Raisebook

Buy Now Pay Later (BNPL) Solution - Focused on Higher-value and More Considered Purchase Items
Payright Limited
Payright Limited
ASX: PYR
  • Payright is a provider of choice for many businesses across multiple sectors wishing to provide a BNPL service to their customers for amounts typically between $1,000 and up to $20,000.
  • Larger transaction sizes lend themselves to a diversified merchant mix.
  • Payright has formed relationships with approximately 2,400 merchants and over 30,000 customers
  • As of 30 June 2020, Payright had over $47M of Gross Receivables.
  • Payright has had significant growth across key operating and financial metrics.
  • The Buy Now Pay Later (BNPL) industry in Australia and New Zealand has experienced strong growth since its emergence over the past decade.
  • BNPL represents only a small percentage of the estimated $287BN addressable market for Payright.
  • There considerable scope for Payright to expand its Merchant network across key sectors in Australia and New Zealand, to attract new and repeat customers, and to enhance its technology capability and customer experience.
  • Market cap at offer price of $98.4M, pro forma historical cash at 30 June 2020 of $22.8M, Enterprise Value of $75.7M (before accepting over subscriptions)
Raise Amount
$10,000,000
Offer Price
$1.2000
Closes
Dec 3, 2020

Payright Ltd (Proposed ticker ASX:PYR) commenced operations in 2016.

The Company specialises in providing merchants in Australia and New Zealand with both in-store and online buy now pay later (BNPL) solutions for the benefit of their customers.

PYR is focussed towards higher-value and more considered purchase items - as opposed to lower value and more impulse-driven transactions generally associated with other parts of the BNPL sector.

Payright is committed to providing its customers with access to a diverse range of goods and services on flexible and interest‑free payment terms (averaging 24 months).

In doing so, Payright believes it can contribute positively and responsibly both to the business growth of its merchant partners, and to creating enhanced lifestyle choices and positive social outcomes for its customers.

Examples of how Payright achieves this include:

  • Assisting consumers by providing interest-free loans for the purchase and installation of solar panels to reduce the economic and environmental cost of energy usage;
  • Enhancing future job prospects for consumers by providing interest-free funding for approved education, upskilling and training courses; and
  • Providing access to interest-free funding for personal matters which may have a positive impact on a customer’s health, wellbeing and self-esteem, such as dental works, fitness equipment, and health and beauty services.

Led by a highly skilled and committed team, with decades of experience in the consumer finance and payments sectors, Payright has grown steadily to become a meaningful industry participant.

Payright is a provider of choice for many businesses across multiple sectors in Australia and New Zealand wishing to provide a BNPL service to their customers for amounts typically between $1,000 and up to $20,000.

Payright acknowledges the pioneering efforts of the original industry participants.

With BNPL representing only a small percentage of the estimated $287BN addressable market for Payright, there is considerable scope for Payright to expand its Merchant network across key sectors in Australia and New Zealand, to attract new and repeat customers, and to enhance its technology capability and customer experience.

Strong Track Record of Growth

Payright has experienced significant growth across key operating and financial metrics as per the below charts.

In particular, from 30 June 2018 to 30 June 2020:

  • GMV achieved a Compound Annual Growth Rate (CAGR) of 225%, a total of $68.1M during FY20
  • Total customers achieved a CAGR of 230%, reaching 33,876 as of June 30, 2020
  • Active Merchants achieved a CAGR of 98%, reaching 1,778 as of 30 June 2020.
  • Gross Receivable achieved a CAGR of 251%, reaching a total of $47.2M as of June 30 2020.

Arrears and Credit Losses

A robust credit assessment and decisioning process means Credit Losses have trended well below the broader industry average at just 1.25% at 30 June 2020.

The company has developed a tailored credit assessment algorithm and robust arrears management technology that has resulted in a well monitored and stable Arrears and loss position.

30 day Arrears

Payright differentiates itself from many other BNPL offerings through the following features:

  • Targeting transaction sizes over $1,000;
  • Higher average transaction size supports a wider range of industry types and a more diversified merchant mix including higher price-point retail, home improvement, health and beauty, photography and education;
  • Flexible Customer repayment terms; and
  • Rapid customer on-boarding at the point of sale in-store or online, including enhanced credit assessment and decisioning and ID verification.
  • Payright’s experience with Merchants that have partnered with another BNPL provider which targets smaller transaction sizes (less than $1,000) indicates that Merchants are responding positively to the greater transaction size coverage that is available with Payright, which translates to greater selling opportunities for such Merchants.

The Offer

Payright Limited (ACN 605 753 535) is offering approximately 8.33 million new shares at the offer price of $1.20 per share to raise $10.0 million (with the ability to accept Oversubscriptions to raise up to a further $10.0 million).

The offer of the securities are made in, or accompanied by, a copy of the Disclosure Document which can be obtained by clicking on the "ACCESS DISCLOSURE DOCUMENT" button on this page.

Bell Potter Securities Limited is acting as the Lead Managers to the Offer.

Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the Disclosure Document.

Before making an investment decision, potential investors should read the Disclosure Documents entirely, and seek professional financial advice.

Investors should be aware that there are risks associated with an investment in this Company.

A complete set of risks associated with an investment in the Company is included in Section 5 of the Disclosure Document. Investors should consider those risks carefully in deciding whether to invest in the Company.

Offer Statistics

Before accepting Oversubscriptions Assuming all Oversubscriptions are accepted
Offer Price $1.20 per Share $1.20 per Share
Gross cash proceeds from the Offer $10.0 million $20.0 million
Total number of New Shares to be issued by Payright under the Offer 8.3 million 16.7 million
Total number of Shares on issue on Completion of the Offer 82.0 million 90.3 million
Total number of Shares to be held by Existing Shareholders at Completion of the Offer 73.6 million 73.6 million
Market capitalisation at the Offer Price $98.4 million $108.4 million
Pro forma historical cash as at 30 June 2020 $22.8 million $32.2 million
Enterprise Value $75.7 million $76.2 million

Indicative Timetable

Event Date
Retail Offer closes Thursday 3 December 2020
Settlement of the Offer Friday 18 December 2020
Allotment of Shares under the Offer (Completion of the Offer) Monday 21 December 2020
Expected despatch of holding statements Monday 21 December 2020
Shares expected to begin trading on the ASX on a normal settlement basis Wednesday 23 December 2020
This deal closed on December 03, 2020