US buy now, pay later fintech Sezzle in $60m raise on ASX
Sezzle, a US-founded buy now, pay later fintech, is raising AUD 86.3 million ($60 million).
The total comprises of an institutional placement which raised AUD 79.1 million.
Under this placement, 14.1 million CHESS Depositary Interests (CDI) were issued, representing 8.4% of Sezzle’s existing capital.
CDIs allow non-Australian companies like Sezzle to list on the Australian Stock Exchange (ASX).
The other AUD 7.2 million is a non-underwritten share purchase plan which is now in the process of completion.
Sezzle’s move to Australia
The start-up launched its lending platform in 2017 in the US. It then expanded its offering to Canada.
In July 2019, the US fintech launched an oversubscribed initial public offering (IPO) on the Australian Securities Exchange (ASX).
Australia already has a handful of buy now, pay later competitors which are surging in growth.
This month alone, Afterpay launched a AUD 1 billion capital raising and founder sell-down, Brisbane-based Fu opened its Series A funding round, and Laybuy launched its second pre-IPO raising.
“We appreciate the continued support of our existing institutional investors, particularly those that have remained as CDI holders and supporters since our ASX IPO, around one year ago,” says Sezzle’s CEO, Charlie Youakim.
The new capital will help strengthen Sezzle’s balance sheet, as well as fuel international growth, customer numbers, marketing and new products.
Share prices rocket
Following the publication of its second quarter update, Sezzle’s share price rocketed to a record high last week. It hit AUD 8.25 before reaching a trading halt.
During the quarter, the fintech’s underlying merchant sales totalled to $188 million. This represented a 58% quarter-on-quarter increase, and a 349% year-on-year increase.
The strong quarter results were down to increased activity amongst both consumers and merchants, as well as to repeat usage.
“Our strong [first half] performance, improving consumer profile, and confidence in reaching an annualised run rate for UMS [underwriting management system] of $1 billion by the end of 2020 allows us to be uniquely positioned to further expand through a number of near-term growth initiatives,” says Youakim.
“Importantly, this capital raising will give us the ability to invest in these initiatives as well as fortify our balance sheet.”