Out of the ballpark: Zebit beats full year prospectus forecasts
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Zebit posts revenue of $US87.7 million, 6.7% ahead of prospectus forecast
Zebit Inc. (ASX:ZBT), a US-based ecommerce platform with a built-in buy now, pay later offering, has beaten its full-year prospectus forecasts after delivering a 2.6% increase in net profit to $US87.7 million for 2020.
Net sales surged 35.2% to $US44.8 million for the fourth quarter of last year with sales for December up 55.4% as the company saw a huge boost from lockdown spending in the US.
Almost 80% of revenue generated in FY20 was from repeat business with the average monthly spend of $US410 9.3% higher than forecast in the company’s prospectus.
CEO Marc Schneider said the results indicated just how valuable Zebit’s platform is to its customer base.
“We went to investors for our IPO in 2020 with a clear, differentiated investment thesis to support our mission of social change – a massive untapped market of 120m credit deprived consumers, recurring high growth, a differentiated e-commerce operating model based on cutting edge technology to identify and control credit risk and a management team who know how to scale a business in the most economic manner possible,” he said.
“This result vindicates our investors’ confidence in Zebit and we thank them for their support.”
Zebit benefited from the knock-on effects of the COVID-19 pandemic which saw Americans spend more time shopping from home.
The e-commerce platform provides buy now, pay later instalment plans that charge no interest or fees to its customers. That’s funded by the margins it makes on the 90,000 products it sells which range from electronics and home appliances to beauty and decor.
The company focuses on the huge proportion of the US population (roughly 100 million people) that is considered to be “credit challenged”.
Schneider said access to affordable credit for this demographic is extremely limited.
“They wouldn’t qualify for credit cards or even for regular BNPL platforms like AfterPay and Klarna,” he said.
“We call ourselves ‘the Amazon for the under-served’ and we’re finding our service is increasingly in demand.”
The basis of Zebit’s offering is an incredibly sophisticated algorithm that analyses potential customers and their likelihood of paying up.
Schneider said the tech puts them years ahead of their competition.
“It’s taken five years to refine this algorithm,” he said.
“We reckon it would cost around $US30 million and years to replicate and even then, any newcomer would still be learning.”
Zebit recently announced an increase to $US35 million in its lending facility with Bastion Consumer Funding, a private investment firm that provides credit solutions to emerging financial technology businesses.
Zebit’s chief financial officer Steve Lapin said this will allow them to continue scaling rapidly.
“We are eager to continue to scale our business and partnership with Bastion. The increased facility size strengthens our balance sheet further and we expect it will support the company’s growth beyond 2021,” said Lapin.
Zebit debuted on the ASX in October last year. In early January its shares jumped 10% off the back of its Q4 sales announcement boasting a 35.2 increase.
This article was developed in collaboration with Zebit, 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.