Greater access to IPOs through OnMarket BookBuilds

amscot has partnered with OnMarket BookBuilds to provide our clients with even more investment opportunities. In addition to the exclusive capital raisings that amscot undertakes and offers to our clients, you can now take advantage of offers from OnMarket. Our association with OnMarket will allow you to bid directly on IPOs and have the shares allocated straight to your holdings at amscot. Through OnMarket our clients will also be able to access free research, management interviews and get notifications on upcoming IPOs.

OnMarket is Australia’s first online platform that lets all investors buy shares in IPOs free of any fees other than the cost of the shares. Since launching in October 2015 OnMarket has hosted 1 in 3 ASX IPOs, so we are obviously excited to be able to offer our clients access to this cutting-edge platform. For each offer hosted by OnMarket you get easy bidding & payment, free independent research, and a chance to 'meet the management' via exclusive video interviews. Best of all, when you invest in IPOs via OnMarket, any shares you buy can be allocated directly to your amscot Stockbroking account so you can manage your portfolio without disruption.

How does it work?

We will display the list of current offers from OnMarket on our website. If you see an offer that you want to invest in then click on the Bid Now button to apply for shares. You will leave amscot website and be redirected to our partner's (OnMarket) bidding platform where you will need to sign up with your Holder Identification Number (HIN). If you have already signed up then you will be taken straight to the bidding page for the selected offer.

It is important that you enter your HIN correctly when you set up your login at OnMarket. This will make for a seamless experience if you want your shares to be automatically allocated to your amscot account.

Current OnMarket Offers

IPO
Telecomm. Services
$0.25
Size of Offer $12 - 18 million
Minimum Bid $2,000.00
Opening Date 11/12/2018
Closing Date 14/01/2019

 

Bell Potter is lead manager on the IPO and OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. 

OnMarket is accepting applications for the Uniti Wireless Ltd IPO during the Exposure Period.  

Introduction

Uniti Wireless Ltd (ASX: UWL) is a fixed wireless broadband provider with proven high speed performance with the potential to provide an alternative solution to the nbn™ on a national scale.  It is currently operational in suburban metropolitan Adelaide and areas of suburban Melbourne connecting residential, business and enterprise customer premises to its independent ‘last mile’ network. As a replacement for ADSL Internet and nbn™ services, it operates its network independently and does not rely on Telstra’s ADSL copper network or the nbn™ infrastructure to operate or reach its customers.

The Company has executed a share sale and purchase agreement to acquire FuzeNet.  FuzeNet was incepted in 2007 and operates the business of a retail service provider (RSP). FuzeNet’s major fibre access provider has an additional 90 buildings under construction for CY2019 – a 39% increase over the current building portfolio for their core product and further expanding the Uniti Wireless network/tower capability.

The combination of both businesses is highly complementary in that FuzeNet has access to over 200 on-net buildings (towers) – almost tripling the potential of the current Uniti network of 113 towers.

Investment Highlights

  • Firm commitments for $12 million minimum offer size received by lead manager Bell Potter
  • Fixed wireless broadband provider with proven high speed performance and large geographic footprint with the potential to provide an alternative to the nbn™ on a national scale
  • Targets nbn™ Fibre to the Node areas where 35% of premises are unable to access nbn™ services above 50 megabits
  • Over 6,000 existing residential and business customers in Adelaide and Melbourne
  • FuzeNet acquisition provides a further 18,000 customers and national footprint for future growth
  • Forecast FY2019 pro-forma revenues of $23.1 million and EBITDA of $2.0 million
  • Lead by telecommunications veterans Michael Simmons (CEO) and Graeme Barclay (Chairman). Michael was previously 26 years with TPG Telecom Ltd, CEO of Vocus Limited and Director of M2 Group Ltd

 

The figure below illustrates the core components of the network and network architecture

Offer overview

Uniti Wireless Ltd is looking to raise up to $18 million and will have an indicative market capitalisation of approximately $37.9 million at maximum subscription. The Offer is not underwritten, however, Bell Potter, as Lead Manager, has secured firm commitments from pre-Committed Investors to subscribe for $12m.

