KAPE.L Regulatory News (KAPE)

Crossrider plc

("Crossrider" or the "Group")

First day of dealings on AIM following £45.9 million placing

Crossrider, a next generation digital advertising group specialising in monetising web and mobile media through the use of big data, is pleased to announce that admission and trading of its Ordinary Shares commences today on AIM.

The placing, which was oversubscribed, successfully raised £45.9 million (US$75 million) before expenses, comprised the issue of 44,563,107 new Ordinary Shares at the Placing Price of 103 pence per share. The total number of Ordinary Shares in issue at Admission will be 148,463,039, giving Crossrider a market capitalisation of approximately £152.9 million (US$250 million) at the Placing Price.

The net proceeds of the Placing will be used by Crossrider to increase traffic to its platforms, diversify the business's regional, client and ad network footprint and to continue to expand its data aggregation and analysis capabilities, both organically and via acquisitions. In addition, Crossrider plans to grow its research and development spending and increase staff resources to support further international expansion.

Shore Capital is acting as nominated adviser and broker to Crossrider and acted as sole bookrunner to the Placing.

Crossrider's TIDM Code is "CROS" and its ISIN number is IM00BQ8NYV14.

Highlights

§ Crossrider's web and mobile platforms power ad networks, agencies and direct publishers and enable thedelivery of relevant digital advertising through the analysis of big data; making online marketing significantlymore efficient and cost effective

§ Rapidly growing reach:

o Delivered relevant adverts to 90 million users in January 2014, growing to 150 million users in August 2014

o Delivers more than 1.6 billion adverts to its audience per day and has 25,000 live campaigns running at any given time

o Proprietary web apps platform used by 30,000 developers, generating 1.8 million average daily installations with 930 million installations to date

o Mobile platform empowers 100-plus mobile advertising networks, serving over 800 publishers and 2,400 advertisers

o App distribution platform delivering apps to over 30,000 paid subscribers per month with over 20 million installations to date

§ Vision is to become the de facto standard platform for delivering relevant web and mobile adverts to billions of people, powering the next generation of digital advertising

§ Significant and growing exposure to rapidly growing market; worth US$120 billion in 2013 and expected to grow to US$204 billion by 2018, driven by growth in mobile advertising

§ Diversified business model spanning the digital advertising ecosystem, with a varied range of clients and revenue base, both geographically and by economic sector

§ All data collected is non personal identifiable information

§ Strong management team led by CEO and co-founder Koby Menachemi. Chairman is Don Elgie, founder and former Group CEO of Main Market listed Creston plc (LSE:CRE)

§ Profitable and fast growing: on a pro forma basis in 2012 generated revenues of US$6.4 million, growing to US$21.6 million in 2013 and to US$29.3 million for the first half of 2014, generating adjusted EBITDA of US$7.7 million in that period

Koby Menachemi, Chief Executive Officer of Crossrider, said:

"We are delighted to have successfully completed our AIM admission. The interest in our business from high quality institutions and their subsequent demand for our shares is a strong endorsement of our strategy and service offering.

"Crossrider is at the cutting edge of a revolution in online advertising. Our aim is for Crossrider's platform to become the de facto standard to enable advertisers and publishers to accurately match products and services with the most relevant consumer. We are in a rapidly growing marketplace, driven by growth in mobile, of which we aim to be at the forefront."

Enquiries

Unless the context otherwise requires, defined terms shall have the meaning ascribed to them in the Admission Document available on the Group's website.

Notes to Editors

Introduction and Business Overview

Crossrider operates in the rapidly growing digital advertising market, specialising in improving return on investment for advertisers and increased monetisation for publishers through the analysis of big data. Crossrider has both web and mobile platforms which generate its own big data and has developed a proprietary ad serving algorithm and engine that can extract value from this data to deliver relevant advertising to targeted users. During January 2014, the Group delivered ads to 90 million users; by August 2014 this monthly audience had grown to over 150 million, with 1.6 billion ads delivered per day by the Group.

Web Apps platform

Crossrider provides a platform which allows developers to build browser web apps (also commonly referred to as extensions or add-ons) which function on each of the four main web browsers (Microsoft's Internet Explorer, Google's Chrome, Mozilla's Firefox and Apple's Safari). There are over 30,000 developers using Crossrider's platform who have built over 60,000 web apps. Web apps built on Crossrider's platform are downloaded on average over 1.8 million times a day and there have been over 930 million downloads to date.

Crossrider enables developers to monetise their web apps through the provision of intelligent advertising. Advertising revenue is shared between the developer and Crossrider with the developer typically receiving the majority of the net revenues generated from their apps.

Crossrider aggregates web apps created by developers together with its own proprietary web apps and has, as a result, generated a significant online inventory with over 50 billion monthly web page views of online content and over 40 billion monthly requests to display advertisements.

