Catenai (LSE:CTAI), a small London-listed tech company, has raised £750,000 and plans to invest most of it into a new artificial intelligence venture.
The company said on Thursday it would use £500,000 to take a stake in Alludium, a start-up that is building software for automating business processes using what it calls “multi-agent” AI, software systems made up of multiple specialised bots working together.
The deal values Alludium at just over £5mn. Catenai said it could invest a further £450,000 if additional funds become available, though this second phase is not guaranteed.
Catenai said Alludium is still pre-revenue and has not yet filed accounts. The platform is expected to launch commercially later this year, with a preview due alongside a tech event in San Francisco in May.
If both investments go ahead as planned, and assuming no new shares are issued by Alludium in the meantime, Catenai would own around 13% of the company.
It will also receive bonus shares worth 10% of its investment and issue share options (or warrants) to Alludium’s founders, allowing them to buy up to 100mn Catenai shares at 0.3p each, if Alludium launches commercially.
To fund the deal, Catenai sold 500mn new shares at 0.15p each, a 21% discount to the last closing price, in a placing that included £150,000 from major shareholder Sanderson Capital Partners.
Catenai also paid £45,000 worth of directors’ unpaid salaries in shares and awarded up to 90 million new share options to two senior executives.
Because the placing price was below the legal minimum share value, shareholders will be asked to approve a reorganisation of the company’s capital structure at its annual meeting in May.
Interim chief executive John Farthing said: “We are thrilled to make our initial investment in Alludium, a company in the AI space. We are excited about the incredible potential that the board believe Alludium presents.”
Catenai said it remains focused on managing cash tightly. Farthing has been working on a reduced salary, while chair Brian Thompson has not taken a salary for over a year.
Shares in Catenai are expected to resume trading after the annual meeting.