The proceeds of the offer will be used for the following:

  • Acquisition of FuzeNet (including costs);
  • Fixed wireless network deployment across New South Wales, Queensland, Victoria and Western Australia;
  • provide sufficient growth and working capital; and
  • fund the costs associated with the Listing and the Offer;

Revenue Model

Revenue for Uniti Wireless comes primarily from the monthly fee charged to customers (ARPU), equipment sales to customers and set up fees (which under the new accounting standards adopted are recognised over the life of the customer).  Uniti Wireless has continued to grow customer numbers and increase revenue each year, with Compound Annual Revenue Growth of 127.5% from FY16 to FY18 and 112% for FY17 to FY18.

A summary of the combined pro-forma historical income statements is set out below:

Business Strategy

The key business strategies of the Group (including FuzeNet once acquired) include:

  • nationally expanding its broadband network through FuzeNet’s existing network footprint and RSP relationships with non-nbn™ fibre access networks;
  • increasing its customer base and pursuing small business, corporate, government and enterprise customers; and
  • following completion of the FuzeNet acquisition, transitioning the business to a telecommunications provider of both wireless and fibre access networks.

The figure below indicates the growth in Uniti Wireless towers following the FuzeNet acquisition.

Customer acquisition

In order to increase its customer base, Uniti Wireless deploys a number of customer acquisition strategies, including customer referral programs, online marketing, sales and PR initiatives and partnering with channel partners. These customer acquisition strategies have contributed to a growth in active customer services.

The breakdown of Uniti Wireless’ customers, as at September 2018, is provided below.

As shown in the figure below, at September 2018, the total number of active customer services had grown to 6,050 – an approx. 116% year-on-year increase. Over the 6 months to 30 September 2018, Uniti Wireless has added on average approximately 300 customers per month net of customer churn.

Geographic expansion

Geographic expansion into multiple regions and niche markets, coupled with an accelerated rapidly deployable low cost network, are key components of the Uniti Wireless national expansion strategy. Uniti Wireless has undertaken planning and analysis of potential roll-out locations in regions including New South Wales, Queensland and Western Australia.

The FuzeNet acquisition is an important contributor to the national expansion strategy for the reasons set out below:

  • allow Uniti Wireless to expand its product offerings to non-nbn™ fibre and nbn™-fibre access networks, as well as value added services on broadband and Internet connectivity access network deployments;
  • provide Uniti Wireless with access to FuzeNet’s national geographic reach to assist with the establishment of national coverage and increase the owned wireless network footprint for fixed wireless;
  • the acquisition is expected to increase profitability (as Uniti Wireless and FuzeNet combined have positive EBITDA), improve net operating cash flows, and contribute working capital to pursue the national expansion strategy.

Board and Management

Uniti Wireless has an experienced Board and executive management team with significant commercial, financial and listed company experience. This includes:

  • Graeme Barclay (Non-Executive Chairman), currently CEO of Axicom Group Holdings Pty Limited (previously known as Crown Castle Australia). He was formerly Group CEO of BAI Communications for 11 years, during which the business grew domestically and expanded internationally, and diversified into private networks and transit location telecommunications networks.
  • Michael Simmons (CEO), most recently Michael served as Group CEO of Vocus Limited (ASX:VOC) on an interim basis, and prior to this led the Enterprise, Wholesale and Government business unit of Vocus. Michael also held executive positions with TPG Telecom Limited (ASX: TPM) and was employed by TPG for in excess of 26 years.
  • Che Metcalfe (Co-Founder & CTO, Executive Director), prior to founding Uniti Wireless, Che founded several startups over the past two decades, including telecommunications platform Podmo, digital incubator Mega and mobile gaming company Kukan Studios.
  • Sasha Baranikow (Co-Founder & COO, Executive Director), prior to founding Uniti Wireless, Sasha was a fast growth commercialisation specialist who worked in a variety of media marketing and production roles over the past decade. At Imagination Games, Sasha opened new business markets with the launch of multiple products into major AU/NZ retail chains.

Risks

You are encouraged to read the Prospectus carefully as it contains detailed information about the Company and the Offer. Like all investments, an investment in the Company carries risk. As set out in Section 6 of the prospectus, Uniti Wireless Ltd is subject to a range of risks, including but not limited including a significant level of competition in the market, significant disruption or failure of the Company’s technological platforms, supply risk, and low customer take up of services and customer revenue.

