Afterpay rival Openpay sinks on ASX debut

Afterpay competitor Openpay has made a weak start on the ASX following a $50m IPO.

Openpay chief executive Michael Eidel.

Afterpay competitor Openpay has made a weak debut on the ASX following a $50 million initial public offering.

The Melbourne company’s shares traded to a low for the day of $1.28, down 20 per cent from the IPO price of $1.60, and closed the session only just above the day’s low.

The initial public offering was underwritten by lead manager Shaw and Partners.

“We are absolutely delighted to see Openpay complete its ASX debut today,” Openpay chief executive and managing director Michael Eidel said in a statement issued before shares started trading at noon.

“The strong support from investors is testament to the strength of the opportunity we see ahead of us.”

The company began work developing its payments platform in 2013 and entered the UK market in June.

It operations in the retail, automotive, health care and home improvement verticals, letting people pay off their purchases of $50 to $20,000 in installations lasting from two to 24 months.

In comparison Afterpay’s maximum purchase price is $1500, which must be paid off in four equal fortnightly instalments.

Openpay had 1834 active merchants as of November 30, including Bunnings, Peter Alexander, Smiggle and AP Eagers.

It had 178,390 active customers in Australia, New Zealand and the UK. Openpay reported a $14.7 million loss in the 12 months to June 30, on $11 million in buy-now, pay-later income, and did not make a prediction for FY20. A third of the company was sold off in the IPO.

At $1.28 per share the company has a market capitalisation of $120 million. Its biggest investor is Meydan Group chief executive Yaniv Meydan, who owns a 20.2 per cent stake.

“Listing on the ASX reinforces our commitment to strong regulation and governance and provides a great opportunity for investors to participate in what we see as a fast-growing, globally relevant Australian company,” Mr Eidel said.

AAP