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It will also raise an additional US$4.15 million from Catcha Group and another shareholder

Exactly a week after Catcha Group‘s online classifieds portal Frontier Digital Ventures’s US$22.9 million fundraising, its online automotive portal has struck gold.

iCar Asia has raised AUD 17.5 million (US$13.2 million) through an underwritten placement of 54,687,500 of ordinary shares at an issue price of AUD 0.32 (US$0.24)  per share — lower than its closing price of AUD 0.35 (US$0.26) on August 30 — to institutional and sophisticated investors.

An underwritten placement is a process where investment bankers — who act as underwriters — raise capital on the behalf of investors for corporations or government issuing equity or debt securities. The lead underwriter in this case was Bell Potter Securities Limited.

The newly-raised capital will be used to invest in new products and technology, ramp up marketing efforts, enhance employees’ skill sets and expand into new markets.

Catcha Group, who owns 28.55 per cent of iCar Asia’s shares, has also agreed to commit AUD 5 million (US$3.77 million) within two months, on the same terms of the placement and subject to shareholder approval.

In addition, iCar Asia’s non-executive director Syed Khalil Syed Ibrahim, who is also managing director of automotive dealership Sisma Auto, will commit AUD 0.5 million (US$378,000), also on the same placement terms and subject to shareholder approval.

As of June 30, 2016, iCar Asia currently has AUD 13 million (US$9.8 million) on hand.

With the announcement, trading half of iCar Asia’s shares will now be lifted. Placement shares are expected to be issued on September 7, 2016.

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