Harmoney chief executive David Stevens. Photo / Supplied
Harmoney's pitch to potential Kiwi investors appears to have sparked the interest of some but also left unanswered questions for others.
The digital lender, which previously had a model of peer to peer lending has hired Kiwi investment bank Jarden to help scope out its funding options.
An initial public offer is one option on the cards although Harmoney could instead choose to undertake a private fundraising round as it did in October last year depending on the appetite of investors.
Harmoney is said to be looking to raise A$60m this time around with the money used to reinvest back into the business to grow its business in Australia which is still at an early stage.
Harmoney was last week pitching its proposed initial public offer to Kiwi fund managers as well as investors across the ditch in Australia where it would likely IPO.
One investment manager said it was one of the better fin-tech businesses he had seen for a while and it would be looking into it further.
"It is worth doing work on."
The potential investor said Harmoney chief executive David Stevens had impressed with a slick presentation.
"It came across as quite a professional organisation with quite robust systems."
But another investment player said while Harmoney faced a pretty easy competitor environment in New Zealand it was much tougher in Australia where the company was trying to expand.
"You jump across the ditch to Australia and the competition steps up a gear. How they go over there is still very much early days."
He said the cost of acquiring customers in the Australian market was one of the key questions anyone thinking about investing would be asking.
Harmoney is selling itself as having well-integrated technology systems with two-thirds of its loans originated without requiring any human contact.
The market player said that was one of the key points of difference the company was trying to push against its peers but it was hard to judge that from the outside without more information.
Another investment player who had yet to see the pitch said he would be looking to see if the company was anything more than just a finance company/small business lender trying to dress themselves up as a tech company.
Graeme Hart's packaging powerhouse Reynolds Group has disclosed a potential violation of US anti-bribery laws in documents ahead of an initial public offering.
The company, which plans to raise up to US$864 million and rename itself Pactiv Evergreen, said in a regulatory filing that it may have potentially violated the Foreign Corrupt Practices Act (FCPA).
It said its Evergreen Packaging Shanghai business occasionally gave gift cards of "relatively minor monetary values" to Chinese regulators or employees of state-owned companies over several years. This was identified in August 2020, the company said, noting that business formed part of its beverage merchandising segment.
"While our investigation into these practices — which is being conducted by external counsel, accountants, and other advisers — is not complete, we believe we have identified the occasional giving of gift cards representing relatively minor monetary values to government regulators in the People's Republic of China (PRC) and/or employees of one or more state-owned enterprises in the PRC, over the course of several years," the regulatory filing said.
"In addition, it is possible that [Evergreen Packaging] potentially violated the FCPA by engaging external consultants to interact with government regulators in the PRC to avoid potential adverse action by those regulators."
Pactiv called the amounts involved "immaterial, individually and in the aggregate," and added that it has "initiated procedures to remediate such practices, including discontinuing the giving of gift cards and the engagement of any such consultants."
Additionally, Pactiv said it has voluntarily reported these matters to the US Department of Justice and US Securities and Exchange Commission and that it intends to "fully cooperate" with these agencies, with the assistance of legal counsel.
The company expects to sell 41 million shares between $18 and $21 apiece in its planned IPO on the Nasdaq.
At the $19.50 midpoint of that range, Pactiv would have a market capitalisation of US$3.4b. It plans to use the proceeds, along with $653m of cash on hand, to repay debt.
Hart's interests would retain about 77 per cent of the company post-IPO, which is lead managed by Credit Suisse, Citigroup, Bank of America Securities and Goldman Sachs.
Peloton is giving sceptics a run — or in its case a bike ride — for their money.
The share price of the maker of pricey internet-connected exercise bikes (US$2245) and even pricier treadmills ($4295), has more than tripled this year. Lockdown orders and gym closures spurred people to work out from home.
At the time of its IPO last September the New York-based company had about 1.4m "members" including bike owners, mobile app users, and in-studio riders. That number hit 3.1m in the latest quarter that ended on June 30.
These new members helped Peloton deliver its first quarterly profit as revenue jumped 172 per cent from the year ago period to $607m. Churn is low at 0.5 per cent while gross margins remain an impressive 47.6 per cent.
But Peloton's lofty valuation makes a challenging entry point for investors. The company, whose market value has swelled to more than $25b, trades on a heady 279 times forward earnings. This assumes high growth continues with few competitive threats. Amazon, the 800lb gorilla of the tech world, is on a multiple of "just" 69 times.
For now, it has no serious competition. Peloton pioneered the connected fitness sector and has benefited from its first-mover advantage. But these days there is no shortage of upstarts vying to provide fitness fans with their dose of at-home endorphins.
SoulCycle and NordicTrack are among those selling interactive workout bikes. For those who prefer rowing, there is Hydrow, which has its network-connected oars linked with a 22-inch monitor. Mirror, which was acquired by yoga clothes maker Lululemon this year, sells smart mirrors (clever see-through monitors) with which users can take live and on-demand exercise classes.
A breakdown of Peloton latest results also suggests a pothole ahead. While the number of "connected fitness subscriptions" — those who own a Peloton bike and are signed up for the company's $39 a month live workout classes — grew 113 per cent during the quarter, growth in its cheaper "paid digital subscriptions" has been even greater. The digital subscription, which costs just $12.99 a month, does not require any Peloton hardware. It grew 210 per cent during the quarter. Equipment sales account for about 80 per cent of Peloton's revenues.
If users are happy taking Peloton classes without the pricey gear, what will drive sales growth forward, especially in the post-Covid-19 world? It's a question worth working up a sweat over. - Lex, Financial Times
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