 

 

Section 734(6) disclosure: The issuer of the securities is Uniti Wireless Ltd ACN 158 957 889. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).​

Exposure Period

OnMarket is accepting applications for the Uniti Wireless Ltd IPO during the Exposure Period.  Applications made prior to the completion of the Exposure Period may be withdrawn.  General applications received during the exposure period will not be conferred a preference over general applications received after the completion of the Exposure Period.  

If a replacement or supplementary prospectus is issued, this will be provided to you along with the opportunity to withdraw your application.

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Bids over $10,000 may be scaled back more heavily. Duplicate bids under the same investment profile, investor name or residential address may be cancelled.

IPO
Food & Beverage
$0.20
Size of Offer $4.5 - 8 million
Minimum Bid $2,000.00
Opening Date 6/12/2018
Closing Date 17/12/2018

 

Peak Asset Management is lead manager on the IPO and OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Bids over $5,000 may be scaled back more heavily. ​

Introduction

Candy Club Holdings Ltd (ASX: CLB) sells confectionery products direct to consumers through monthly subscription plans (the B2C Business) and to specialty market retailers (the B2B Business) through its operating subsidiary Candy Club LLC, a company incorporated in California, USA (CCL).  Candy Club is headquartered in Los Angeles and currently only makes its products available to customers in 48 states of the USA.

Candy Club is able to utilise the data about preferences of subscribers under the B2C Business gathered on its online subscription platform to track shifts in consumer behaviour, to understand what subscribers prefer in real-time, facilitating product and supplier management and minimising stock wastage and can then sell the popular confectionery products through promotional partners and under-served speciality outlets as part of the B2B Business, thereby increasing consumer recognition of the Candy Club brand.

Investment highlights

  • Operates in US confectionary industry with a large addressable market of US$35B in 2017
  • Founder & CEO, Keith Cohn, has 20 years of consumer industry experience, including Vendare Media, which he founded and built into a business with over A$200M in revenue
  • Experienced board, comprising notable early stage investors in the Company with successful track records as investors and operators of prominent Australian and international companies
  • Backed by highly experienced seed and cornerstone investors
  • Proven direct-to-consumer (D2C) subscription business segment generating ~A$11M revenue in CY17, well positioned for further scale
  • Business-to-business (B2B) business segment showing strong early traction selling product to approximately 150 unique specialty market retailers representing 500 retail locations
  • Omnichannel model aims to drive retail purchases in the B2B business segment to become subscribers for the B2C business segment
  • Enterprise value of less than 2x historical revenue, with strong growth potential
  • IPO lead managed by Peak Asset Management

Offer overview

Candy Club Holdings Ltd is looking to raise between $4.5 million and $8 million with the ability to accept an extra $2 million in oversubscriptions and will have an estimated market capitalisation of $32.9 million at maximum subscription. 

The proceeds from the Offer will be used to:

  • increase sales and marketing initiatives in USA for the online subscriptions of the Candy Boxes under the B2C Business and for the Candy Club Branded Confectionery under the B2B Business;
  • automate the Company’s assembly and fulfilment line processes where purchased confectionery is repackaged as Candy Club Branded Confectionery and where the Candy Boxes are sorted and assembled;
  • implement an enterprise resource plan and appropriate computing software in order to facilitate the management of the Company’s business finances, operations and customers relations;
  • expand inventory holdings of Candy Club Branded Confectionery and developing the Company’s own proprietary candy formulations; and
  • fees associated with the listing of the Company and Official Quotation of the Offer Shares.

The Business

Procurement and Packaging

The Company purchases confectionery from various manufacturers based in USA and Europe which the Company rebrands and repackages with the Company’s own branding (Candy Club Branded Confectionery). Confectionery purchased for the Candy Club Business is delivered directly to and stored at warehouses operated by a third party logistics company (Fulfilment Company) in Indiana and Utah, USA.  The Company outsources the repackaging function to the Fulfilment Company which also coordinates the delivery of the final products to the respective customers. The confectionery is first repackaged as Candy Club Branded Confectionery, which may then be sold directly as part of the B2B Business.

The Fulfilment Company also assists with sorting the Candy Club Branded Confectionery into boxes containing up to six varieties of the Candy Club Branded Confectionery (Candy Boxes), which are sold as part of the B2C Business. 

