Wearable fitness tracker maker Fitbug is turning to crowdfunding as it seeks to raise £2.6m.
Crowdfunding platform SyndicateRoom is offering investors enterprise investment scheme (EIS) shares, on the same terms of institutional investors.
Fitbug, which is listed on the London Stock Exchange’s alternative investment market (Aim), has already raised £852,000 through institutional investors. This leaves up to £1.76m to be raised via SyndicateRoom and other investors.
Fitbug’s share price fell 24 per cent to 0.21p on Tuesday morning after the announcement.
The funding round is expected to close on 25 July.
Fitbug is in the process of a “turnaround drive” led by chief executive Anna Gudmundson, who took over last August.
The turnaround involves moving the company’s focus away from delivering wearable devices to an “over-saturated” business-to-consumer market. Instead, its focus is turning to “the growing global corporate audience for digital wellness”.
It estimates that the US corporate wellness market is to grow 8.4 per cent annually over the next five years to $12.1bn.
SyndicateRoom is the only crowdfunding platform to have intermediary status with the London Stock Exchange, and offers access to both the public and private equity markets.
“Having assessed a range of finance options to support our short-term and long-term working capital needs, we were particularly excited by the prospect of offering new shares to investors via SyndicateRoom,” said Gudmundson.
“With its recent membership of the London Stock Exchange, SyndicateRoom is the only platform that could effectively distribute our shares direct to crowdfund investors, enabling us to expand the number of owner-advocates for our business as we focus on becoming a leader within this space by delivering an innovative app-based technology to enhance employee wellness.”