Roadzen Inc. Announces Closing of Public Offering

Rhea-AI Summary

Roadzen Inc. (NASDAQ: RDZN) has completed its previously announced underwritten public offering, selling 2,300,000 ordinary shares at $1.25 per share, including 300,000 shares from the full exercise of the underwriter's option. The offering raised gross proceeds of $2,875,000 before deducting costs and commissions.

The company plans to use the net proceeds for sales and marketing costs, research and development, working capital, and general corporate purposes, including personnel costs and public company operating expenses. A portion may be used to repay outstanding debt. ThinkEquity served as the sole book-running manager for the offering, which was conducted under a shelf registration statement filed with the SEC.

Positive

• Full exercise of underwriter's option indicating strong demand
• Strengthening balance sheet with $2.87M in gross proceeds
• Clear allocation of funds for growth initiatives and R&D

Negative

• Potential shareholder dilution from 2.3M new shares
• Low offering price at $1.25 per share
• Need for additional capital suggesting cash constraints

Insights

Financial Analyst

This $2.875M public offering at $1.25 per share represents a significant dilutive event for Roadzen, considering its market cap of approximately $82.8M. The offering price shows a notable discount to recent trading levels, indicating challenging market conditions for capital raising. The exercise of the full overallotment option suggests decent demand, though the small size and pricing suggest some limitations in the company's ability to raise capital on favorable terms.

The intended use of proceeds for sales, marketing, R&D and working capital is standard, but the mention of potential debt repayment signals some balance sheet pressure. For a company focused on AI in insurance and mobility, the relatively modest raise may limit the scope of technological advancement and market expansion capabilities. The dilution impact and pricing pressure could weigh on near-term stock performance despite the additional operating runway provided by the fresh capital.

Legal Expert

The offering's execution through a shelf registration statement on Form S-3 demonstrates proper regulatory compliance and efficient access to capital markets. The inclusion of pre-funded warrants provides flexibility in the offering structure while maintaining regulatory requirements. The full exercise of the underwriter's option and ThinkEquity's role as sole book-runner suggests a streamlined but relatively small-scale offering process.

The explicit disclaimers and clear documentation of intended use of proceeds align with SEC requirements and provide necessary transparency to investors. The company's careful structuring of the offering through proper registration and disclosure channels mitigates regulatory risks, though the relatively quick turnaround from the November registration to December closing indicates an urgency to access capital markets.

NEW YORK, Dec. 17, 2024 (GLOBE NEWSWIRE) -- Roadzen Inc. (Nasdaq: RDZN), (“Roadzen” or the “Company”), a global leader in AI at the convergence of insurance and mobility, today announced the closing of its previously announced underwritten public offering of 2,300,000 ordinary shares (or pre-funded warrants (("Pre-funded Warrants")) in lieu thereof), including 300,000 shares sold upon full exercise of the underwriter’s option to purchase additional shares (the “Offering”) at a public offering price of $1.25 per share (inclusive of the Pre-Funded Warrant exercise price), for gross proceeds of $2,875,000, before deducting underwriting discounts, commissions and Offering expenses. All of the ordinary shares (and/or Pre-funded Warrants) were sold by the Company.

The Company intends to use the net proceeds from the Offering primarily for costs directly related to sales and marketing, for research and development, working capital and general corporate purposes, including personnel costs, capital expenditure and the costs of operating as a public company. The Company may also use a portion of the net proceeds to repay indebtedness outstanding.

ThinkEquity acted as sole book-running manager for the offering.

The Offering was made pursuant to a shelf registration statement on Form S-3 (File No. 333-282966), including a base prospectus, filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 1, 2024 and declared effective on November 12, 2024. The final prospectus supplement relating to the Offering was filed with the SEC on December 16, 2024 and is available on the SEC’s website at http://www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the Offering may be obtained from ThinkEquity, 17 State Street, 41^st Floor, New York, New York 10004.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Roadzen Inc.

Roadzen Inc. (Nasdaq: RDZN) is a global technology company transforming auto insurance using advanced artificial intelligence (AI). Thousands of clients, from the world’s leading insurers, carmakers, and fleets to dealerships and auto insurance agents, use Roadzen’s technology to build new products, sell insurance, process claims, and improve road safety. Roadzen’s pioneering work in telematics, generative AI, and computer vision has earned recognition as a top AI innovator by publications such as Forbes, Fortune, and Financial Express. Roadzen’s mission is to continue advancing AI research at the intersection of mobility and insurance, ushering in a world where accidents are prevented, premiums are fair, and claims are processed within minutes, not weeks. Headquartered in Burlingame, California, the Company has 360 employees across its global offices in the U.S., India, U.K. and France. To learn more, please visit www.roadzen.ai.

Cautionary Statement Regarding Forward Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” and “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, statements regarding the intended use of proceeds of the offering described above. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in “Risk Factors” in our SEC filings, including the annual report on Form 10-K we filed with the SEC on July 1, 2024, any subsequently filed quarterly reports and other documents we subsequently file with the SEC. We urge you to consider these factors, risks and uncertainties carefully in evaluating the forward-looking statements contained in this press release. All subsequent written or oral forward-looking statements attributable to our company or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this press release are made only as of the date of this release. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

For more information, please contact:

Investor Contacts: IR@roadzen.ai 

Media Contacts:
Roadzen: Sanya Soni sanya@roadzen.ai or media@roadzen.ai 
Gutenberg: roadzen@thegutenberg.com 

FAQ

How much did Roadzen (RDZN) raise in its December 2024 public offering?

Roadzen raised gross proceeds of $2,875,000 through the offering of 2,300,000 ordinary shares at $1.25 per share.

What is the purpose of Roadzen's (RDZN) December 2024 public offering?

The proceeds will be used for sales and marketing costs, R&D, working capital, general corporate purposes, and potentially repaying outstanding debt.

How many additional shares were sold through the underwriter's option in RDZN's offering?

The underwriter's option was fully exercised, resulting in an additional 300,000 shares being sold.

What was the price per share for Roadzen's (RDZN) December 2024 public offering?

The public offering price was $1.25 per share, including for pre-funded warrants.

Who was the book-running manager for RDZN's December 2024 public offering?

ThinkEquity acted as the sole book-running manager for the offering.