Fintech player Credit Clear plans ASX listing and $15 million IPO

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Credit Clear ASX Listing | iTMunch

Melbourne-based fintech Credit Clear has announced its plans to forge ahead with its plans for a $15 million initial public offering (IPO). The decision was taken as the novel Coronavirus pandemic fuels demand for technologies for the speedy recovery of unpaid bills.

Credit Clear’s $15 million IPO

Credit Clear is requesting investors to dig deep to fund its IPO and share market listing, which is estimated to value the company at about six times its historical revenue. The company is chaired by former Tyro Payments (ASX: TYR) and National Australia Bank (ASX: NAB) executive Gerd Schenkel. It is also backed by rich-listers Paul Little and Alex Waislitz. The IPO is expecting to issue 42.8 million shares at an offer price of $0.35 per share. This would imply a $79 million market capitalisation and a $64 million enterprise value.

For the 2020 financial year, the company recorded $11.2 million revenue on a proforma basis. This was up from $10.3 million in the previous corresponding period. Credit Clear expects to clear $18 million revenue in the calendar year 2020. This will be backed by a surge in demand for its services after call centres handling debt recovery in southeast Asia closed due to the pandemic. The funds raised from the IPO will enable Credit Clear to accelerate the development of its proprietary technology platform. The platform is designed to collect receivables using digital communication and billing systems. The debt recovery firm intends to hit the ASX boards later this month. It will use the ticker ‘CCR’.

SEE ALSO: Fintech Revolut looks for new Aussie boss for senior global role

Pandemic Struggles Answered by Credit Clear

According to Credit Clear founder Lewis Romano, the timing is right for a market listing.  His belief is fueled by the number of consumers worldwide who are struggling to meet their financial commitments since the pandemic struck. Companies have been seeking alternative means of chasing customers for unpaid bills after debt recovery call centres in the Philippines closed earlier this year. Romano said that it has had an instant effect on their business. He is optimistic about having a greater focus on debt collection as everyone moves into life post-COVID lockdown. He stated that the pandemic has not delayed, deferred or stalled their ambitions and they intend to be listed fairly soon. 

Additionally, Mr Romano cited that unemployment rates directly impacted demand for debt recovery services. People who have lost their jobs or can’t find work realize they can’t pay what they owe as they lack sufficient income. The Australian Bureau of Statistics research showcased the national unemployment rate in June 2020 at a 22-year high of 7.4% [1]. At present, around 992,300 people are out of work. The government’s July economic and fiscal update states that this rate is only expected to increase by the end of the year. There is also an anticipated peak of around 9.25% in the December quarter. Romano signalled that a higher national unemployment rate means weaker economic conditions. This often contributes to increased debt and hence, provides an opportunity for the industry to expand.

Credit Clear’s Acquisitions

Credit Clear acquired the full-service debt recovery agency called Credit Solutions in December 2019. The company had been utilizing its platform to service debt collection contracts with several Top 50 Australian companies. The acquisition was funded thanks to a private $9 million capital raising. It gave the merged group the ability to collect earliest-stage debts through to more delinquent debts. According to Romano, the acquisition rationale was clear as Credit Solutions has over 800 clients across state and local governments, utilities, telecommunications and consumer finance sectors.

SEE ALSO: Fintech provider Linkly acquires Premier Technologies

For more updates and latest tech news, keep reading iTMunch

Image Courtesy: Image by Gerd Altmann from Pixabay

Source

[1] Australian Bureau of Statistics (ABS) (2020) “Employment, hours worked and unemployment rise in June” [Online] Available from: https://www.abs.gov.au/media-centre/media-releases/employment-hours-worked-and-unemployment-rise-june  [Accessed October 2020]

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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). Riddhi’s writing relationship with iTMunch began in May 2020. This is where she developed a knack for writing content for the technology domain. She's an expert in tech content writing who has written over 700 blogs for iTMunch in just a year. Riddhi loves diving deep into tech sub-domains like financial technology, marketing technology, HR technology, Artificial Intelligence and gaming technology. She loves staying updated with the latest and upcoming trends in digital marketing, digital payments, fintech, gaming, web design and app development. She cherishes writing about futuristic technologies like blockchain and cryptocurrency, NFTs, Internet of Things, Facial Recognition, Machine Learning, Edge Computing, etc. Riddhi also likes to keep an eye on what’s going on with the tech titans like Google, Facebook and Apple. One of her major interests is in staying updated with the latest IT startups and the groundbreaking technologies they’re coming up with. When Riddhi is not writing content, she is binging on documentaries on Netflix (check out ‘The Great Hack’, ‘Seaspiracy’, and ‘What the Health’). She also likes reading books once in a while (Yuval Noah Harari and Michelle Magorian are some of her favorite authors). Riddhi also likes listening to podcasts like The Tim Ferriss Show (do listen to the ones with guest Naval Ravikant) and The Joe Rogan Experience.