Catena buys Insight Capital stake to launch AI push
Catena Group has agreed to buy 9.1% of Insight Capital Partners for £1.5m in cash as a first move to invest in artificial intelligence businesses.
The venture capital investor said it had the option to increase its stake in Insight to 30.2% for a further £5m in cash. To fund the purchase, it announced a sale of 4m shares at no less than 25.0p each to raise at least £1m and set up a £2m convertible loan note of which £0.5m will be issued as part of the fundraising.
Insight uses AI to help financial services clients extract data from old computer systems. In the year to the end of March 2019, it generated revenue of £0.7m and a pretax loss of £1.1m. In the nine months to the end of December. Insight earned revenue of £1.8m and a £0.2m profit.
Insight's founders Steve Cracknell and Warren Pearson worked as developers and engineers at Goldman Sachs, Thomson Reuters and other businesses before founding Insight two years ago. Catena, which is listed on AIM, said its investment was a first step towards a broader strategy to invest in AI and machine learning.
Matthew Farnum-Schneider, Cadena's chief executive, said: "Machine learning is set to revolutionise the asset management and financial services industries and we believe that Insight is ideally placed to capitalise on the exponential growth in the sector. Insight's demonstrated performance of delivering near-term tangible commercial benefits via its machine learning solutions has already generated profitable growth."
Catena shares fell 3.6% to 26.5p at 14:03 GMT.