Lender Beforepay readies for IPO as prospectus released News22 Nov 2021

Beforepay’s prospectus papers have landed, as one of the most widely anticipated initial public offerings prepares for its January 17 debut.

 

The lender will join a throng of fintech and buy now, pay later players when it hits the Australian Stock Exchange.

 

Beforepay, which touts its “Pay on Demand” lending offer, is set to raise $35m through the issue of 10.3 million shares at $3.41 per share.

 

The listing, which values Beforepay at an indicative market capitalisation of $158.4m, will see the lender bulk up its bank balance to put the funds to further growing its loan book both in Australia and overseas.

 

No general public offer of shares will be made under the listing.

 

Beforepay chief executive Jamie Twiss was tight-lipped about the book build, but noted it was “fairly diversified” with strong demand from investors.

 

“We’ve been very, very pleased with the IPO, we feel confident about the demand of the market,” he said.

 

“We feel confident about where the number ended up.”

 

Mr Twiss said Beforepay was yet to decide how it would mark the market listing.

 

“I’ll be very candid with you, I haven’t thought about how we handle the day itself,” he said.

 

Mr Twiss said Beforepay’s small team, of 31 people, meant although the company intended to expand in the wake of its listing any potential growth wouldn’t be crimped by closed borders.

 

“We haven’t been hiring at the scale where closed borders have been a significant impediment to us,” he said.

 

The prospectus, lodged with the ASX, now also goes to the Australian Securities and Investments Commission for their review, with a response due in the next one to two weeks.

 

Beforepay makes its money by charging a fixed 5 per cent fee on cash lent to customers.

 

The company has now lent $170.5m to more than 125,000 customers, growing rapidly after launching last year.

 

A key element for the business will be growing its customer base and also limits lent.

 

The more a customer borrows over time the more confident Beforepay is in growing its lending limits.

 

“Existing customers have historically been very consistent in taking further Cash Outs,” Beforepay said in its prospectus.

 

“A core element of customer retention is continuing to increase available Cash Out limits.”

 

The company is a member of the Australian Financial Complaints Authority, with one complaint recorded against it in the past year.

 

Beforepay chairman Brian Hartzer said the company’s model created a strong value proposition.

 

“The high-quality management team has already achieved significant scale and excellent momentum in unit economics,” he said.

 

Article source: The Australian, 22 November 2021

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