Pictured below are the Candy Club Branded Confectionery

B2C Business

In 2015, Candy Club commenced selling monthly subscriptions of Candy Club Branded Confectionery to consumers throughout the USA.  Consumers who purchase subscriptions via the Candy Club Group’s website receive a package containing up to six varieties of confectionery each month (Candy Boxes).  

While subscriber numbers fluctuate, the Company estimates that there were between approximately 15,000 and 20,000 subscribers during any given month in 2018.

The Company is piloting selling subscriptions of the Candy Boxes through a major online retailer, which offers subscription plans for a variety of digital and physical products to its customers.  Candy Club started selling subscriptions for the Candy Boxes through this online retailer in September 2018.

B2B Business

In mid-2018, Candy Club started selling the Candy Club Branded Confectionery contained in the Candy Boxes to specialty market retailers in the USA, including retailers operating in the hospitality, retail fashion, gift and e-commerce industries. The specialty market retailers purchase the Candy Club Branded Confectionery in bulk based on consumer demand which are sold in their physical or online stores together with their core products.  Since the launch of the B2B Business, the Company has sold product to approximately 150 unique specialty market retailers representing 500 retail locations. Over 50% of total sales recorded to date under the B2B Business have been received as repeat orders from specialty market retailers. Pictured below are the Candy Boxes:

Revenue model

The Company generates income through:

  • the B2C Business, under which the Company sells subscriptions plans for the Candy Boxes, which are delivered to subscribers monthly and contain up to six varieties of Candy Club Branded Confectionery; and
  • the B2B Business, under which the Company sells the Candy Club Branded Confectionery to specialty market resellers in bulk.

Industry Overview

Subscription Services

The Candy Club Group’s operations have historically been based on a subscription retail business model, where individuals located in the USA can subscribe for monthly shipments of confectionery, based on a variety of plan types.

Subscription boxes are becoming an increasingly popular method of purchasing products online, with 15% of e-commerce shoppers estimated to have purchased a subscription for subscription boxes in the 12 months to November 2017. During Q1 2018, it was estimated that 18.5 million Americans visited at least one website offering subscription boxes, representing a 24% year-on-year increase.

Confectionery

The chocolate, sugar and gum categories have each experienced growth in 2017, delivering a 3.6% gain for the global confectionery industry in 2017. Total sales in the USA confectionery industry were US $35 billion in 2017, with the biggest growth category experienced in sugar confectionery which experienced a 3.9% increase in sales from 2016. The USA National Confectioner’s Association, an industry body for the USA confectionery industry, reports that in the USA, confectionery sales increased 1.8% in 2017, up from a growth of 1.2% in 2016, with non-chocolate sales (such as confectionery) leading growth.

The USA is by far the largest confectionery market in the world, accounting for more than 75% of the global confectionery volume share. Household penetration of confectionery was 97.2% in 2017, with the average US household purchasing confectionery 17.4 times per year. The average customer consumes confectionery two to three times a week, with 90% of USA consumers giving confectionery as a gift.

Management and Board

Candy Club Holdings Ltd Board is constituted of directors who have extensive skills and experience in both business operations and governance. The Board has a broad base of experience covering operational, technical, corporate and commercial backgrounds, spanning a number of decades and across a range of different industries. These include:

  • Mr Robert Hines, Director, held a number of Board positions since 2001, including Chairman of Genetraks Ltd, Group Chairman of the CEO Circle, executive director of VeCommerce Ltd and non-executive director of Sportsbet Pty Ltd.
  • Keith Cohn, Director and Founder, has over 20 years of consumer industry experience and has held various executive marketing roles in the industry. Keith co-founded Vendare Media, a digital marketing enterprise, growing it from pre-revenue to approximately $200 million in annual sales. He also founded Bardon Advisors, a digital marketing company focused on high-value search engine marketing, and remained as CEO until it was acquired in 2010 in a deal valued at $30 million.
  • Zachry Rosenberg, Director, is the Founding Partner of Capital Zed, a private growth capital investor based out of Melbourne, Australia, with significant minority investments in Australia, New Zealand, the USA, Hong Kong and the United Kingdom.
  • Chi Kan Tang, Director, Kan is the founding partner of Asia Summit Capital, a private equity firm established in 2014, focused on consumer growth and the technology sector in Indonesia and Southeast Asia.
  • James Baillieu, Director,  previously served as Senior Vice President of Business Development at Aconex Limited (ASX:ACX) and was an early investor in and consultant to Aconex Limited.  James spent more than seven years as a consultant with McKinsey & Co, assisting businesses in Australia and internationally with strategy and operational improvement. James is currently Non-Executive Chairman of BidEnergy Limited (ASX:BID)

Risks

You are encouraged to read the Prospectus carefully as it contains detailed information about the Company and the Offer. Like all investments, an investment in the Company carries risk. As set out in Section 6 of the prospectus, Candy Club Holdings Ltd is subject to a range of risks, including but not limited to insufficient products to meet demand, customer acquisition costs, food safety and hygiene, supply of confectionery and privacy and data risks.

