• KPMG says there’s been consolidation and M&A activity among fintechs following tougher economic conditions
  • MoneyMe reports $6 million statutory NPAT for H1 FY24 with loan origination up 23% on prior half
  • Harmoney Corporation records fourth consecutive half of positive cash NPAT and 21% revenue growth on pcp

KPMG partner, M&A and head of fintech Daniel Teper says the global and Australian fintech sector has experienced greater M&A activity and consolidation following economic conditions which have not been favourable to growth stocks in recent years.

While the sector experienced rapid growth in the later years of last decade leading into the start of the early 2020s higher interest rates to combat soaring inflation took a toll on fintechs battling higher funding costs and greater credit risk.

Share prices for many fintechs listed during the golden days for the sector tumbled as they had to rethink their growth plans amidst gloomier investor sentiment and higher costs.

Despite the challenges, there are positive aspects with many fintechs actively minimising expenses and constructing sustainable growth strategies, ensuring their viability in the long term.

READ: What KPMG reckons about fintechs in 2024 and ASX players to watch – Part One

Here’s part two of our special on fintechs which have caught the eye of investors lately.



Powered by smart-tech, the digital lender offers near real-time credit decisioning and loans that settle in minutes across products such as car loans, personal loans and credit cards.

In its H1 FY24 results delivered on Wednesday, MME announced statutory NPAT of $6 million, which it says reflects strong credit performance, effective interest rate management and tech-driven cost efficiencies.

Loan originations increased to $277 million, up 23% on H2 FY23, facilitating the company’s further shift to high credit quality assets. The total loan book balance was $1.2 billion for H1 FY24.

Throughout H1 FY24, MME persisted continued its focus on improving the credit profile of its loan book by concentrating on attracting borrowers with a higher credit quality and increasing the proportion of secured assets.

The average Equifax score for MME’s loan book reached 741 in H1 FY24, marking an increase from 727 in the preceding half, while secured loan assets increased to 48% of the book from 44% in H2 FY23.

MME’s strategy led to a notable decrease in net credit losses to 4.6% in H1 FY24, offering investors added assurance in the face of difficult market conditions for lenders.

The company says the ongoing uplift in the customer credit profile will provide significant benefits over time. Furthermore,  strong customer diversification continues to reduce risk and promote resilience with the median age of MME customers 35 with geographical spread mainly across the larger eastern states.

Managing director and CEO Clayton Howes told Stockhead MME is currently optimising for future growth and is seeing interest from two key investor groups – debt capital market (DCM) and equity capital market (ECM) investors.

“When it comes to DCMs, they seek fintech lenders with term securitisation and wholesale funding structures to secure solid returns with low-risk exposure,” he says.

Howe says the current low Aussie dollar also makes Australia an attractive market for international DCMs.

“Whether local or global, DCMs show particular interest in Australian car loans, especially as non-bank lenders have the opportunity to gain market share with major banks exiting the sector,” he says.

“The appeal lies in ongoing securitisation deals rather than one-offs, with MONEYME’s scale and growth prospects catching their eye.

“ECMs with interest in fintech lenders, mostly domestic fund managers and private wealth investors, typically have a deep understanding of our sector and are particularly drawn to profitable businesses.”

Howe says as the interest rate cycle peaks, fintech lenders become attractive investment avenues, especially given current market valuations.

“Businesses like MoneyMe with scale, access to efficient debt capital, lowering costs, and profit building  offer promising returns on equity.

“Our variable rate book enables us to effectively manage interest rates in an upward cycle, while also creating an advantage for competitive pricing when rates decline.”


Harmoney Corp (ASX:HMY)

HMY operates as a direct-to-consumer digital personal lender in Australia and New Zealand, providing quick unsecured personal loans.

Central to HMY’s operations is its proprietary digital lending platform, Stellare, which handles the processing, authorisation, and financing of the majority of loan requests within a day.

HMY recently released strong H1 FY24 results including its fourth consecutive half of positive cash NPAT. In H1 FY24 NPAT profitability was $500k with loan book growth of 8% on pcp to $756 million.

