White label BNPL Limepay may finally gets its ASX listing, but not the way it hoped
Three years ago amid the BNPL goldrush, fintech Limepay was hoping to list on the ASX.
It wasn’t to be for the white label buy-now-pay-later platform, founded in 2016, which billed itself as Australia’s first enterprise payments fintech.
But Limepay, which rebranded in 2022 as April Solutions, will become a listed company after being swallowed up by ASX-listed Spenda in a deal worth about 20% of the capital raised by the fintech over the last 8 years.
Spenda (ASX: SPX) has signed an agreement to acquire Limepay for up to $8 million in an all-scrip transaction that sets several high bars for the fintech, which had raised more than $40 million from investors including former Woolies boss Brad Banducci, hotels heavyweight and Tourism Australia chair Michael Issenberg and Telstra exec Michael Ebeid.
That included a $21 million raise in December 2020 ahead of IPO plans, before cofounder Dan Peters departed the business suddenly in May 2021 and the listing was shelved.
Nowadays April Solutions, aka Limepay, generated $2.8 million in revenue in FY24 to produce a gross profit of $1.4m from around 200 business customers. But that means the fintech needs to ramp up its sales by 200% to meet the thresholds set by Spenda to make acquisition deal worth $8m. The issue of Spenda shares to Limepay spans four tranches, with three of them performance-based.
Initially, Limepay shareholders will receive $2.48m in September 2024 as 204,958,678 Spenda shares at $0.0121. Another $720,000 worth of Spenda scrip goes their way at the end of 2024 on the proviso that Limepay receives an FY24 R&D refund of the same value.
After that, the Spenda wants to see a dramatic jumps in revenue before Limepay’s owners get any more buy-in. Tranche 3 is worth $2.4m on the proviso that Limepay hits annualised rolling 3-month average revenue (ARR) of at least $4.8m for three consecutive months. Tranche 4, worth $2.4m inSpenda shares at an issue price of the greater of $0.0225 or a 10% discount to the 90-day VWAP, lands if and when Limepay’s ARR reaches $7.2m for three consecutive months.
The acquisition still requires board and shareholder approvals Spenda and Limepay as well as sign off by the ASX in terms of a waiver from ASX Listing Rule 7.3.4. If all goes to plan, Spenda expects to complete the acquisition by the end of the third quarter CY24.
Spenda MD Adrian Floate said together, the companies will have a strong pipeline of new customer acquisitions, and the merger will improve their speed in executing on existing customer contracts.
“This is a high value acquisition for Spenda that brings product capability, exceptional people, great customers and many opportunities to work together to drive revenue growth,” he said.
“The combined entity will have an expanded product suite that will enhance its competitive positioning in market and enable access to new customers and market verticals. From an operational perspective, the addition of a high-quality team of banking software engineers will accelerate our current project pipeline and improve our operational efficiency. We have complementary product roadmaps, and the ability to scale payment flows across the combined entity which we expect will increase our wallet share per customer.”
Limepay cofounder Tim Dwyer, who’s believed to hold around 30% of the fintech, said it will be a great cultural fit for both our organisations.
“We are extremely excited about the opportunity to create a leader in the embedded finance space by integrating with Spenda and its management team led by Adrian,” he said.
“I believe the transaction will position us to execute significant business opportunities and create a leading payments company for enterprise customers.”
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