Billionaire investor Alex Waislitz predicts 2021 IPO for Afterpay VC fund

Billionaire investor Alex Waislitz has up to six unlisted companies in his portfolio that he believes are headed to public markets.

Philanthropist Alex Waislitz. Picture: Aaron Francis/The Australian

Billionaire investor Alex Waislitz believes up to six of the small and emerging technology companies he has stakes in could be headed for initial public offerings this financial year.

Waislitz splits his tech investments between his private group Thorney and his listed investment company Thorney Technologies (TEK).

One Waislitz is particularly excited about is a venture capital firm backed by billionaires Nick Molnar and Anthony Eisen’s Afterpay, the buy now, pay later business that has surged in value this year and become a market darling.

Waislitz’s TEK has backed the AP Ventures investment vehicle that reportedly intends to invest $50m-$60m in five or six ventures in the next few years. One of its investments is LayAway Travel, a firm that allows travellers to lay buy their trips.

Waislitz said he expects AP Ventures to list next year.

“Probably in 2021 they will come to market,” he told a recent TEK investor briefing. Afterpay has a 44 per cent stake in AP Ventures.

“Think about Google Ventures and all the other venture arms that come off the major tech platforms. They’re seeing a lot of opportunities and while it doesn’t fit directly with their business nonetheless they’re very commercially appealing to be involved in.”

TEK has achieved growth of about 100 per cent for its net tangible assets since the company was formed in 2017, though its share price is still trading at a discount to the NTA.

Waislitz said TEK aims to have 60-70 per cent of its holdings in listed shares, the largest of which are buy now, pay later firm Zip Co and biotech company Mesoblast, and the remaining 30-40 per cent in unlisted start-ups and tech companies hopefully headed for IPOs or trade sales.

Zip shares are up about 58 per cent since January 1, while Mesoblast has more than doubled in value over that time, and has quadrupled in value since the market hit lows in late March.

Waislitz has a long association and friendship with Mesoblast founder Silviu Itescu. The company is conducting trials in the US on a drug to treat severe complications from COVID-19.

“They’ve got a very exciting six months, maybe even three to four months ahead of them,” Waislitz said about Mesoblast.

Alex Waislitz in his Melbourne office. Picture: Aaron Francis/The Australian

Perhaps the best stock in TEK’s portfolio is BrainChip, the one-time minnow that has developed a computer chip that copies brain functions to process information or data.

BrainChip shares were worth 4c on January 1 and have surged as high as 97c. On Monday they were trading at about 66c.

While the listed shareholdings serve as the foundation for TEK, Waislitz is pursuing plenty of unlisted companies. He will often take profits from holdings in fast-growing listed companies such as Afterpay, in which TEK has a small stake, and reinvest the funds in private companies that look headed for the market.

“We anticipate that three or four or even six companies may IPO in the current financial year and we are feeling pretty positive about their prospects,” Waislitz said when discussing some of the unlisted firms TEK holds.

“We’ve been growing our international exposure and got access to many proprietary deals in Australia, and in the US and Israel in particular. We look forward to many of those companies coming to IPO — listing potentially not only in Australia but in overseas markets.

“The exciting thing about the unlisted space is it tends to be special opportunities we get through our network around the world and domestically: the share brokers, investment bankers, other directors and executives we have been involved in. The challenge with the unlisted is it absorbs cash and you don’t have that potential to trade that cash in the short term.”

Two companies Waislitz is excited in are Cluey Learning, which has transformed from an online tutoring and test preparation service to wider online learning support for school students, and Perth internet services provider Pentanet, which pitches itself as a low-cost alternative to the NBN.

He is also excited about Aussie Broadband, the country’s fifth-largest internet provider that seems set for an IPO that would give it market capitalisation of $190m, and debt recovery firm Credit Clear, also headed for a market value of about $80m.

Waislitz said TEK would continue to pursue opportunities in the unlisted space. “While there might be more volatility in the short term when it comes to pricing, we think this tech revolution is well and truly upon us. COVID has enhanced and fast-tracked many of the adoptions of the technologies that we are investing in.”