Beforepay back with another pre-IPO raising News26 Mar 2021

Salary prepayments start-up Beforepay is back in front of investors for a capital top-up, this time seeking as much as $5 million via the sale of convertible notes.


Stockbroker Shaw and Partners kicked off the raising this week, telling clients that funds raised would help fund Beforepay’s loan book, to acquire customers and for working capital.


The convertible notes would pay a 10 per cent coupon in kind, according to the termsheet, and convert into ordinary equity at the IPO.

 

The conversion at IPO would take place at a 20 per cent discount to the listing price, the term sheet said, or a 30 per cent discount if it takes more than 12 months. Converted shares would be subject to a 90-day escrow on listing.


Shaw and Partners was calling for bids by April 1. The raising was pegged at $3 million to $5 million but the company reserved the right to take oversubscriptions.


Beforepay gives customers access to their pay ahead of time, in return for a fixed 5 per cent fee. Customers pay the advance back in four week instalments.


The term sheet said Beforepay had 64,000 users, the average payback period was two weeks and there was a 4.5 per cent static loss rate. It had a $5.3 million receivables book as at the end of February, net of provisions, and was running at $5.6 million annualised revenue in February.


The raising comes only a few months after Beforepay banked $9 million in a separate pre-IPO funding round led by Alium Capital.

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