Airtasker (ASX:ART) share price halted to raise funds for US expansion

The Airtasker Ltd (ASX:ART) share price is in a trading halt whilst it raises funds to make an acquisition…

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The Airtasker Ltd (ASX: ART) share price won't be going anywhere on Friday.

This morning the online marketplace for local services requested a trading halt.

Why is the Airtasker share price in a trading halt?

Less than two months since completing its initial public offering (IPO) on 23 March and raising $83.7 million at $0.65 per new share, Airtasker is tapping the market again for funds.

According to the announcement, the company is seeking to raise $20.7 million via a capital raising.

Airtasker is aiming to raise these funds at $1.00 per new share, which represents a discount of approximately 7.5% to its last close price. This will be undertaken via a fully underwritten placement to institutional, professional and sophisticated investors.

Why is Airtasker raising funds?

Airtasker is raising capital in order to fund an acquisition in the United States and to further invest in its international growth plans. The latter includes its plans to expand into key city markets in the United Kingdom.

The release explains that the company has signed an agreement to acquire San Francisco-based Zaarly for ~$3.4 million. It is a local services marketplace with more than 597,000 registered users and 900+ verified service providers. Management believes the acquisition will jump start its expansion in the massive US market.

Furthermore, Zaarly's highly experienced team of marketplace product, engineering, and operations executives will continue to be led by CEO Bo Fishback, who joins Airtasker to lead the US market expansion.

What's next?

The Airtasker share price is expected to remain in its trading halt until the earlier of the commencement of trade on 25 May and the completion of its placement.

At the time of writing, the Airtasker share price is up a sizeable 66% since hitting the ASX boards in March. This is all the more impressive given the recent weakness in the tech sector.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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