Plans have reportedly been leaked for the fintech Beforepay IPO, suggesting that listing next year could give the company a market cap of $ 158.3 million.
Reports suggest that listing, slated for Jan. 17, 2022, will set the stock price at $ 3.41 and raise around $ 35 million for the three-year startup.
The IPO offering is expected to open on November 30 and continue until December 30.
While a spokesperson for Beforepay confirmed that the startup is indeed preparing for an IPO and will issue a prospectus soon, they said those numbers were speculation. The spokesperson was unable to confirm further details on the upcoming listing.
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Founded in 2019 by Tarek Ayoub, Beforepay applies a Buy It Now, Pay Later (BNPL) model to wages, giving users up to $ 200 upfront before payday.
The app syncs with users’ bank accounts. Thus, when their salary arrives, the advance is automatically reimbursed, plus a fixed fee of 5%.
In May 2021, Beforepay appointed Jamie Twiss, former chief strategy officer and chief data officer at Westpac, as the new chief executive.
The following July Brian Hartzer, former head of Westpac and ANZ and a former senior executive at the Royal Bank of Scotland, joined the presidency.
How fast is Beforepay growing?
Beforepay launched in January 2020 and, according to Ayoub, has racked up some 20,000 new users in a matter of weeks.
The following November, the startup raised $ 4 million in a funding round led by James Spenceley, president of Airtasker and founder of Vocus Communications.
Not three months later, Beforepay secured an additional $ 9 million in what it said was pre-IPO funding, this time led by Alium Capital.
At that time, the startup was growing its user base at a rate of around 20%, month after month.
Today, it has over 100,000 active users and has made over $ 100 million in payments to date.
In a statement released in July, Twiss said this “is only scratching the surface.”
According to a report by the Australian Financial Review, Beforepay reported revenue of $ 4.5 million for fiscal year 2020/21. This represents a little less than $ 45,000 the previous year.
Where is Beforepay located in the Aussie BNPL sector?
Talk to SmartCompany in 2020, Ayoub described the company as an Afterpay or Zip product, but for any products or services that they cannot use traditional BNPL for, i.e. groceries, Netflix and Spotify subscriptions, or even invoices.
At the time, around 60% of Avantpay customers were also using BNPL, he said.
“They use us for everything BNPL doesn’t offer.
It is also just one of many emerging and listed BNPL-style fintechs over the past two years.
We are also seeing the big four CBA banks playing in BNPL and Paypal taking a step as well, pushing the original players Afterpay and Zip to diversify and evolve their services.
It’s a vibrant industry, but Beforepay in particular has sparked heated conversations in the past, with some critics questioning whether this is pushing BNPL too far and just offering expensive payday loans to vulnerable people.
The co-founder of the financial wellness app Pineapple said SmartCompany BNPL and short term loan services may be “some of the most expensive credit products on the market”.
Although “slightly better” than payday loans, he still viewed the costs as excessive, he said.