The company says key drivers include ongoing improvements in customer acquisition costs and the operating cost-to-income ratio.

Other highlights for H1 FY24 included a 21% revenue growth to $60 million compared to pcp, driven by an average interest rate of 16.1%.

The group loan book expanded to $756 million, marking an 8% increase. Risk-adjusted income stood at 5%, and acquisition costs decreased by 17%.

HMY’s high-quality loan portfolio consists of 74% of customers employed in professional, office, or trades, with 87% aged over 30.

The company noted that existing customers consistently return for their financial needs, contributing to a reduced customer acquisition cost.

HMY says it has consistently good feedback, with a rating of 4.8 out of 5.0 (Google & Shopper Approved) from more than 55,000 surveyed customers.

CEO and managing director David Stevens told Stockhead despite a challenging economic environment, HMY has successfully provided attractive customer solutions through active management of interest rates within the consumer-direct model.

“Harmoney has navigated the current economic environment by always targeting a 9-10% net interest margin across all cycles and we have the ability to easily move interest rates to reflect market movements due to our 100% consumer direct (or B2C) model,” he says.

“We are set up for high growth with the release of our new Stellare 2.0 platform, in addition having just refinanced our corporate debt and increased the limit by 50% to seed over $200m in loan book growth.

Stevens says the fintech hasn’t  had to make significant changes to its business model due to the higher interest rate environment, “other than increase our lending rates to customers in line with the increase in costs we have paid for our funding”.

He says fortunately HMY is well funded with funding provided by three of the big four banks plus securitisation programs in Australia and New Zealand.

“The personal loan product we offer in its simplest form has been around in Australia and New Zealand for decades, some newer business models that established themselves in a low interest rate environment have failed due to their model being reliant on obtaining a low cost of funds and charging the consumer fees.

“We feel our product and business model is highly efficient achieving a 24% cost to income ratio and has now proven its resilience throughout one of the most aggressive interest rate hiking cycles in our regions history.

“The strength our business today has given us confidence to state publicly that we are targeting a 20% cash return on equity run rate in FY25.”


Beforepay Group (ASX:B4P)

Listing on the ASX in January 2022 B4P provides consumers with a means to oversee their personal finances, granting them the flexibility to access their pay earlier without resorting to credit cards or other forms of revolving debt.

The fintech offers individuals small amounts of money over brief periods, aiding them in overcoming short-term challenges without exceeding their financial capabilities.

B4P recently announced it had delivered its first half-year profit in H1 FY24. Audited H1 FY24 net profit before tax (NPBT) was $2.2 million, while unaudited earnings before interest, tax, depreciation, amortisation (EBITDA) was $4.2 million.

Further financial hightlights for H1 FY24 include:

  • Advances of $358.6 million, up 18%  year-on-year (YoY)
  • Net defaults improved to 1.3%, down by almost half in H1 FY23
  • Revenue increased by 21% YoY to $17.6 million
  • Net transaction margin (NTM) of $10.1 million, up 99% YoY from $5.1 million in H1 FY24, driven by growth in advance volume and the lower level of defaults
  • Customer acquisition cost (CAC) of new users dropped 48% YoY to $31
  • Operating expenses (marketing and overheads) were down 27% YoY on H1 FY23, to $7.7 million
  • Unrestricted cash on hand of $18.9 million and an equity position of $29.7 million
  • No debt at the operating-company level, only debt to finance receivables

B4P plans to introduce a new business line, offering its lending technology and AI-powered risk models to partners, including offshore banks.

The company also aims to launch new lending products with higher limits and longer durations. B4P says it has secured a new $55 million, three-year receivables debt facility with Balmain Group and Longreach Credit Investors supports the expansion of its loan book.

B4P received recognition as the Ethical Lender of the Year 2023 by Wealth and Finance International and the Best App-Based Lending Company 2023 – Australia in the APAC Business Awards 2023.


The MME, HMY &B4P share price today:


At Stockhead, we tell it like it is. While MoneyMe is a Stockhead advertiser, the company did not sponsor this article.