SME-focused BNPL provider Bizpay has gone into administration

Bizpay, which at one stage was talking up a possible $400m IPO, has been placed in administration with an urgent sale process now under way.

Bizpay offered a buy now, pay later service for businesses.

Bizpay, which at one stage was talking up a possible $400m initial public offer, has been placed in administration with an urgent sale process now under way.

BRI Ferrier’s Jonathon Keenan and Peter Krejci have been appointed administrators of BizPay Group, and are looking to sell the business, which specialised in offering a buy now, pay later service to small to medium enterprises.

Early last year the company was spruiking a $25m convertible note funding round, having previously raised $45m.

Investors were reported to include Macquarie and SG Hiscock.

Then-chief executive David Price said in March last year the company was targeting a September listing on the ASX, and was aiming for $30m a month in transaction volumes by then, with an aim to be EBITDA positive by the middle of this year.

But by May the company had laid off 30 per cent of its workforce and the capital raise was still incomplete.

All up, the company is reported to have about 450 investors, including a number of angel investors as well as R2 Ventures and Raven Capital.

Bizpay’s most recent financial report, for the year ended December 31, 2022, shows it lost $15.3m that year and $21.7m the previous year.

A lack of adequate controls on the lending side contributed to the losses.

“In the financial year ending 31 December, 2021, the company expanded its lending and advanced significant sums to corporates without appropriate security and suffered significant losses,’’ the report says.

“The directors wrote down the value of the loan book by $13.2m for the year ended 31 December, 2021, and a further $4.6m in 2022.

“The company has successfully recovered monies from some customers and is continuing to pursue other customers that it believes have the means to pay some or all of their obligations to the company.’’

The report says Bizpay closed its US business in June 2022 to bolster working capital for the Australian arm.

David Price resigned as chief executive on July 20, 2022.

During 2022 non executive director Jonathan Hart also resigned, as did non executive director Lisa Weinstein who was in the role for just two months ending in May, 2022.

During the 2022 financial year the company’s net asset position deteriorated from $13.6m to just $498,000 and the cash position fell from $20.3m to $2.7m.

Company documents lodged with the corporate regulator ASIC indicate the company has about 1.5 billion shares on issue, with $55.3m paid against the ordinary shares and $4m against 400 million preference shares.

Mr Keenan said the administrators were seeking buyers interested in the company’s operations and/or the loan book.

“We’re looking to sell or restructure the business,’’ Mr Keenan said.

“That process kicked off on Monday. A number of interested parties have already expressed interest.

“We’ll be looking to explore those options fairly quickly.’’

The Bizpay website says the company is not currently accepting loans.

The Bizpay model charged a buyer about 3 per cent of the face value of an invoice if they chose to pay over four fortnights, or about 4 per cent to repay over four months.

Bizpay would pay the supplier immediately and assume the credit risk.

While Bizpay at one point raised money at a $151m valuation, when it was seeking to raise money late last year the company was reportedly valued at just $3.4m.

Originally published as SME-focused BNPL provider Bizpay has gone into administration