The Interesting Story of Fintech Player - MoneyMe Limited

Fintech is the amalgamation of Finance and Technology. The FinTech industry comprises of companies that use technology to make financial systems and the delivery of financial services efficient and effective.

The term Fintech is believed to have emerged in the 21st century when the financial institution applied technology to its back-end systems. It includes various sectors like education, NPO’s, Investment banks etc. Fintech includes the use of cryptocurrencies such as Bitcoin. They have been thriving towards automating various processes in the banking, trading, financial services and insurance sector.

The innovative progress, such as fast mobile payment services changed the way we manage our finances. It is predicted that the range of Fintech services will transform the market even more with Artificial Intelligence and Machine Learning technologies will make the products of Fintech an integral part of the booming digital life.

Why Investors Invest in FinTech Companies?

Payment Services

FinTech companies connect banks and users. This includes e-wallets to process the transaction in a short span of time. As soon the payment is credited, the payment reflects into the account instantaneously. Majorly, three types of payment apps fall in this category-

  • Bank apps
  • Social media apps
  • Standalone apps

Blockchain

The blockchain system would be going to change the way businesses transact and manages assets. This technology also transforms banks and other financial institutions and companies. Fintech companies can make use of blockchain networks which becomes a powerful tool for improving the business processes, fair trade and support open and fair societies.

It helps to connect buyers and sellers

It creates a platform where buyers and sellers can meet and process their large volume transaction digitally through various apps or software. This platform provides a convenient way to buy and sell goods and services, digitally.

Faster rate of approval

Fintech companies speed up the rate of approval and accessibility for insurance and finance. In most of the cases, the approval and process (on the whole) can be done in less than 24 hours and makes it convenient for business as well as the customers.

Advanced Security

The options of advanced technology has resulted in Fintech companies to invest more in security to ensure the safety of the consumer. These companies are introducing the latest technologies (such as biometric data and encryption) to their products in order to process secure transactions.

MoneyMe Limited (ASX: MME)

MoneyMe Limited was founded in 2013 and listed on Australian Stock exchange in 2019. It uses its technology platform and big data analytics that delivers innovative loan offering to tech-savvy consumers. The company’s technology platform allows the applications to be completed in ~5 minutes and the credit limit is made available to the customers shortly after approval.

MoneyMe listed on Australia Stock Exchange (ASX)

On 12 December 2019, the company announced its listing on Australian Stock Exchange following its successful $45.0 million worth Initial Public Offerings (IPO).

Initial Public Offering

The company commenced trading of its shares on a normal settlement basis on the stock exchange at 11.00 AM, 12 December 2019. It had a strong IPO demand and exceeded the target raising of $45.0 million, resulting in substantial scaling back of allocations. The company’s IPO was strongly supported by retail and institutional investors.

The IPO proceeds will be primarily used to invest in the company’s core business model, expanding the company’s products offerings, market penetration and grow its consumer base.

MoneyMe’s MD and CEO, Clayton Howes stated that-

Operational Update

The company has reaffirmed the FY20 forecasts. MoneyMe has experienced strong momentum across key metrics in FY20. The first-quarter gross loan origination increased more than 60 per cent y-o-y. The Company’s operating margins, and the portfolio’s weighted average interest rate would be tracked positive to the plan.

Funding

The company remains in discussions with various major banks for a new funding facility. If the company is able to get the funding from these banks on the terms discussed, there would be lower cost of capital. However, as of now, low funding costs due to potential implementation of the new facility have not been reflected in the company’s prospectus for FY20.

Financial Reporting

The company’s first statutory reporting on the stock exchange will include its interim results for the six months period ended to 31 December 2019 to be released in February 2020.

Total Revenue Increased by 32.5 per cent during FY 2019

On 10 December 2019, the company has reported the financial result for the period ended 30 June 2019, a few highlights of the results are as follows:

  • The company’s Total Revenue has been increased by 32.5 per cent to $31.8 million compared to the previous year corresponding period (PCP).
  • Earnings Before Corporate Interest on Debt, Income Tax, Depreciation and Amortisation (EBITDA) of the company decreased to $0.470 million compared to 0.989 million in 2018.
  • MME NPAT has dipped to $0.324 million.
  • Cash and cash equivalent of the company stood at $6.0 million.
  • The total liabilities of the company was $82.8 million.

MME’s Stock Performance

The stock of MME traded for the first time at $1.720 on ASX on 12 December 2019. The company’s total number of outstanding shares traded was 6,186,559. The bid and offer amount of company was $1.710 and $1.720 respectively.

After the close of trading hours on 13 December 2019, MME quoted $1.60, down by 6.9% relative to its last close.


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