ETF News

Swedish telco Rebtel seeks $20 mln cash injection for growth

STOCKHOLM, April 7 (Reuters) - International calling service provider Rebtel wants to raise about $20 million in financing this year to accelerate growth, its chief executive said.

Sweden-based Rebtel, whose competitors include Skype and WhatsApp, generated about $80 million in sales in 2016, mainly handling calls made by U.S. and European customers to emerging markets. Sales were about $75 million in 2015.

Chief Executive Magnus Larsson told Reuters sales had rebounded at the end of 2016 and could grow 20 percent a year in the next few years without a cash injection or could double on an annual base with new funds.

“The only thing we lack for even faster growth is more capital. We are therefore looking at new financing of around $20 million in 2017,” he said, adding he was talking to investors.

“With the right kind of financing I think we can grow by 100 percent per year,” he said, adding profits could initially slip with the expansion plans that would focus on the U.S. market.

As well as competing with Voice over Internet (VoIP) players such as Skype and WhatsApp, privately owned Rebtel vies with mobile operators such as Britain-based Lycamobile.

Rebtel saw turnover tumble in 2014, prompting a shake-up of its business in 2015 when it shifted to an app-based system for calls from a web-based solution and hired new management. In 2016, it launched a programme in which independent contractors were paid to help find new customers.

The fragmented market for international voice calls was worth about $90 billion in 2016, according to research and consulting firm TeleGeography.

Larsson said the firm had no immediate plans for a stock market listing.

Reporting by Olof Swahnberg; Editing by Anna Ringstrom and Edmund Blair