Australian online lender Prospa on track for second tilt at A$610m flotation

The fintech pioneer has raised A$110m to to develop new products, expand into fresh markets, repay corporate debt and fund its growing loan book.

Australian online small business lender Prospa said it is on track for a second attempt at a public float next month, with valuation of A$610m.

The firm raised A$110m by selling stock priced at A$3.78 per share to institutional and retail investors, leaving it on course for a market debut on Sydney’s Australian Securities Exchange on 11 June.

The Australian fintech pioneer, founded in 2012, said it will use the cash to develop new products, expand into fresh markets, repay corporate debt and fund its growing loan book.

Prospa was forced to dramatically pull its float 15 minutes before trading last June after regulator, the Australian Securities and Investments Commission, questioned whether its small business lending complied with industry standards. The platform announced it had made changes to its small business loan contracts, last September.

Jobs for seahorse farmers

The Sydney-based platform was founded by entrepreneurs Greg Moshal and Beau Bertoli, who said they found high street banks attitude to small business lending “slow, cumbersome and disheartening”, in a joint letter to new investors.

The founders added that since launch the business has helped more than 19,000 Australian and New Zealand small firms with over $A1bn in funding, creating some “57,000 more jobs for tradies, hospitality workers, hairdressers, seahorse farmers and accountants”.

Venture capital fund Entree Capital, an early backer, will emerge as the group's largest shareholder with a 33.7 per cent stake, while joint chief executives Greg Moshal and Beau Bertoli will own 15.3 per cent and 6.1 per cent of the business respectively.

AustralianSuper, Australia's largest superannuation fund, is also a shareholder in the business.

New products

Bertoli said: “The financial services industry is changing rapidly, and our role in supporting small business is now even more vital.

“Through the launch of our new cash flow products and by entering into new geographies, we will be able to reach even more small businesses looking to grow and run their business and help them pay for goods and services, quickly and easily.”

In March, the business also reported first half 2019 results, showing loan originations jumped 44 per cent to A$225m, compared to the same period a year ago. It added that revenues leapt  41 per cent to A$67.7m over the same period, “driven by strong loan originations”.

There are 2.3 million small businesses in Australia, according to official data, employing 44 per cent of the country’s private sector workforce and generating 35 per cent of the nation’s gross domestic product.