Harmoney said to be seeking $98m in IPO

Harmoney chief executive David Stevens. Photo / Twitter

Kiwi online lender Harmoney looks set to go ahead with its initial public offer on the Australian Securities Exchange.

The company, which had been testing the waters over a public float or private capital raising, is said to have secured a sharemarket listing deal that would see it raise A$92.5 million ($98m) million at A$3.50 a share, according to the Australian Financial Review.

The pricing would see it worth 3.5 times its 2020 financial year revenue, giving it a market capitalisation of A$350 million, the Street Talk column reported late on Friday, with a planned listing date of November 19.

The amount expected to be raised is higher than the A$60 million Harmoney was initially testing the waters on.

The company, which was New Zealand's first peer-to-peer lender but which ditched that model earlier this year, carried out a pre-IPO pitching round in September talking to potential investors in both Australia and New Zealand.

The pitch sparked the interest of some fund managers here but also left unanswered questions for others.

But the increase in capital raise indicates demand has been strong for the fin-tech. The first A$70 million of funds raise would go to fund Harmoney's growth, the AFR reported.

Harmoney's chief executive David Stevens said in its recent annual report that it estimated Australia's personal loan market to be more than eight times larger than New Zealand.

The company made a $15.4m loss for the 15 months to June 30 but that was largely due to it switching from a peer-to-peer lending model to using on-balance sheet term lending.

The move meant it had to provision for future credit losses in its current accounts under the IFRS accounting standards. Of the $8.89m provisioned only $2.5m was an incurred impairment loss on a loan book of $136m.

Harmoney said its lending had surpassed $1.7 billion and it has almost 50,000 customers in New Zealand and Australia.

Stevens noted its growth trajectory with the company, which launched in 2014, taking four years to reach $1b in lending but only 12 months to lend the next $500m.

The ASX has proved popular with New Zealand fintechs in recent months with Kiwi buy now pay later business Laybuy also choosing the Australian market.