Smartphone app will allow Greensill workers to be paid daily

Lex Greensill’s supply chain finance company plans to offer Australian workers the ability to use an app to be paid daily.

Billionaire Greensill founder Lex Greensill

Billionaire Lex Greensill’s supply chain finance company plans to offer Australian workers the ability to use a smartphone app to be paid on a daily basis by their employer from June, as the $US4bn ($5.8bn) group considers a sharemarket float in the year ahead.

In a wide-ranging interview with The Australian, Mr Greensill said his London-based Greensill group was preparing to launch the Greensill pay app — its first consumer product offering — with a major customer in the UK next month and expected it be live in Australia by June.

“We have decided that our next big challenge as a firm is to deliver the same service we have been giving to 2.5 million suppliers to the millions of employees who work for our customers,’’ Mr Greensill said.

“We are convinced that nobody should have to wait to get paid their wages.”

Supply-chain finance, also known as reverse factoring, is a practice where corporations use loans offered through the cloud by fintech companies such as Green­sill to pay their suppliers early.

Greensill charges a fee and an interest rate — which it claims is lower than bank rates — for providing the finance from its own German bank and international pension funds.

Now Greensill plans to extend the concept to employees following its acquisition last year of London-based technology company FreeUp, which is developing technology to enable workers to receive early payment for earned, but unpaid, wages at no cost.

Last month The Guardian reported that Mr Greensill met Scott Morrison during a visit to Australia at the end of October, when he reportedly told the Prime Minister the new Greensill consumer app could be applied to the 150,000 employees of the commonwealth public service.

Greensill’s purchase of FreeUp last October was bankrolled by a $US655m investment by Japanese conglomerate SoftBank that valued the London-based Greensill group at $US4bn.

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In May last year SoftBank’s $US100bn Vision Fund agreed to spend $US800m to emerge with just over 20 per cent of Greensill.

Mr Greensill said his company had “comfortably exceeded” its forecast of $600m in revenues in the year to December 31, 2019 and was confident they could exceed $1bn in the year ahead.

Asked about the prospects of the company floating this year, he replied: “We are not ruling it out and it is one of the options we are considering.”

It is understood the Australian-born Mr Greensill, whose brother and family run a sugar cane and sweet potato farming company based in Bundaberg, in central Queensland, is keen to investigate the possibility of listing Greensill in his home country.

But he will also look at options in London and the US.

The company is believed to have received multiple approaches from investment banks keen on taking the company public.

In 2018, Greensill received a strategic $US250m investment from global private equity group General Atlantic that made Mr Greensill and his brother Peter — who runs the family’s Greensill Farming operation — billionaires overnight.

Greensill reported a pre-tax profit of $US61.48m for the year to December 31, 2018, compared with a $US21m pre-tax profit in the previous year.

Greensill is said to be one of the few companies in the SoftBank ­Vision Fund portfolio that is profitable. The Japanese conglomerate has been under pressure since it reported a $US9bn quarterly loss in November on its large tech funds including the Vision Fund, which holds investments in Uber, WeWork, Slack and other major US start-ups.

But it is understood SoftBank founder Masayoshi Son played a significant role in Greensill’s move to extend supply chain finance to employees with its purchase of FreeUp.

“We are delighted to have the SoftBank Vision fund as a shareholder and our experience with them has been outstanding in the six months they have been a ­shareholder,’’ Mr Greensill said. “Being able to work with Masa on a day-to-day basis gives whole new insights on the way the world can work in the future.”

Greensill has also previously said some of the capital it has received from SoftBank would be deployed on new technology in markets including India, Brazil and China.

“We are expecting to make announcements about some very neat things we are doing in China and India in the coming weeks. If you think about the impact of the pay product in emerging markets generally, it is going to be significant,’’ Mr Greensill said.

In 2017, Greensill backed the $700m purchase of steelmaker Arrium by London-based Liberty House, run by entrepreneur Sanjeev Gupta, which has held discussions with Alcoa to buy the Portland aluminium smelter in Victoria.

Mr Greensill declined to comment about the Portland move.

It is understood Liberty House now accounts for less than 10 per cent of Greensill’s revenue. Three years ago it was significantly ­higher.

“Our relationship with Mr Gupta and his group remains very good. We value him as a customer,’’ he said.

Greensill’s relationship with Swiss fund manager GAM and GAM’s links to Mr Gupta have been under scrutiny over the past 18 months. One fund run by GAM, the GAM Greensill Supply Chain Fund, saw its value plummet last year after another Greensill customer, Vodafone, redeemed its holdings to pay for a takeover bid.

“Our position on GAM remains the same — we remain committed partners with GAM in our supply chain finance fund,’’ Mr Greensill said. He has previously said the reduction did not lead to any loss to investors.

“In the last six weeks, the GAM supply chain finance fund has doubled in size,” he said. “I expect it will double again in the next six weeks.’’