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Prospa announces IPO

Prospa announces IPO

Prospa has announced the terms of its initial public offering, selling new shares at $3.64 to raise approximately $146 million and list on the ASX next month.

The fintech lender has announced that it expects to have a market capitalisation of around $576 million on listing with the offer price of $3.64 per share.

The prospectus has been lodged today with the Australian Securities and Investments Commission (ASIC) and will reportedly help fund growth in Prospa’s existing business model, while enabling it to invest in new product categories and expand into New Zealand.


The IPO involves an offer to institutional investors in Australia and certain other geographies; a retail offer to Australian retail clients and sophisticated New Zealand retail clients of Macquarie Equities, Crestone and JBWere, as well as to investors chosen by the company; and employee offer for eligible Prospa employees.

No general public offer of shares will be made available.

The deal is fully underwritten by Joint Lead Managers Macquarie Capital (Australia) Limited and UBS AG, Australia Branch.

Speaking of the IPO, co-CEO Greg Moshal said: “From the very beginning, Prospa has set out to be the market leader at what we do: lending to small businesses. And we have done this by obsessing about our customers and finding new ways to improve their chance of success by designing outstanding new customer solutions.

“Prospa’s success has been the result of a group of smart, talented and passionate people uniting around a common mission to change the way small businesses experience finance.”

Likewise, co-CEO Beau Bertoli added: “We started Prospa in 2012 because it was clear to us there had to be a better way. As first mover in a nascent market, Prospa has led the way in enabling small businesses to succeed. Listed life marks another milestone in our growth; however, our approach to business won’t change.

“We are relentlessly looking for a better way to operate, continuously innovating our products and business model and using data to make great decisions and better manage risk.”

The company’s new chairman, Greg Ruddock, said on behalf of the Prospa board: “Prospa has flourished by offering fast, flexible loans to Australian small businesses that have historically been underserved by traditional banks.

“Since inception, Prospa has strategically invested in the two most important parts of our business — people and technology. This offer marks another stage of growth for the company, as we look to expand into new geographies and products.

“I’m also incredibly proud of our customer experience. Prospa boasts a Net Promoter Score of +77, and 69 per cent of existing customers eligible to take another loan with Prospa are doing so. Our business strategy is to continue to invest in technology and people in order to create a better user experience and adapt to our customers’ needs.”

Mr Ruddock affirmed that the two co-CEOs and the rest of the senior management team were “deeply committed to running the business and overseeing all business activity, including the implementation of Prospa’s business strategy, product development, sales and marketing, distribution and operations.

“In addition, the senior management team combines significant experience across financial services, technology, risk management and go-to market excellence, positioning Prospa well for future growth.”

The IPO will see long-term, London-based venture capital investor Entrée Capital support the offer to maintain its 34 per cent stake in the company.

Further, Australian-based venture capital investors AirTree has invested an additional $3 million, giving it a stake in the company of 8.4 per cent, whilst SquarePeg has invested an additional $10 million, increasing its holding from 3.2 per cent to 4.4 per cent.

Post IPO, AirTree and SquarePeg will be escrowed to the end of the forecast period.

Entrée Capital, Prospa’s co-founders Greg Moshal and Beau Bertoli, chairman Greg Ruddock and non-executive director Avi Eyal (co-founder and managing partner of Entrée Capital, and a board member at Prospa) will be escrowed until the release of Prospa’s FY19 full-year audited results.

Mr Eyal said: “I am honoured to have been involved with Greg and Beau from the date Prospa was founded. From our long walks at night around the Sydney CBD discussing strategy and first credit approvals telephone calls to this IPO milestone, we, Entrée Capital, have had the privilege of funding and being a part of this unbelievable Australian growth story.

“The Prospa team is unparalleled in its dedication and skill — this will continue to drive Prospa’s success. After six years, Prospa has only just started, and Entrée Capital is proud to be involved in the business.”

[Related: Prospa prepares to float]

Prospa announces IPO

Annie Kane

Annie Kane is the editor of Mortgage Business.

As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also a regular contributor to the Mortgage Business Uncut podcast.

Before joining Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.


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