Financial technology company MoneyMe has had a positive start on ASX after shares shot up as high as 13% on its opening price late last week, following a successful IPO roadshow.
After settling at $1.60 a share last week (5% above its $1.52 opening price) MoneyMe was on the rise again in early Monday trading, hitting $1.64.
The company has already raised $45 million through strong backing from local funds, including Renaissance Asset Management, Perennial Value and Ellerston Capital.
It’s payday for co-founder Clayton Howes, who was the largest shareholder in the company heading into the raise, with almost 30% of the business to his name.
Despite recent commentary over founder-led IPOs in the wake of the WeWork saga in the United States, Howes says MoneyMe has ticked the right boxes for investors as the company looks to carve out its own slice of the ongoing fintech gold rush.
“Investors like technology businesses that have their own tech and have demonstrated operating leverage,” Howes tells SmartCompany.
MoneyMe, a Smart50 winner from 2017, was founded in 2013 after Howes and co-founders Steve Bannigan and Scott Emery brainstormed the idea over a few frothies.
The business has been growing strongly for several years, booking almost 300% revenue growth, at $14 million, in 2016-17.
Revenue is expected to reach $46 million in 2020 as the business embarks on an ambitious expansion into the United States, where its new virtual credit card product, called Freestyle, will be tested on millennial consumers.
The competition will be stiff though. A collapse in demand for traditional credit cards is driving billions of dollars of investment in so-called credit disruptors in the form of buy now pay later (BNPL) and other mediums.
Basically, millennials aren’t fans of traditional credit, and MoneyMe is hoping to cash in by offering a digital credit card that can provide the benefits of services such as Afterpay without the need for customers to be restricted to approved vendors.
MoneyMe already has a BNPL product aimed at the real-estate sector called ListReady and will be hoping to expand its operations further into the retail sector with Freestyle.
“We’re incredibly well-positioned to capture the millennial customer segment,” Howes says.
“We’ve already been successful there.”
Howes thinks Australia’s big banks are already passed the point of disruption with their traditional credit card offers and expects them to focus on verticals such as mortgages and personal loans in the future.
In a post-banking royal commission world, credit will be the domain of financial technology firms, he says.
But the regulatory landscape remains uneven, while MoneyMe’s product falls under consumer credit protections, requiring a range of regulatory hurdles to be jumped, the likes of Afterpay escaped such mandated scrutiny earlier this year.
Howes says his investors prefer MoneyMe swims between the flags in an evolving landscape.
“We chose to be conservative and take the regulated approach to delivering our product,” he says.
“It will pay off over time.”