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The company’s founder Micheal Kelly said the new equity strengthens its financial position and demonstrates strong support from its backers.
Irish insurance software company Fineos has raised $40m to strengthen its balance sheet and provide general working capital.
The funding raise comprises a fully underwritten $35m institutional placement and a $5m “conditional placement” from Fineos founder and CEO Michael Kelly. The $5m placement is subject to securityholder approval being obtained at the company’s AGM at the end of the year.
Fineos was founded in 1993 by Kelly and develops software systems for life, accident and health insurance carriers. The company has more than 50 customers globally, including Aviva, APL, Amica, FBD and New Ireland.
In 2019, Fineos became listed on the Australian securities exchange through an initial public offering. The company grew steadily in the following years, reaching revenues of €108.3m by June 2021. Fineos’ total revenue in the fiscal year ended June 30, 2022 was €127.2m, while the employee headcount was 1,075.
Acquisitions have been central to this expansion. Fineos purchased Limelight Health in August 2020 for $75m. Limelight Health creates products for streamlining and automating sales and underwriting functions for group benefits insurers.
This was followed in 2021 by the acquisition of Spraoi, a provider of machine learning capabilities for the group life and employee benefits industry.
The latest batch of funding will be used to continue Fineos’ growth plans and to maintain flexibility for timing of cash flows. Kelly said the company is pleased with the equity raising result and called it a “clear testament to Fineos’ ability to deliver our focused strategy”.
“The placement proceeds significantly strengthens our capital position and provides Fineos with the financial flexibility to deliver on our growth strategy,” Kelly said. “We thank our security holders for their strong support of Fineos.”
In 2021, the fintech company raised €44m by means of an institutional placing in Sydney. This funding was used to provide working capital to support R&D and growth opportunities.
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