Openpay has completed a $10 million capital raising round, and revealed it has cancelled plans for an initial public offering.
The $10 million, which was originally marked as a pre-IPO round, came from “a group of investors” that included existing backer Meydan Group, as well as Investec and SL Investments Group.
The company did not comment on the reasons for cancelling the IPO plans.
Business Insider understands that chief executive Simon Scalzo departed the company in August after less than a year at the helm, with chairperson Avi Schechter currently acting as the public face of the fintech.
The latest investment also sees Investec head of emerging companies David Phillips and SL Investments Group retail director Darron Kupshik join the board.
With the new investment, Openpay is set to take on the dominant name in the ‘buy now, pay later’ fintech space, Afterpay, but serving a broader portfolio of industries than its rival – healthcare, automotive, home improvement and retail.
The startup operates with a “never any interest” business model, which means it generates revenue by charging a fee for participating merchants and an additional transactional fee for high-value purchases.
“Compared to Afterpay our terms are longer. In the retail space we have up to four-month terms, and in other verticals it’s up to 24 months. Our amounts are also flexible, and you can pay for retail items of up to $10,000,” Scalzo told Fairfax Media last year.
Openpay is now available through 4,000 merchants in Australia with 200,000 payment plans already active.
Schechter said the fintech was at “a very exciting point” on its growth curve.
“Over the past four years we have focused on developing our unique technology. Openpay is now poised for rapid growth in Australia’s $300 billion retail industry,” he said.
“The $10 million equity raising enables us to accelerate our growth plans across a range of industries where increasingly both consumers and merchants are using the Openpay payment plan technology.”