Rosy outlook sees Brierley-backed Afterpay shares rocket

Shares in fintech start-up Afterpay, backed by Ron Brierley, have risen quickly after a positive market update.

Shopper Kate Mogg uses Afterpay to buy items online. Picture: David Caird. Picture: David Caird.

Shares in fintech start-up Afterpay, backed by corporate raider Ron Brierley and a host of alumni from his former Guinness Peat Group, have risen to 80 per cent above their issue price this week after a positive market update.

The company facilitates ­online transactions for consumers and merchants by providing a real-time buy-now, pay-later ­credit service.

Its offshore equivalent is the BillMeLater offering from PayPal.

Afterpay’s backers include Sir Ron’s ASX-listed Mercantile Investment Company, LinkedIn Southeast Asia managing director Cliff Rosenberg and Melbourne IVF founder John McBain.

The company revealed this week that since March 31, the total number of retail merchant clients live with its product had grown by more than 140 per cent to over 300.

It also said it had over 100,000 unique end-customers, an increase of more than 100 per cent since March 31.

“The most pleasing aspect of this rapid growth in customer numbers is that it has not diminished end-customer repeat transaction behaviour,” the company said.

“Approximately 65 per cent of all Afterpay transactions since January 1 had consistently been generated by repeat Afterpay end-customers.

“The growth in retail merchant clients and end-customers alike has resulted in strong increases in underlying Afterpay sales and Afterpay merchant fees generated therefrom,’’ it added.

Afterpay shares touched a high of $1.81 on Tuesday, compared with their $1 issue price on listing in May. They closed 2 per cent lower yesterday at $1.75.

Bell Potter’s Hugh Robertson, who floated the company, told clients this week that “most importantly, Afterpay is now beginning in-store integration of the service”.

“Unique customers are close to 100,000, a key indication that consumers are using the service again, and again, and again,’’ he said.

Analysts believe the key risks for Afterpay are fraud or customers defaulting on their payment obligations due to having insufficient funds in their accounts.