Fintech lender Prospa launches $110 million IPO after botched first attempt

L-R: Matt Kean, NSW Minister of Innovation and Better Regulation, Greg Moshal and Beau Bertoli, joint CEOs of Prospa). Photo; supplied

Everyone deserves a second chance. And now Australian fintech-enabled small business lender Prospa will get one, as it confirms its intentions to list on the ASX. Again.

In a a prospectus lodged with the exchange on Thursday, Prospa announced it is seeking to raise $109.6 billion with an initial public offer (IPO) of new shares at a price of $3.78 per share.

Prospa, which makes super-fast loans between $5,000 and $250,000 to small businesses, mysteriously withdrew its first IPO campaign in June, just minutes before the float was scheduled.

Co-founders Greg Moshal and Beau Bertoli issued a joint letter accompanying the prospectus, reflecting on the company’s journey since launch in 2012.

“We’re proud of our achievements so far, but we believe this is just the beginning,” the letter states. “The financial services industry is changing rapidly, and our role in supporting small business is now even more vital.”

The letter makes some big claims about the impact Prospa has made in its relatively short history, including the impressive suggestion that its lending activity has contributed an estimated $4 billion to Australia’s nominal GDP.

No mention, though, of the company’s first attempt to list on the ASX, nor the concerns supposedly raised by the regulator that held up the IPO.

Prospa was poised to list in 2018 with an intended raise of $146.5 million, with the bell-ringing planned for midday on 6 June. But just 15 minutes before, Prospa pulled the pin, citing concerns raised at the last minute by ASIC.

“Prospa are seeking to clarify queries raised by ASIC yesterday in relation to Prospa’s small business loan terms, in the context of an industry wide review into financial services small business loan terms,” a Prospa spokesperson said at the time. “Consequently the listing is expected to be postponed for 48 hours.”

However, The Australian newspaper reported that ASIC had no such concerns. “The corporate regulator, which met Prospa 24 hours before the original listing date, had not raised any specific red flags pertaining to Prospa’s prospectus,” the report said.

Then, just two days later, that “48 hours” turned into an indefinite delay, until the Australian Financial Review reported last Friday 10 May that the second attempt was about to go ahead.

When contacted by Business Insider Australia, a Prospa spokesperson declined to comment on the report, but the prospectus filed yesterday confirms both the fundraising goal of just under $110 million and the slated listing date of 11 June 2019.

Undeterred by the experience of the short-lived October IPO, joint lead managers UBS and Macquarie Capital have signed on to underwrite the deal once again.

The IPO consists of an offer to institutional investors, some of which – like industry super fund AustralianSuper – have already taken up, and an exclusive retail offer to the clients of wealth management firms Crestone, Bell Potter and Macquarie Equities. No general public offer of shares will be made, a statement to the ASX makes clear.

“As Australia’s largest superannuation fund we are excited to extend our support of the country’s largest fintech lender to small business,” said AustralianSuper senior portfolio manager Shaun Manuell.

Business Insider Australia sought clarification as to the size of AustralianSuper’s new shareholding, but a Prospa spokesperson declined to disclose the figure.