KRM22, an investment vehicle created to undertake a roll up of software companies providing risk management tools to the capital markets industry, has put a halt to a search for new funding citing the uncertainties surrounding Brexit.
Led by former former Ffastfill chairman Keith Todd, KRM22 is aiming to build a 'Global Risk Platform' by making investments in businesses that are experiencing and struggling against scale-up challenges.
The firm raised £10.3 million from a float on London's Alternative Investment Market in April last year and has undertaken a string of acquisitions to build an integrated suite of risk management and surveillance tools.
With £1.4 million of cash and term debt of £2.1 million as of 30 June, the group in September announced that its had begun talks with investors to fund the next stage of growth.
While the company has confirmed the receipt of R&D tax credits of £0.6m, it has now postponed its search for new investment until 2020.
In a statement, the group says: "Conversations with strategic investors continue to be productive however the Board has decided to defer concluding these discussions until 2020, when the market is expected to be more stable following the anticipated resolution of political uncertainties surrounding Brexit.
"The consequence of this is also that material acquisition or investment decisions have been put on hold until 2020. The Company will instead focus on driving further organic revenue growth and converting the near-term pipeline of opportunities, as well as carefully monitoring the cash position and the Company is still exploring funding opportunities."
With no new funding in sight, the firm says that it plans to reduce the scope of some of its activities in 2020 with a view to achieving £1 million in cost savings. The implications of this decision for staff have not been disclosed.
On the up side, the firm has reported three new signings and the renegotiation of one existing contract, resulting in an increase of annual recurring revenue of £4.3 million, representing 18% in organic growth.
Says Todd: "In the 18 months since we listed, we have built the foundations of a great business and are now seeing the start the contract flow from the extensive sales pipeline we have built and are successfully converting. We now have 15 applications available, addressing enterprise, regulatory, market and operations risk."