Credit Clear sees high demand for its payment collection services
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Fintech company Credit Clear (ASX:CCR) made a strong debut on the ASX Tuesday through an IPO with its share price jumping 31 per cent to 46c from an issue price of 35c.
The company’s IPO has raised $15m, giving it an initial market value of $79m on listing.
Credit Clear is a receivables management solutions provider, which means it works for business clients to collect unpaid money owed by their customers.
The company has seen a three-fold growth in business volumes over the past year to reach 2.6 million enquiries in the September quarter from 800,000 in the corresponding 2019 period.
For the 2020 financial year, Credit Clear has a pro-forma revenue of $11.2m and no debt.
COVID-19 has caused a build-up of outstanding receivables across many sectors, creating expectations of an impending surge of demand for debt recovery services, said the company.
Its chairman, Gerd Schenkel, is a former National Bank of Australia (ASX:NAB) executive and of Tyro Payments (ASX:TYR).
“Given the economic impact of COVID-19 on the economy, we feel the timing is right to grow the business by expanding our receivables technology platform,” said Schenkel.
“This will help our clients improve cash flow cost effectively, which is critical right now,” he said.
Chief executive Brenton Glaister is a founder of Credit Solutions, a debt recovery agency, that was acquired by Credit Clear last year.
Credit Clear has developed its own digital billing and communication technology platform for companies to manage their payment arrangements with customers.
Mobile and other interactive digital communication tools are also used by the company.
The company was funded by Australian technology investors including Ellerston Capital, Little Group and Regal who also participated in its IPO.
The company said its payments management systems achieve better customer engagement, faster payment reconciliations, and lower collection costs compared with traditional payment recovery methods.
Credit Clear manages more than 250,000 customer accounts across a range of sectors that include financial services, transport, utilities and government.
Its Melbourne head office along with offices in Sydney, Adelaide, Perth, Brisbane and Geelong have a total of 90 staff.
The acquisition of Credit Solutions expanded Credit Clear’s receivables management capacity, including a legal team, Oakbridge Lawyers.
Australia’s receivables management sector is a fragmented industry with nearly 600 different firms.