US-based eCommerce company, Zebit Inc (Proposed ASX: ZBT), is yet another BNPL looking to list on the ASX in recent times. The company who have no intentions in the near future to operate in Australia, are looking to raise $35M, at an offer price of $1.58, giving the company an indicative market cap of around $149M. The offer is set to formally close on October 16, with an estimated list date of October 23.

The company is essentially trying to access the financially underserved US consumer segment, estimated to be approximately 120 million people, who do not have access to cost effective credit solutions. Zebit’s Co-Founder, President and CEO, Marc Schneider who experienced economic inequality as a child, is determined to make affordable credit available for the large portion of the American population who live paycheck to paycheck in what he describes as a first to address the problem in the US surrounding social and structural issues. 

Zebit’s proprietary software makes risk decisions on customers at the point of sale or sign-up, using their own metric of assessment criteria and algorithms. The Zebit model allows consumers to purchase the items they need and pay back the debt over six months, a significantly longer period than the eight weeks commonly seen with Australian BNPLs. But the most unique feature of the model is that if a customer misses a payment, there are no punitive fees taken against them by the company, instead Zebit attempts to get the customer back on track. The company also does not make any income from penalties or late fees in relation to delinquencies, taking the margin between the wholesale and retail costs of sales.

Despite their American operations, Zebit was drawn to the ASX as other BNPLs have recently experienced success with their listings, Sezzle (ASX: SZL) and Splitit (ASX: SPT) are up 215% and 174% respectively since their recent listing. 

The company experienced an 88% increase in revenue from FY18 to FY19 where it recorded $85.5M. Unfortunately, the company’s report stated COVID-19 has negatively impacted their FY20 revenue, despite a solid first quarter of the year exceeding the preceding two. The company is also not currently profitable, making a loss of over US$10M last financial year.

*Listing dates mentioned are prospective only and are subject to change at the discretion of the company.