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  • Prospa will have a market capitalisation of approximately $610m on listing[1]
  • Prospa is expected to list on the ASX on 11 June 2019
  • Chairman Gail Pemberton comments on Prospa’s focus on customer experience and scalability
  • Co CEOs Greg Moshal and Beau Bertoli publish Co-Founder, Joint CEO Letter

Prospa, Australia’s #1 online lender to small business, has today announced an offer of new shares (Shares) at an offer price of $3.78 per share to raise $109.6 million through an initial public offering (IPO) under a prospectus (Prospectus) lodged today with the Australian Securities and Investments Commission.

The majority of funds raised will be focused on funding the equity portion of the growing loan book and working capital, investment in new products and geographies and to repay corporate debt.

The Offer involves:

  • an Institutional Offer, which consists of an offer to Institutional Investors in Australia and New Zealand and certain other geographies; and
  • a Retail Offer, consisting of the:
    • Broker Firm Offer, which is open to Australian retail clients and sophisticated New Zealand retail clients of, Crestone, Bell Potter Securities and Macquarie Equities.
    • Priority Offer, which is open to investors in Australia chosen by the Company; and Employee Offer, which is open to eligible Prospa employees.

The deal is fully underwritten by Joint Lead Managers Macquarie Capital and UBS. No general public offer of Shares will be made available.

Chairman Gail Pemberton AO said on behalf of the Prospa Board she was pleased to offer the opportunity to become a shareholder in Australia’s # 1 online small business lender.

Over the past few years, Prospa has strategically invested in people and technology and from the outset, Prospa recognised people would power its success and they have invested in building the right team and culture for the company to succeed. Prospa also designed its technology platform and workflow to be scalable, flexible and support its growth strategies.”

“Prospa has always put the customer at the heart of everything it does. The strength of the customer experience is recognised with a Net Promoter Score  in excess of 77 and 68% of existing customers eligible to take another facility with Prospa are doing so.” [2]

“We will continue to invest in the customer experience, technology and people in order to build products and services that allow small businesses to prosper.”

Prospa welcomes a range of high quality, long term investors to the share register including current shareholder AustralianSuper, Australia’s largest superannuation fund. The IPO will see long term, London-based venture capital investor Entrée Capital, and Australian based venture capital investors Airtree and SquarePeg not selling any equity.

Entrée Capital, Greg Moshal and Beau Bertoli will be subject to escrow until the Company’s financial results for the year ended on 30 June 2020 have been released to the ASX. All other Escrowed Shareholders, including Square Peg Capital and Airtree Ventures, will be subject to escrow until the reviewed financial accounts of the Company for the half year ended on 31 December 2019 have been released to the ASX.

AustralianSuper Senior Portfolio Manager Shaun Manuell said:

“As Australia’s largest superannuation fund we are excited to extend our support of the country’s largest fintech lender to small business. As a long term investor and supporter of Australian business we look forward to participating in the growth of Prospa as it plays an increasingly important role in servicing a crucial segment of the economy.”

The small business lending market in Australia represents a substantial market opportunity. Small businesses are a major contributor to the economy, with 2.3 million[3] small businesses in Australia employing 44 per cent of Australia’s private sector workforce[4] and generating 35 per cent of Australia’s GDP.[5] These small businesses have been underserved by the traditional banking system, providing an opportunity for Prospa.

Since inception, Prospa has leveraged its early mover advantage to become the #1 provider of online small business loans in Australia. Prospa has achieved this through significant investment in its three key strategic pillars:

  1. Technology: Prospa’s fully cloud based technology platform is designed to provide a high quality customer experience as well as the opportunity to improve automation capabilities
  2. Distribution: Prospa established a multi-channel distribution network including leading direct channel customer acquisition capabilities, strong brand awareness and relationships with 8,900+ registered partners.
  3. Funding: Prospa created the first asset-backed warehouse securitisation for small business loans in the Australian Market; and has further diversified its sources of funding to include Warehouse Facilities, Term Facilities, Corporate Debt and Cash to support its loan book and operations.

These factors together deliver significant operating scale and market advantages.

The company has expanded into New Zealand where it has delivered NZ$12.5m originations to 31 March 2019; and has launched two new products – Prospa Pay and Line of Credit.