Mobile ad server

Crossrider's Ajillion business is a white label mobile ad server, ad exchange and demand side platform, used by mobile ad networks, agencies and monetisation platforms. The platform currently empowers over 100 ad networks, including some of the industry's largest players such as YBrant, Matomy, Darriens, Inneractive, Marimedia, McCann Erickson, SayMedia, SupersonicAds, WEBmedia and IronSource. The platform's main services include:

§ White label mobile ad server: offering 'cutting edge' ad server technology which enables the targeted delivery of ad impressions and provides networks with the ability to manage and monetise publishers' inventory, and manage advertisers' campaigns;

§ Ad exchange: allows ad networks to buy and sell media from each other seamlessly;

§ Demand side platform: allows advertisers, agencies and advertising networks to buy advertising impressions across multiple ad exchange platforms via a single interface; and

§ Business Intelligence: provides monitoring and unified reporting on ad networks' key performance indicators, including clicks and conversion rates.

AjillionMax's revenue model is based on usage fees charged as a revenue share.

Ad Network

Ad networks act as "brokers", aggregating the supply of ad space from publishers and matching it with demand from advertisers. The Group, through its own mobile ad network, DefinitiMedia, delivers solutions for performance based advertisers (seeking to increase ROI) and publishers (seeking to maximise fill rate and value per impression) in the mobile field. DefinitiMedia benefits from both its ability to offer targeted advertising using the Crossrider Engine and from the capabilities of AjillionMAX, which includes precision tracking, scale and global distribution. It operates a variable and fixed price model, based on CPA, and also a revenue sharing model.

Software Distribution

The Group has its own proprietary software tool, which offers users a repair service for PCs and mobile devices via the internet. This tool, known as Reimage, has repaired over 1.5 million PCs and mobile phones. Over 30,000 subscriptions to Reimage were sold in August 2014.

Business Strategy

Crossrider's vision is to become the de facto standard platform for delivering relevant web and mobile ads, thereby powering the next generation of digital advertising.

The Group intends to increase traffic to its platforms, improve the quality of its data insights and expand into new geographic regions through:

§ the acquisition of new data sources and technology through value accretive acquisitions which consolidate the Group's footprint within the digital media ecosystem;

§ investment into the organic development of the Group's existing platform and business;

§ greater marketing of the Group's service capability to clients;

§ increases in the Group's R&D budget to:

o keep the Group's mobile platform at the forefront of mobile ad serving technology;

o maintain the market leadership of its web app development platform; and

o improve the Crossrider Engine by enabling better user-profiling, retargeting and segmentation of users in context with the ad space (both text and video);

§ investment in the Group's own ad network operations by acquiring additional ad networks and also media buying operations;

§ expansion into territories including China, India and Latin America, with a strategy already in place; and

§ increases in staff resource in order to meet organic objectives, in both technical, development, marketing and business relationship roles.

Key Strengths

The Directors believe that Crossrider benefits from a number of key strengths that differentiate it from its competitors and which they believe will enable it to take advantage of current and future growth opportunities. These strengths include:

§ A diversified business model. Crossrider is uniquely positioned across the digital advertising ecosystem with resultant diversified revenue streams.

§ A strong position to take advantage of the growth in mobile which is expected to be the fastest growing stream of digital advertising.

§ An excellent track record in retaining publishers and advertisers. Crossrider's revenue retention rate for the six month period ending 30 June 2014 compared to the six month period ending 31 December 2013 was approximately 140 per cent. Crossrider defines its revenue retention factor as: revenue in the current period derived from customers who contributed to revenue in the prior period expressed as a percentage of total revenue in the prior period.

§ A market leading web app development platform.

§ Established relationships with a large network of digital media publishers.

§ A scalable and adaptable technology platform.

§ The Group is profitable and cash generative: generating adjusted EBITDA (on a pro forma basis) of US$7.7 million in the first half of 2014.

Digital Advertising Market

§ eMarketer estimates that global ad spending in 2014 will be $545 billion and, within this, it estimates that global digital ad spending is set to represent $138 billion.

§ Crossrider operates in a number of rapidly growing interlinked digital advertising markets. Global digital advertising is projected to grow to $204 billion in 2018, representing a compounded annual growth rate of 11.8 per cent. per annum from 2012 to 2018.

§ In 2018 digital is forecast to account for 31 per cent. of total advertising revenue and is expected to be the main growth driver in the overall market.

§ The digital advertising market includes both "online" and "mobile" segments. Mobile advertising has been growing rapidly and is considered a strong growth area in the future.

§ eMarketer estimates that the mobile advertising market has grown from $8.8 billion in 2012 to $18.0 billion in 2013 and expects the market to reach $94.9 billion in 2018. They expect this market to grow at a compound annual growth rate of 48.6 per cent. between 2012 and 2018, driven by the growth in the number of smart mobile devices in this market and the increased use of such devices.

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