The Serko Ltd (ASX: SKO) share price is back from its trading halt and deep in the red.
At the time of writing, the travel booking technology company's shares are down 10% to $6.65.
Why is the Serko share price tumbling lower?
The weakness in the Serko share price today has been driven by the completion of the company's NZ$75 million placement.
According to the release, the placement was fully subscribed at NZ$7.05 per share, representing a 10.2% discount to the closing price of NZ$7.85 on 23 November.
Management advised that the placement was well supported, attracting bids well in excess of the NZ$75 million total offer amount from institutional and other select investors in both local and offshore markets.
Serko will now push ahead with a retail offer aiming to raise a further NZ$10 million from retail shareholders.
Why is Serko raising funds?
Serko launched its capital raising to raise funds for three particular activities. These are investing for growth with Booking.com for Business, developing a global marketplace strategy, and for potential acquisitions that accelerate its global expansion opportunities.
In respect to the former, the company notes that following the successful migration of Booking.com business customers onto the new Zeno powered Booking.com for Business platform, Serko will undertake targeted investment to optimise customer engagement and extend the offering across global markets to maximise the potential of the opportunity.
As for the global marketplace strategy, Serko intends to transform from an online booking tool into a distributed marketplace. This will create an ecosystem of travel content suppliers and business travel market segments connected through the Zeno platform.
Serko's CEO, Darrin Grafton, was pleased with the success of the capital raising.
He commented: "The capital raising enables Serko to continue to invest to capture the growth opportunities across key markets, and realise our vision of transforming from an online booking tool into a global marketplace. We are pleased with the level of support received for the raise from new and existing investors."
