Popular electric scooter company Vmoto (ASX:VMT) has raised $9.6m of fresh capital from three investment funds, Perennial Value Management, Regal and IFM, and from existing and sophisticated investors.

Vmoto will use the new funding for further expansion of its line of high-performance electric scooters, sales of which are taking off around the world.

The company’s electric scooters are seen as an adaptable and flexible mode of transport for the post-carbon age, with advantages over petrol and diesel-driven competitor models.

Vmoto’s scooters are garnering interest from home delivery firms and among commuters switching from public transport, both growth sectors arising from the COVID-19 pandemic.

The ride-share sector is another growing market for Vmoto with seven operators including Go Sharing in the Netherlands among its customers, and the company is in talks with another 12 ride-sharing companies for deliveries of its electric scooters.

Vmoto sales take off

“Recent operational and commercial successes during the current global pandemic highlight that the company has reached an inflection point in its growth,” Vmoto managing director Charles Chen said.

“As a result of the placement and the additional capital raised, Vmoto is now in an even stronger position for all its shareholders, and very well placed to accelerate its growth and expand its strategy to drive long-term value for investors,” Chen added.

Vmoto has three brands in its product line; Vmoto is for the Asia market, E-Max is a premium product for business-to-business clients, and Super Soco is for business-to-consumer markets.

Support from strategic investors

Perennial Value Management is the cornerstone investor in the $9.6m share placement at an issue price of 45c for 21.4 million shares. The new shares begin trading on August 19.

The issue price represents a 7.4 per cent discount to Vmoto’s volume-weighted average price in the 10 days leading up to August 10.

Proceeds from the share issue will be used to accelerate Vmoto sales in growing market segments including business-to-consumer, business-to-business and existing and new overseas markets.

Seeing the company’s growth potential, several strategic investment funds approached Vmoto with offers to raise additional funds that would strengthen its balance sheet.

Andrew Smith, head of smaller companies and micro caps at Perennial Value Management, said: “We have been monitoring the progress of Vmoto for several years and have seen the company deliver consistent growth in sales.”

Smith stated there was an increasing consumer trend for lower cost and convenient transport via two-wheel electric vehicles which COVID-19 has accelerated, as Vmoto’s latest quarterly sales show.

Vmoto sold a record 6,389 electric scooters in the June-ended quarter, up 55 per cent on Q1 2020, and the company has orders to deliver another 6,353 scooters.

The share placement also received strong support from institutions, and other sophisticated investors including existing Vmoto shareholders.

Earlier fundraising oversubscribed

Back in April, Vmoto announced a $1m capital raise via a share purchase plan, to provide it with a financial buffer amid the height of uncertainty caused by the COVID-19 health crisis.

The share purchase plan was heavily-oversubscribed, attracting $4m of capital – four times its initial target.

The successful raise leaves Vmoto with surplus cash reserves, as it targets key distribution channels for its market-proven fleet of two-wheeled electric scooter models.

Vmoto remains focused on expanding sales through both business-to-consumer (B2C) and business-to-business (B2B) channels, with a focus on the European market.

The company has a state-of-the-art manufacturing plant in Nanjing, China, and has distributors in locations including, Asia, Europe, North and South America, and South Africa.

Vmoto (ASX:VMT) share price chart