Defenx raises £1.4m in discounted placing to accelerate growth

Cyber-security software group Defenx has raised £1.4m and appointed a new director as part of a new growth effort, amid heightened corporate concerns in the wake of the WannaCry ransomeware attack.

Defenx raised £1.12m under a placing via broker WH Ireland, a further £250,000 through a subscription with BV-Tech at 160p per share, and hopes to raise a further £2m through the issue of secured convertible bonds that will pay a coupon of between 8% and 10%, and will be convertible into Defenx shares at the conversion price of 200.0p each.

The placing and subscription shares will represent approximately 7.2% of the company's existing issued share capital.

Defenx confirmed later on Monday morning that the placement had raised a pre-expense total of £1.425m.

The funds will be used to invest in the product portfolio, broaden the development and operations teams, and expand sales capacity with a greater focus on the corporate sector.

A strategic partnership with BV Tech, linked to the placing, is expected to provide access to corporate customers to whom the expanded product portfolio can be sold.

Andrea Stecconi, chief executive officer, said: "These funds will enable us to bring forward future plans with a coordinated investment in our product portfolio, delivery and sales capacity over the next 12 months to accelerate growth in existing and corporate markets and de-risk the Group's operations. I look forward to reporting on our progress later in the year."

BV-Tech, which purchased 156,250 shares, has been granted the opportunity to appoint two directors to the board as part of the strategic partnership between the two companies and announced that Raffaele Boccardo, founder and chief executive of BV-Tech was to take one of the two seats.

Of the appointment, Stecconi said, "I am delighted that Raffaele has joined the board of Defenx. With his background and success in growing BV-Tech, we believe that he will be instrumental in helping to develop and deliver the group's strategy going forward."

The company intends to use the proceeds of the fundraising to accelerate software development spend on its consumer and corporate products over the next 12 months.

At 1000 BST, shares had dropped 8.18% to 168.95p.