MoneyMe inks $50m funding deal with Pacific Equity Partners, on track to meet accelerated demand
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The deal will allow MME to execute on further growth in its loan book while keeping its cost of funding low.
Fintech lender MoneyMe (ASX:MME) has executed on a strategic funding deal with leading private equity firm Pacific Equity Partners, as it continues to pursue turbocharged growth across its key markets.
The deal will see PEP make an initial commitment of $50m, through a hybrid funding instrument over a four-year term.
The funding comes at an important time for the business, as MoneyMe builds out its capital structure to capitalise on rapid lending growth across all of its key verticals.
And it marks another example of the MME management team’s ability to attract backing from major funders, following the $108m expansion (to $338m) of its wholesale funding facility in July.
Following the announcement, investors sent MME shares another 5% higher in morning trade to $2.17.
The extra funds will leave MoneyMe well placed to meet the demands of its growing loan book, particularly for the rapid growth in its recently-launched vehicle finance platform, Autopay.
While top-line loan originations continue to accelerate, MME’s funding platform gives it the base to drive margin growth by keeping its cost of funds low.
The deal with PEP represents a material expansion to MoneyMe’s existing warehouse facility, which already allows the company to maintain a cost-of-funds ratio of below 5%.
MME will also use some of the new funding to repay its $22m secured note facility.
Commenting on the deal, MoneyMe CEO Clayton Howes said it will be “instrumental” as loan growth accelerates.
“Being able to access efficient debt capital, with a leading Australian investment firm with over A$7bn in funds under management and more than 20 years of operating success, creates immense value” Howes said.
The $50m syndicated funding facility (SFF) has been structured with warrants to align returns between the lender and shareholder.
Under the terms of the deal, PEP will be eligible for an additional 4.5% coupon if MME’s share price increases by at least 45% from the date the SFA commences.
PEP can also choose to settle the warrants through the issuance of new MoneyMe shares, up to a maximum of 5m shares.
PEP managing director Jake Hains said the group was impressed with the growth of MME’s business so far, and looks forward to working with the company to achieve further returns.
“We see MoneyMe as a leading platform within the consumer lending space with great people, technology and products and a relentless drive to provide excellent service and innovative solutions to its customers,” Haines said.
This article was developed in collaboration with MoneyMe, 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.