MAIS.L Regulatory News (MAIS)

31 May 2013

blur (Group) Plc

("blur Group" or the "Company")

$11.5m fundraise to capitalise on first mover advantage in s-commerce

blur Group, the company that's reinventing commerce at blurgroup.com is pleased to announce that, following a strong show of support from existing and new institutional investors, it has conditionally raised $11.5 million (£7.6 million) (before expenses) through a placing of new ordinary shares. N+1 Singer acted as placing agent.

These funds will be used to accelerate growth through investment in new customer acquisition worldwide and in technology development for the Global Services Exchange and its s-commerce platform, which is now used by 28,000 businesses in 141 countries worldwide.

The fundraising, which was oversubscribed, will be effected through a conditional placing of 5,077,263 new Ordinary Shares at 150 pence per share, with existing and new institutional investors. The Placing Shares will represent approximately 17 per cent. of the enlarged issued share capital of the Company. The Placing Price represents a discount of 2 per cent. to the Closing Price of 153 pence per Ordinary Share as at 30 May 2013 (being the latest practicable date prior to the date of this announcement).

"The accelerated growth of blur Group's business since the Company's IPO in October 2012 demonstrates the continued adoption of s-commerce, a $1tn market", commented Philip Letts, blur Group CEO. "We have been delighted by the reaction from the capital market, its endorsement of blur's business model and its scalability. The fundraising round, considerably over subscribed, delivers additional funds to give us the firepower to capitalise on our first mover advantage in this significant and growing market, enabling us to accelerate the take up of s-commerce globally. Now, nearly 1,000 new businesses a month are adopting blur's Exchange and this is a fraction of the overall market."

1. Background to and reasons for the Placing

The global market for business services, including creative, technology, legal and accounting, is estimated to be in excess of $2 trillion. Even when taking into account long-term contracts, media spend and the non-corporate areas of legal and accounting, the addressable market for blur Group and its services commerce, (or "s-commerce") platform is estimated to be in the region of $1 trillion. blur Group believes that s-commerce will experience market adoption in business services in the same way that e-commerce did in consumer retail. With its Global Services Exchange already addressing eight different business and creative services areas, and with 28,000 businesses on the Exchange from 141 countries worldwide, blur Group is a first mover in the market and is well positioned to take full advantage of this significant anticipated market growth.

Listing on LSE AIM and raising gross funds of $6.4 million in October 2012 allowed the Group to invest in areas to reinforce its first mover advantage and deliver growth in its core metrics; number of briefs, number of experts and brief values.

In particular, the IPO investment has been used for:

● Technology: delivery of new products including blur 3.0, Project Space (a collaboration and project management tool for users) and the Premium Account (SaaS tool to allow multiple accounts per company). A major new architecture for the platform was released, blur 3.0, unifying and integrating customer, expert, partner dashboards and apps and introducing new revenue streams like the Premium Accounts;

● Marketing: team growth and investment in online marketing and PR programs;

● Corporate Sales Team: the team has doubled in size and a US sales office in Dallas has been set up. From the third quarter of 2012 to date, the US has seen the highest share of briefs submitted as a result; and

● Support Services: recruitment of the Head of Exchange Development in US and growth in the finance team as well as establishing an in-house talent team to support employee growth.

As a result of this investment, customer acquisition is growing with over 800 new service providers and more than 100 project briefs having come on to the Exchange in April 2013.

The Board believes the Placing will accelerate both the ongoing adoption of blur Group's s-commerce platform and the uptake by businesses worldwide of s-commerce as a way to buy services. By increasing investment in customer acquisition and delivery of new products and features on the technology roadmap, blur Group expects to reinforce and accelerate its first mover advantage.

2. Use of proceeds

The net proceeds of the Placing are expected to be $10.9 million (£7.2 million) and will be used to accelerate growth through investment in new customer acquisition and in technology development. blur Group has two main channels for customer acquisition: digital marketing and corporate sales. Digital marketing focuses on brief acquisition and corporate sales focuses on the enterprise customer. Enterprise customers are more likely to use the Exchange for multiple projects across multiple services types (the repeat customer). Additional investment in technology will accelerate product development to broaden revenue streams, including patentable technology, new product features and enterprise apps. This roadmap investment will also deliver a new business intelligence platform to both drive internal efficiencies with new payment platforms, enhanced workflow and analytics as well as enabling blur Data (services data derived from the platform) to be launched as a separate product stream.

