After posting a drop of 36% in the revenue of the first quarter of 2023, NAGA Group, the German-based fintech company that operates the neo-broker, NAGA, is now seeking to raise $8.2 million from a convertible bond offering. The offering excludes the statutory subscription rights of the Frankfurt Stock Exchange-listed company’s shareholders.

NAGA Seeks New Funding

The company, which also operates the neo-banking app NAGA Pay and cryptocurrency platform NAGAX, announced the new move on Saturday. According to a statement, the decision was reached by the company’s Management Board and is subject to the approval of the Supervisory Board.

Sharing details on the new offering, NAGA explained that the convertible bond will be offered with a coupon of 11% and a maturity of six months between April 28 to October 30, 2023. It added that the conversion price has been pegged at $1.97.

“Conversion is possible at any time during the term. Upon full conversion, the share capital will increase by EUR 4,162,436, which corresponds to approximately 7.7% of the current share capital,” NAGA noted, adding that it has already received a subscription commitment from an unnamed 'major investor'.

NAGA's new funding plans come three months after the Hamburg-based fintech firm said it was discussing possible merger with an unnamed “multi-country brokerage firm.” Benjamin Bilski, the Founder and CEO of NAGA Group, has also previously said the company was keeping its eyes open for opportunities to strengthen its capital base “given the fact that we incurred significant losses last year.”

NAGA’s Revenue Drops in Q1 2023

Although NAGA reported profitability for the first few weeks of 2023 in early February, by the end of the first quarter in March, the fintech company’s revenue slumped 36% year-over-year to EUR 11.6 million. In addition, the company generated total trades worth EUR 37 billion during the period.

Furthermore, during the first quarter of 2023, NAGA’s earnings before interest, taxes, depreciation and amortization (EBITDA) collapsed by nearly 200% from EUR 5 million in Q1 2022 to EUR 1.7 million at the end of March. The drop in quarterly revenue came despite a jump of 30% in active traders on its platforms.

Additionally, Finance Magnates reports that while NAGA Group is yet to release its annual report for the fiscal year 2022, key numbers on the company’s group website show that the firm generated an estimated revenue of €52 million in 2022. Therefore, the company's revenue dipped 6% year-over-year from the €55.3 million generated during the prior fiscal year.