The Airtasker Ltd (ASX: ART) share price was a particularly positive performer on Tuesday.
The online marketplace for local services returned from its trading halt and jumped as much as 21% to $1.31 at one stage.
The Airtasker share price eased back as the day went on, ultimately ending the session with a 12% gain to $1.21.
Why did the Airtasker share price jump 21%?
Investors were bidding the Airtasker share price higher today after it announced the successful completion of a private placement.
According to the release, Airtasker was able to raise $20.7 million via a fully underwritten share placement to institutional, sophisticated, and professional investors at $1.00 per share. This was a 7.4% discount to its last close price.
Why is the company raising funds?
The placement proceeds will be used to fund its acquisition of US-based local services marketplace Zaarly and expand into key city markets in the US and UK.
Last week Airtasker announced an agreement to acquire Zaarly for ~$3.4 million. This acquisition provides the company with more than 597,000 registered users and 900+ verified service providers. It believes this will help to jump start expansion in the lucrative market.
The company will also bring Zaarly’s highly experienced team of marketplace product, engineering and operations executives on board. They will be led by CEO Bo Fishback, who joins Airtasker to lead its US market expansion.
What are its market opportunities?
Given that the company estimates that it has a $52 billion opportunity in the Australian market, it will come as no surprise to learn that the UK and US markets offer significant greater potential.
For example, management estimates that the US market is worth half a trillion dollars. This gives the Zaarly business a huge runway for growth in the future.
This may go some way to explaining why the Airtasker share price was in such fine form on Tuesday.