Kiwi breast cancer detection firm raising $19m to fund overseas expansion

Wellington-based Volpara, which focuses on early detection of breast cancer using artificial intelligence, is raising money to fund expansion. Picture / Getty Images

ASX-listed Volpara Health Technologies is raising A$18 million ($19.3m) through a placement to institutional investors and a share purchase plan to speed up growth in the US and fund the rollout of direct sales into Asia.

Wellington-based Volpara, which focuses on early detection of breast cancer using artificial intelligence, is raising A$15m selling shares in a placement at A60c apiece to institutional investors - a 13 per cent discount to the last trading price before the shares were halted.

It plans to raise another A$3m from existing shareholders, who will be able to buy up to A$15,000 of shares at the same price.

The health-tech company's cash on hand will rise to A$21.8m from A$4.6m once the capital raising is completed, and comes after Volpara's operational cash outflow narrowed to $7.7m in the year ended March 31 from $8.2m a year earlier.

Volpara's earmarked some $9m to expand its US direct sales, marketing and customers teams to accelerate sales growth with a view to delivering 9 per cent market share by the end of the 2019 financial year.

An additional $4m will develop new features in an effort to boost the firm's fee per woman, while $2m will begin the rollout of direct sales into Asia, a rapidly growing market. That will leave the company with $3m of working capital.

The placement is expected to settle on May 4 while the share purchase plan will run from May 7 to May 25. The allotment will take place May 31.

Morgans Corporate and Bell Potter Securities have been appointed the joint lead managers.

Volpara said it had achieved regulatory clearances for Japan, Taiwan, Australia and South Korea. Part of the capital raise would be used to target private hospital chains, find the right distribution partners and ensure Volpara was in government-run trials as necessary, it said.

Separately the company said its cash position was $4.8m in the final quarter of the year to March and its receipts from customers reached $3.07m in the 12-month period, the first time they have surpassed $3m. It holds no debt.

"This has been our best sales quarter to date. We aimed high, setting ambitious milestones for the year, which we've met both in terms of ARR (annualised recurring revenue) and US market penetration, now at $3.6 million and 3.2 per cent respectively," said Volpara chief executive Ralph Highnam.