Appen, an Australian AI firm, announced on Tuesday that it is considering selling part of or all of its business. The company has not yet received any proposals for a deal, but is open to engaging with potential counterparties. Despite financial challenges, Appen remains open to exploring potential deals and is in a position to engage with potential buyers.
In an effort to increase its working capital, Appen announced an equity raise of A$30 million ($19.52 million) and implemented an additional $14 million of cost reductions, bringing its total cost-saving initiatives for the year to $60 million. The company’s revenue and gross profit for the 10 months ending Oct. 31, 2023 fell by over 29% and 32% respectively to $223 million and $80 million respectively.
Appen’s executive team underwent a complete turnover over the past two years as the company undertook a number of cost-saving initiatives in order to improve its financial position. However, despite these efforts, the company continues to face financial challenges. It is unclear what specific factors are driving these challenges at this time.
The decision to consider a sale comes as many companies in the tech industry are facing economic pressures due to global market conditions and rising costs. Some experts predict that we may see more mergers and acquisitions activity in the coming months as companies seek ways to strengthen their balance sheets and improve their financial performance.