Prospa’s new Line of Credit product is designed to help small business owners run their business day-to-day and handle any unexpected expenses. The line of credit product is a convenient and flexible source of funds between $2,000 to $25,000, with interest paid only on what customers use, while they use it.

Prospa Pay is a Buy Now, Pay Later B2B payments solution that allows for the purchase of items by small businesses from approved Prospa Pay vendors on an interest-free basis. Once approved, the Vendor’s small business customer is able to purchase items up to $20,000 over terms of between three and nine months and make weekly fixed amount interest-free payments.

Avi Eyal, Managing Partner at Entrée Capital and non-executive director of Prospa said,

“We are honoured to have worked with Greg and Beau and been part of this incredible Australian growth story from the date Prospa was founded.  The Prospa team is world class – and redefining the way small businesses experience finance. After seven years, Prospa has only just started, and Entrée Capital is proud to be a part of that journey.”

Co CEO Greg Moshal said:

“We started Prospa in 2012 because it was clear to us there had to be a better way. As small business owners, we’d experienced the frustration of missing opportunities because we couldn’t access finance. We found the traditional system slow, cumbersome and disheartening. From the very beginning, Prospa has set out to be the market leader at what we do – lending to small businesses.

“Prospa’s success has been the result of a group of smart, talented and passionate people united around a common mission to keep small business moving. We’ll continue to invest heavily in our people and award- winning culture, creating world-class career opportunities as the business grows.”

Co CEO Beau Bertoli added:

“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.”

A copy of Beau Bertoli’s and Greg Moshal’s co-Founders’ Letter which forms part of the Prospectus is appended to this release.

Prospa History:

2012 – Prospa founded by Greg Moshal and Beau Bertoli with seed funding from Entrée Capital, originated first loan for $20,000

2013 – Same business day loan approval capability first implemented

2014 – 1,000th customer served

2015 – Implemented the first Australian small business loan securitisation

2016 – First introduced the Credit Decision Engine within the loan application process

2017 – Introduced a senior funder into Prospa’s revolving warehouse securitisation trust structure

2018 – Implemented the first Australian rated ABS Issuance for unsecured small business loans

2018 – Prospa launches in New Zealand

2018 – Prospa is one of first founding signatories to the Code of Lending Practice that sets industry-best practice

2019 – Prospa delivers more than $1 billion in loans to 19,000 small businesses

2019 – Line of Credit product launched in Australia

Key dates[6]:

16th May 2019 – Prospectus Date

24th May 2010 – Retail Offer open

31st May 2019 – Retail Offer close

11th June 2019 – Commencement of ASX trading (on a conditional and deferred settlement basis)

The Offer is being made by Prospa Group Limited pursuant to the Prospectus lodged with Australian Securities and Investments Commission (ASIC) on 16th May 2019. Anyone considering investing in the IPO should read the Prospectus carefully and in its entirety before deciding whether to apply for Shares. Anyone who wants to acquire Shares will need to complete the application form that will be in or will accompanying the Prospectus. An electronic form of the prospectus can be viewed or downloaded online at www.prospa.com

Media contact:

Anna Fitzgerald
+61 410 447 922
[email protected] 

Jim Kelly
+61 412 549 083

Roger Newby
+61 401 278 906

[1] Market capitalisation based on the Offer Price multiplied by the total number of Shares on issue on Completion of the Offer. Shares may not trade at the offer Price after listing.

[2] 68% represents the average repeat rate for eligible customers only (where eligible customers are defined as not having defaulted on their Prospa loan), based on the average monthly repeat rates for the 25 month period March 2015 to March 2017. The average unique repeat rate (including ineligible customers) for this same period would be 64%. Cohorts originated after March 2017 are still in the process of seasoning and therefore excluded from this analysis.

[3]   Small businesses defined as having fewer than 20 employees, including non-employing businesses; ABS 8165 (Counts of Australian Businesses including Entries and Exits), Jun 2013 – Jun 2018 (released in February 2019).

[4] Small businesses defined as having fewer than 20 employees; small businesses provided employment for approximately 4.8 million people in 2017 which was 44% of the workforce excluding the financial, insurance and public services (as defined in the dataset; ABS 8155 (Australian Industry), 2016-17 (released in May 2018)).

[5] GDP excluding financial, insurance and public sectors (as defined in the dataset, ABS 8155 (Australian Industry), 2016-17 (released in May 2018)).

[6] These dates are indicative and may change.