Phorm Gets Cash to Continue, Plans China Launch

Online ad targeting company Phorm has arranged a £30m equity placing with institutional and other investors including its existing NED Mark Schneider. The funds will enable it to repay earlier borrowing and to proceed with its fledgling businesses in a number of countries.

Schneider's investment is £1.6m while UK fund Blackrock is investing £7m.

Phorm announced another set of frightening accounts last month, acknowledging cash burn of more than $2m a month and cumulative losses to date of $150.9m, but continues to hold its nerve, attract investors and talk positive about the countries it is already rolling in - Brazil and Romania - and now a number in which a launch is said to be imminent, including China. Phorm says it has signed contracts in 'two major markets' including the People's Republic, with 'expected deployment in the first half of next year'.

In the September financial announcement, Phorm acknowledged that 'additional funding [would] be required to continue in business this year', and said discussions with possible investors were underway. The new placement effectively values the company at £100m, while its current market capitalisation as at close of business last Thursday was c.£28.2m.

Phorm says it is now both scaling up and speeding up operations, having learnt 'some very tough lessons from its experience in the UK' and significantly changed 'both its approach and its proposition'. The Romtelecom roll-out is completed just four weeks after it commenced - a much faster timescale than in Brazil and a template for future launches - and in addition to China it expects to enter 'a number of additional markets within the first half of next year'. The latter include 'an important Southern European market' and 'an important Southeast Asian market', both scheduled for deployment in Q1.

Phorm is incorporated in Delaware, US and has more than 140 employees and contractors based in Bucharest, Seoul, Sao Paolo and London.

Web site: www.phorm.com .