Special Report: The company now has a clear road map for growth across key south-east Asian markets.

Listed payments company IOUpay (ASX:IOU) is rounding out 2020 with some strong momentum after completing a strategic capital raise.

The company added $10m to its war chest via a share placement to sophisticated investors.

As part of the process, IOU’s executive team scaled back total investment bids in excess of $50m for an offer that was more than 5x oversubscribed.

The surge in demand is reflective of investor interest in the company’s regional positioning, where it can leverage a first-mover advantage in core markets across Malaysia and Indonesia.

The oversubscribed placement is also a vote of confidence in IOU’s new management team following a Q1 rollercoaster which saw the company install a new CEO, raise bridging capital and change its name (from iSentric).


Addressable market

Armed with a strong capital base, IOUpay is now focused on building commercial partnerships with its Malaysian clients, which include a suite of major banks and large corporates.

The company has already built data sharing arrangements with a number of financial services providers, as a platform to drive distribution for its payments services.

In its most recent corporate update and investor presentation IOUpay highlighted a key opportunity for the company lies in the addressable market for “under-banked” customers in Malaysia and Indonesia.

“In a region with large under-banked populations and a systemic lack of consumer credit, this demand side growth presents the company with significant supply side upside,” Malaysian CEO, KL Khong said.

In addition, “feedback from our corporate customers indicate strong consumer demand for BNPL services in Malaysia and Indonesia, which comes as no surprise given the limitations in local consumer credit and the general decline in credit card usage” he said.

IOUpay said accelerating the growth of its BNPL (buy now, pay later) platform will be a key target area in the deployment of its $10m capital raise.

The funds will be raised at a price of 16.0c each, which represents a 17.9 per cent discount to IOUpay’s last closing price.

The company is now perfectly positioned to drive growth into the South-East Asian market, following an eventful September quarter where it still booked over $1m in cash receipts from customers.

Looking ahead, IOUpay has now established a clear road map to build market share across its main verticals in mobile banking and digital payments.

“With extended COVID-19 movement restrictions raise online bill payments and ecommerce volumes even further, demand-driven economics present a positive outlook” for growth, the company said.

This article was developed in collaboration with IOUpay, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.