SME lending startup Prospa is having a second go at its IPO, after an initial run-in with the Australian Securities and Investments Commission (ASIC) led to a 12-month delay.
Prospa is expected to list on the ASX on June 11, and is targeting a $109.6 million raise, which would value the startup at $609.9 million.
According to the startup’s prospectus, $60 million will come from a primary raise, and the remaining $49.6 million will allow existing shareholders to exit, if they wish.
New shareholders will hold 13.9% of shares in the company, the prospectus adds.
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The new listing date is almost exactly a year after Prospa originally planned to go public, on June 6, 2018. Originally, the IPO was pegged to raise $146 million, valuing the business at $576 million.
But, the startup announced a 48-hour delay at the last minute, after ASIC raised a query into its small-business loan terms.
Two days later, the IPO was delayed indefinitely, with a statement saying the startup was “constructively engaged with ASIC to review its current loan terms”.
In September last year, Prospa amended its contract terms following an ASIC review.
Founded in 2012, Prospa has since provided small businesses with more than $1 billion in funding, and has a current net loan book of more than $300 million.
In 2016, the business won the SmartCompany Smart50 Awards, having seen growth of more than 1,000%.
Between the 2016 and 2018 financial years, revenue grew by 106%, and 26% growth is forecast for the 2019 calendar year.
In a letter to prospective investors, co-founders Beau Bertoli and Greg Moshal said the results they have seen has been “greater than we ever imagined, and give us an immense sense of pride in the role of Prospa in the Australian economy”.
The new funding will be used to support growth strategies, including product development and market expansion.
The founders also plan to repay Prospa’s $17.2 million corporate debt facility.
“We started Prospa in 2012 because it was clear to us there had to be a better way,” the letter reads.
“As small-business owners, we’d experienced the frustration of missing opportunities because we couldn’t access finance. We found the traditional system slow, cumbersome and disheartening.”
Despite the delay, listing is “only the beginning” for Prospa, the founders said.
“As a public company, our guiding principles won’t change. We’ll continue to strive to exceed our customers’ expectations and deliver for all stakeholders.
“We aim to build a company that creates value over decades, not just years.”