Prospa keeps ASX listing on table as loans hit $750 million
Fintech Prospa is keeping the option of a future ASX listing on the table after announcing it had beaten forecasts in its IPO prospectus by close to 10 per cent, with $367 million of new loan originations last year.
The small business lender announced it had beat forecasts in its IPO prospectus by close to 10 per cent, and has now loaned a total of $750 million.
Co-chief executive Beau Bertoli said Prospa's situation was "unique", because despite showing outperformance of its offer document, the company never actually listed on the stock exchange.
Prospa co-CEOs Beau Bertoli and Greg Moshal were a major consideration for Airtree. Prospa is the fund’s biggest investment so far.
Having another tilt at a listing is something that is still in the mix of possibilities along with private investment options, Mr Bertoli said.
"We're keeping our options open," he said.
Earlier this year Prospa put the brakes on the ASX listing at the very last minute, with the Australian Securities and Investments Commission (ASIC) writing to the company in the days prior requesting details on its loan terms.
Earlier this month it confirmed it had removed a number of clauses from its loan contracts after working with the regulator.
ASIC has been focused on ensuring alternative lenders don't fall foul of unfair contracts legislation when offering loans to small businesses, including not allowing fintechs to change the terms of the loan without notice.
Changes to Prospa's contracts included removing an "entire agreement" clause that absolved it from any responsibility for "conduct, statements or representations made to borrowers about the loan contract".
Mr Bertoli co-founded the small business-focused lender with Greg Moshal in 2011. The company lends up to $250,000 to smaller operators who apply online. In the years since its launch, a number of other fintech lenders have emerged targeting the small business market, including Moula and GetCapital.
Prospa has now loaned $750 million and is looking at future capital options.
"We have a lot of different choices now. We're in that fortunate position to evaluate both public and private options," Mr Bertoli said.
The company said even though the listing didn't get off the ground, potential unnamed private investors had emerged over the past few months, while the company and its financials were in the headlines.
"We’ve had a lot of inbound interest – and we are one of the fastest growing technology companies," Mr Bertoli said.
The lender has cracked the $100 million revenue mark and has lent to 15,000 small business borrowers.
Its last big capital injection was in February last year when it raised $25 million in a round led by AirTree Ventures, which is run by former Packer lieutenant Daniel Petre.
At that point, the fintech had hit the $250 million loan mark.
A recent launch into the New Zealand market saw $1 million in loans issued in the first month.
Beyond loans, the business wants to tap into other credit products, including a line of credit product "because our customers are looking for it", Mr Bertoli said.
This pilot program involves an ongoing agreement between a business and Prospa to draw down capital.
Mr Bertoli said it was a more "flexible" option for small businesses and while the product was still in trial phase, he said it would deliver on the "interim capital requirements" of smaller operators while also keeping their ability to repay front of mind.
The lender's prospectus outlined an expected default rate of between 4 and 6 per cent of overall loans, which management said had been on target for the past financial year.
The business said it was focused on Australia and New Zealand, rather than other global markets, saying the small business lending market in Australia is $20 billion.
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