IPO Watch: Second time’s a charm for Prospa, while another Afterpay competitor eyes the ASX boards
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Small business lending platform Prospa (ASX: PGL) was off to the races when it hit the ASX boards yesterday.
It was a case of success on the second attempt for the fintech that pulled its float 15 seconds before listing last June amid regulatory uncertainty.
PGL shares closed at $4.47, a gain of around 19 per cent from the initial listing price of $3.78.
With its listing, Prospa raised $110 million from investors and the day-one closing price gives it a market capitalisation of more than $700m.
The company prospectus forecasts double-digit total revenue growth to $136m for the 2019 financial year, resulting in an expected net loss after tax of $1.5m.
In comments made to Stockhead, Prospa CEO Beau Bertoli called the listing an “important milestone”.
“There are 2.3 million small businesses in Australia and more than 30 per cent say they have missed business opportunities because they couldn’t access finance,” he said.
“Our mission is to keep small business moving. We’re excited about our access to growth capital allowing us to better serve more of this market and deliver more value to these customers.”
Prospa was co-founded by Bertoli and Greg Moshal in 2012 with seed funding from Entree Capital, and wrote its first loan for $20,000. Earlier this year the company passed the $1 billion mark in total loan originations.
Post-listing, Entree remains the largest shareholder in Prospa with a 33.8 per cent stake.
Moshal told Stockhead that the ASX listing provides the company the “capital and flexibility” to meet its growth targets.
“Small businesses are the engine room of the economy and they’ve long been underserved by the traditional banking system,” he said.
“The capital we’ve raised via the IPO will allow us to deliver more value to our small business customers and further invest in our brand, our new products and to support our growth in New Zealand.”
Of the $110m raised, around $50m of it was comprised of early investors who took the opportunity to exit and sell down their stakes.
Elsewhere, the team at Cyan Investment Management highlighted a couple of other IPOs taking shape on the horizon.
Flexible workplace platform Victory Offices is eyeing off a public listing, after gaining traction in the local market with various product offerings including day-offices and co-working spaces.
The company is forecasting a net profit after tax on $10m on $45m in revenues — a profit margin of more than 20 per cent.
“The thematic for flexible workspace locations is strong with a surprising number of government and large enterprise clients opting for the flexibility of shorter-term tenancies,” Cyan said.
Victory Offices is raising $30m at a post-money market cap of $82m, with plans increase the number of operating sites to 27 over the next 12 months.
And Quickfee — a payments platform used by accounting and law firms — also continues to circle the ASX boards.
The company’s core product is an an online portal which allows customers to pay when and how they want, reducing the lag times on late payments. It’s looking to raise $14m at a post-market valuation of $28m
While Quickfee isn’t yet profitable, Cyan said it had a scalable business model which “could be very successful over the longer term”.
And lastly, one of the newest competitors in the red-hot buy now, pay later sector is also drumming up investor support ahead of a possible July listing.
The Sezzle payments platform competes directly with Afterpay in the US market and also just launched operations in Canada.
The AFR reported that Sezzle is looking to raise $42.9 million in a deal valued at $1.20 per share, giving it an indicative market capitalisation of $213.3m.
Broker Ord Minnett is looking to lock in investor support for the raise by June 21, ahead of a scheduled listing date of July 23.
Here’s a list of companies that are scheduled to list in the coming weeks (data compiled from the ASX website):
|IXC||Invex Therapeutics Ltd||4-Jul-19|
|NXR||Nemex Resources Limited||24-Jul-19|
|PBH||Pointsbet Holdings Limited||12-Jun-19|
|RF1||Regal Investment Fund||17-Jun-19|
|TMG||Trigg Mining Ltd||28-Jun-19|
|VGI||VGI Partners Limited||21-Jun-19|
|VOL||Victory Offices Limited||14-Jun-19|