Podcast app Audioboom faces collapse

Headphones
Audioboom has over 80m users Credit: Getty Images

Audioboom, the British podcasting app funded by the property developer Nick Candy, faces collapse within weeks after failing to secure the funds for a proposed purchase of a US rival.

The Aim-listed company called off the £134m reverse takeover of Triton Digital yesterday after admitting that it had not been able to complete a planned share placing.

As a result it said that the company may ultimately be wound up if it does not raise new cash, which it said it would need “as soon as possible”.

It said a £1m convertible loan from Mr Candy made at the end of last month would only be sufficient to keep the company afloat for another four weeks, and that it must now pay a break fee to Triton consisting of £90,000 in cash and a significant allotment of shares.

Audioboom, founded in 2009, is an on-demand app that allows the likes of the BBC to host podcasts, adding advertising into the audio to fund their creation.

Booming demand for podcasts saw user numbers reach 82m in February, up 40pc year-on-year, as well as a leap in revenues. The company has also put money into exclusive material in a move it has hoped will improve profit margins.

However, it has struggled to overcome its losses and has consistently returned to investors to raise more money.

In February, it suspended share trading after announcing the deal for its larger US rival as it attempted to drum up demand for the £155m placing it expected to use to fund the deal. Last month it secured a £1m loan from Mr Candy, one of the biggest investors in the company with a 13pc voting share, but said on Tuesday that the money would only take it so far.

“In spite of significant demand, it has not been possible to complete the placing,” it said on Tuesday. “The company's financial position remains uncertain pending the successful completion of the further equity funding.

“If sufficient further equity funding is not available in the required time horizon then, in the absence of alternative funding options, the board considers that it would likely need to take actions to protect the interest of creditors, which may result in the ultimate winding up of the company.”

The company has also reversed plans to change its name or replace its chief executive Rob Proctor, and said trading would remain suspended as it assesses the appetite for the proposed placing.

License this content