3. Information on the Placing

The Company has conditionally raised $11.5 million (£7.6 million) (£7.2 million net of expenses) by way of a placing of 5,077,263 new Ordinary Shares at the Placing Price with existing and new institutional investors. The Placing Shares will represent approximately 17 per cent. of the enlarged issued share capital of the Company. The Placing Price represents a discount of 2 per cent. to the Closing Price of 153 pence per Ordinary Share as at 30 May 2013 (being the latest practicable date prior to the date of this announcement).

In connection with the Placing, the Company has entered into the Placing Agreement pursuant to which N+1 Singer has agreed, in accordance with the terms of the Placing Agreement, to use reasonable endeavours to procure subscribers for the Placing Shares.

The Placing is conditional, inter alia, on:

● the passing of the Resolutions at a general meeting of the Company to be held on 17 June 2013, including a special resolution which will give the Directors authority to disapply statutory pre-emption rights in respect of the allotment of the Placing Shares;

● the conditions in the Placing Agreement being satisfied or (if applicable) waived and the Placing Agreement not having been terminated in accordance with its terms prior to Admission; and

● Admission becoming effective by no later than 8.00 a.m. on 18 June 2013 (or such later time and/or date, being no later than 8.00 a.m. on 28 June 2013 as the Company and N+1 Singer may agree).

The Placing Agreement contains customary warranties given by the Company to N+1 Singer as to matters relating to the Group and its business and a customary indemnity given by the Company to N+1 Singer in respect of liabilities arising out of or in connection with the Placing. N+1 Singer is entitled to terminate the Placing Agreement in certain circumstances prior to Admission including circumstances where the warranties are found to be untrue or inaccurate or misleading, or the occurrence of certain force majeure events.

If any of the conditions are not satisfied or waived (where capable of waiver), the Placing Shares will not be issued and all monies received from investors in respect of the Placing Shares will be returned to them (at the investors' risk and without interest) as soon as possible thereafter.

The Placing Shares will be issued credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after the admission of the Placing Shares in respect of Ordinary Shares and will otherwise rank on admission of the Placing Shares pari passu in all respects with the existing Ordinary Shares. The Placing Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on LSE AIM. On the assumption that, inter alia, the Resolutions are passed, it is expected that admission of the Placing Shares will become effective on or around 18 June 2013.

4. Current Trading and Outlook

The Group announced its full year 2012 financial results on 9 April 2013. The Group reported revenues of $2.81 million, representing year-on-year growth of 216%, and a loss from operations of $1.86 million, both in line with market forecasts. The first quarter of 2013 showed metrics further supporting the continued growth. In particular, the Group saw the highest ever sequential quarterly increase (43% above the fourth quarter of 2012) by percentage quarter-on-quarter growth for briefs submitted since the Exchange was launched, with over 100 briefs being submitted per month and over 800 expert service providers joining each month.

The Board believes that the added investment that the placing will provide will further enhance these growth prospects and it remains optimistic that this momentum will continue and show strong future growth.

5. General Meeting

The Directors do not currently have authority to allot all of the Placing Shares and, accordingly, the Board is seeking the approval of Shareholders to allot the Placing Shares and disapply statutory pre-emption rights in respect of such allotment at the General Meeting, together with approval to increase the Company's general authority to allot new Ordinary Shares and disapply pre-emption rights in view of the enlarged share capital of the Company following the Placing.

A notice convening the General Meeting, which is to be held at 12.00 p.m. at the offices of blur (Group) plc, Studios 2-8, Westbourne Studios, 242 Acklam Road, London W10 5JJ on 17 June 2013, will be posted to shareholders shortly.

For further information, please contact:

About blur (Group) plc

blur Group is a technology company reinventing how businesses do commerce at blurgroup.com. Its Global Services Exchange delivers services differently: a new way to buy, manage and pay for core services. Nearly 30,000 businesses in 141 countries have adopted this s-commerce platform and changed the way they work.

blur Group (BLUR) is a public company headquartered in the UK with offices in the US and Europe. It is listed on the London Stock Exchange's AIM market. blur was founded in January 2006 and launched in alpha in 2007 with the full, formal launch of the Global Services Exchange in January 2010. At that time, just over three project briefs per month were submitted. Now 100 projects per month from companies like Broadridge, Coral, Exceed, HCA, Momentive, Red Commerce, the Financial Times, Berlitz, Butlins, GE Healthcare and Tyco are received. Over the same time, average brief value has grown from approximately $1,500 in 2010 to $10,800 in Q1 2013.

Today, more than 1,900 projects have been submitted with a combined brief value of over $25 million. These have come from the US, UK, Europe, Africa and Asia with over 26,000 expert service providers on eight exchanges responding to them.