged by the considerable progress in the business and have maintained a tight control over costs.

“The directors believe that the net proceeds received by the company from the financing should ensure that it is fully funded to get to cash flow break-even point.”

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