Ottawa’s Ackroo raises $500,000 in private placement

Money

An Ottawa-based provider of loyalty and gift card technologies for retailers says it plans to raise up to $500,000 to fund its ongoing growth.

Ackroo (TSX-V: AKR) says the money will be used for working capital to bolster its sales efforts and software developments.

The company plans issue up to 6,250,000 units at a price of eight cents each. The company’s shares closed at 6.5 cents apiece on the TSX Venture exchange on Tuesday, up 8.3 per cent.

Ackroo sells cloud-based gift card and loyalty platforms to retail and hospitality customers. Its software-as-a-service business model generates monthly recurring revenues, as well as one-time installation and service fees.

The company’s full-year revenues grew to $2.2 million last year, up 22 per cent from 2015. However, the company also rang up a $1.8 million loss during the year.

Ackroo says it’s in the early stages of its growth plan and is focused on increasing revenues and customers. It has not yet achieved profitable operations and expects to incur further losses, which means it relies on selling stocks through private placements and other mechanisms to fund its operations.