4th Jul 2023 11:55
(Alliance News) - Kooth PLC's shares jumped on Monday after it announced it completed a placing of 3.3 million shares, raising gross proceeds worth an estimated GBP10 million through the issue of new shares at a price of 300 pence each.
Shares in the London-based digital mental health platform were up 33% each at 348.00 pence in London on Tuesday morning.
Kooth said it will use GBP5.0 million of the net proceeds of the placing to "accelerate its international expansion strategy", and GBP4.5 million in investing in US growth in preparation of 2024.
"This placing, in combination with the finalisation of our contract with the State of California announced this morning, will ensure that Kooth is exceptionally well placed to deliver on both its current contracts and its new business pipeline," said Chief Executive Officer Barker.
The announcement of the funding following the news this morning that Kooth had signed a USD188 million contract with the state of California to serve all six million 13 to 25-year-olds through a digital mental health platform.
The announcement of this signing followed the March 16 announcement that it had been selected as the primary vender partner to California.
Kooth will provide services to the Behavioural Health Virtual Services Platform, a technology-enabled services solution for all children and young people in California. The company said the service is expected to launch in January 2024.
The company will work with the Department of Health Care Services and young people in California to extend its existing platform, with a mobile app and capabilities that can develop behavioural health support.
As a result, Kooth said the company expects a material update to 2023 revenue guidance to not less than GBP34 million, up 69% from GBP20.1 million in 2022.
The contract is expected to have a highly material impact on revenues and annual recurring revenues from 2024.
CEO Tim Barker said: "As a pioneer and innovator in digital mental health care, being awarded this contract in a highly competitive process is a huge testament to the world-class technology and clinical expertise that we have developed over the decades."
Kooth said it intended to hire over 200 staff in the next twelve months to support its Californian and broader US infrastructure.
Kooth's strategy over the next 18 months is to develop and launch a digital mental health platform for all existing and new US customers, and it plans to roll out its platform to the UK.
"Kooth has identified additional opportunities in the US, a key market for future growth, underlining the scale of opportunity in the world's largest health care market and the group's ability to localise its services internationally," the company said.
"The group's long-term strategy involves extending the platform to other international markets, such as localisation and licensing to health care operators to run Kooth in their country."
By Will Neill, Alliance News reporter
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