Neo-lender Plenti Group Limited is preparing to list on the Australian Stock Exchange with a proposed listing date of September 23. The Company is looking to raise $55 million at an offer price of $1.66 per share, effectively giving Plenti an indicative market capitalisation of $280 million. There is no shareholder sell-off as part of the offer where existing shareholders are expected to retain over 80% of Plenti upon completion of their IPO.
The Sydney-based company was founded in 2014 under the name Ratesetter, rebranding to ‘Plenti’ to better reflect the company’s varied offerings and service. Since then, Plenti has issued more than $870 million in car, personal, and renewable energy loans to over 55,000 customers, $400m of which is currently outstanding. Fortunately for the company, there is plenty of opportunity within their chosen credit industries, the three lending categories estimated to exceed $45 billion in Australia.
Plenti reports that their cloud-based lending platform ‘Venus’ for potential applicants is what sets them apart from their competitors, credit-checking customers after a pre-approval application in only a few minutes. Upon pre-approval, customers can then apply for up to $100,000 for automotive loans, $80,000 for renewable energy, and up to $45,000 for personal loans. After an application has been approved, customers receive the money the same or following business day upon accepting their online contract.
While the big banks have yet to mirror such an efficient and user-friendly loan model, there are other companies offering very similar value propositions to customers. Technology lender, Wisr (ASX: WSR) is just one that also utilises personalised interest rates and fast online credit-checking and loan facility activities. Wisr have also recently announced that they will be expanding their loan offerings to car financing, in addition to the existing personal loan facilities.
With the threat of competitor lenders aside, Plenti has also noted that the economic impacts, especially unemployment figures, could have a negative effect on customers’ ability to repay debts. The company has not recorded a notable reduction in profitability or loan revenues compared to pre-COVID-19, however, it may still be too early to appreciate the economic impacts.
The financials indicate the company has significantly increased their revenue for the past three financial years from $16.1 million in FY18 to $41.5 million in FY20. While the consistent revenue growth indicates the company has grown significantly since beginning operations in 2014, their losses have almost doubled from $8.6m to over $16m over that same period.
From the $55 million raised, $25 million is expected to be used towards the warehouse funding of equity tranches. A further $24.3 million (44.2%) is also being put towards working capital which would include marketing, costs of loan issuing, and operating cost, The remaining $5.7 million towards the costs of the offer.
As per their Prospectus, Plenti Group Limited is looking commence trading September 23 under the code ASX: PLT.
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