The company said on Wednesday that it raised £15m through a placing of 3.3m shares at £4.50 each, a discount of 85p on Tuesday’s closing price. The placing represents 19.4pc of Phorm’s enlarged share capital.
It comes just a week after Kent Ertugrul, Phorm’s chief executive, said the company was in a “good” financial position and did not need to raise fresh cash.
Michael Armitage, analyst at Blue Oar, said: “A cash-call was inevitable. I estimate Phorm has about £8m of cash. If they continue burning through cash [at the current rate] they would have run out by the end of the year.”
The roll-out of Phorm’s Webwise technology has been dogged by controversy following news that BT ran two trials using the software without seeking its customers’ permission in 2006 and 2007.
BT apologised and said no customers’ IP [internet computer] addresses were divulged and it had no way of knowing who was taking part in the trials. The UK government ruled it had not breached privacy laws.
The Home Office and Information Commissioner ruled Phorm’s technology does not breach users’ privacy, as long as they are asked for consent.
Several British internet service providers (ISPs) have expressed interest in the technology, but none has yet announced deals with Phorm.
Mr Etrugul said: “I am pleased that the financial community has demonstrated its support for Phorm, with a substantially over-subscribed offering.”
By Rupert Neate