Australian buy-now-pay-later startup Openpay raises $30 million

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Buy-now-pay-later Openpay raises 30 million | iTMunch

Melbourne-based buy-now-pay-later Openpay raises an extra $30 million (A$33.77) via an oversubscribed local institutional placement. The raise follows the announcement of the company securing A$45.44 million from Global Growth Capital on Monday for its business in the UK. This is in addition to the $75 million worth debt facility already in place. Here’s all you need to know about the recent placement.

The buy-now-pay-later market in Australia is on a boom. Almost 2 million Australians used a “buy now, pay later” product in 2019. According to Worldpay’s Global Payments Report, the number of BNPL users will cross 4 million in Australia by 2023 [1]. However, the report doesn’t take the economic turmoil caused by COVID-19 into account.

Details about the institutional placement 

The Australian buy-now-pay-later company said that it has received binding commitments and inbound interest from existing and new institutional investors to subscribe for its 14,069,742 shares. These shares were sold at a price of $2.4 that raised about $30 million.

What’s interesting is that the issue price represented a 9.8% premium to the 5-day volume-weighted average price of $2.185. There was a 12.1% discount given to the 1-day VWAP of the price of $2.730 and a 20.5% discount to the last closing price of $3.02 on 3rd June 2020.

The placement depicts 15% of Openpay’s total issued capital and is expected to settle within a week.

SEE ALSO: Australian FinTech Afterpay appoints Elana Rubin as its chairman

Buy-now-pay-later Openpay’s stock prices soared 

Openpay’s stock prices soar post funding | iTMunch

AfterPay rival Openpay’s (ASX:OPY) share prices spiked after the announcement of the debt facility. It started the week at $1.30, gaining 26% and then quickly leapt to 51% on Wednesday and closed at a price of $3.02. Post this, Openpay went into a trading halt ahead of the raising. When trading resumed on Thursday, its shares prices soared again and closed at $3.51.

CEO and Managing Director of Openpay, Michael Eidel said that the combination of the macro environment and the way they have been serving their customers has enabled them to take Openpay to new heights.

The buy-now-pay-later startup OpenPay reported its best month of growth in May 2020. Mr Michael adds that their positive momentum has been reinforced after various leading institutions reached out to them to offer funding to accelerate their growth plans. He says that they are pleased to have been offered this kind of support and that they are looking forward to deploying the capital to grow the business even further.

SEE ALSO: Zip Co to acquire US-based buy-now-pay-later company QuadPay

For more updates and latest tech news, keep reading iTMunch

Source

[1] Worldpay from FIS (2020) “Global Payments Report” [Online] available from: https://worldpay.globalpaymentsreport.com/#/en [accessed Jan 2020]

Image Courtesy:  Image by TheDigitalWay from Pixabay

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Riddhi Jain is a technology content writer. She is based in India and has been working as a content writer since 2018. Riddhi has been writing content in the tech domain since May 2020 and can’t get enough of it. Riddhi has pursued most of her education from her hometown, Indore. She has graduated as a Bachelor of Business Administration and discovered her love for writing blogs while pursuing an internship during college. Once she discovered her love for writing, she went on to improve this skill set (and hasn’t stopped since).
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