 

 

Section 734(6) disclosure: The issuer of the securities is Candy Club Holdings Limited ACN 629 598 778. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).​

Allocation Methadology

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Bids over $5,000 may be scaled back more heavily. Duplicate bids under the same investment profile, investor name or residential address may be cancelled.​

IPO
Software & Services
$0.25
Size of Offer Up to $7 million
Minimum Bid $2,000.00
Opening Date 11/10/2018
Closing Date 14/12/2018

Update

AXS Group Limited has extended its IPO given changes made to its terms for its proposed listing as requested by ASX. The Company is preparing a Supplementary Prospectus that will be lodged with the Australian Securities & Investment Commission (ASIC) shortly.

AXS remains positive on the group’s revenue outlook and the growth of its client base, as evidenced by the terms reached with Industrial Alliance in Canada as previously announced here.

Introduction

AXS Group Limited (ASX Code: AXS) is a global software provider of hosted, SaaS and cloud-based solutions to clients in the financial services and operates an end-to-end process architecture for clients in the wealth management sector.  The company has a track record of successfully tendering and integrating businesses into its ARMnet software with approximately over 75 third party systems integrations performed for clients with varying customised solutions found. The ARMnet platform uses cognitive processes, including robotic process automation and blockchain techniques to give real time output, reducing time and cutting costs.

AXS provides its clients with a digital transformation through its internally owned and developed software platform, ARMnet. The ARMnet platform is a customer relationship management (CRM) financial product management solution that is built on an industry standard Microsoft dot.net framework. It enables clients to improve business efficiency, productivity and accountability, while lowering the costs and risks in delivering different kinds of financial services solutions. 

On completion of the IPO, AXS Group will complete the acquisition of Axcess Consulting Group Pty Ltd the operating entity, which is a global integrated software solution provider to the finance, insurance and funds sectors and has grown organically and operated for over 13 years.

Offer overview

AXS Group Limited is looking to raise $6.5 million with an option to accept another $500,000 in oversubscriptions and will have an indicative market capitalisation of approximately $25.0 million at maximum subscription.

The proceeds of the offer will be used to:

  • expand the Group’s executive, sales and marketing teams;
  • cover costs of acquisition of Axcess Consulting;
  • provide Working capital; and
  • cover the costs of the offer

AXS client base

AXS provides clients software services for varying business sectors including a strong position in the non-bank software lending market. These clients are geographically spread across North America, Europe and Asia-Pacific region. The business is characterised by strong recurring revenue and high levels of client retention, being approximately 90% since inception. The ARMnet platform is currently used to manage over $100 billion of assets and transactions for clients worldwide.

Key Clients:

Revenue Model

AXS Group Limited revenues are generated by subscription and licensing, maintenance, personalisation and servicing fees, typically charged in accordance with agreed rates set out in service agreements with each respective client. Subscription and licencing revenues are recurring annuity revenue streams that contribute approximately 50% to total revenue.

The table below provides an overview of the types of fees charged by AXS.

Product Modules

Technological advances continue to develop in the back office which now offers the financial services industry the ability to do things more efficiently and cost effectively. The Company is to be a key driver in this market and from its ARMnet technology platform, operates two business lines: Platform Product Solutions and Service Solutions. The platform uses cognitive processes, including robotic process, automation and blockchain techniques to give real time output, reducing time and cutting costs.

AXS product offering is divided into 7 product modules on a subscription basis and 3 user services modules on the ARMnet platform. More modules will be introduced upon identification of further market opportunities with each based on pricing.

Industry Overview

The AXS Group currently focuses on providing its software platform solution to the wealth management industry, which involves businesses that provide investment services and financial advice, with the objective of supporting clients to grow their individual wealth. This includes business processing centres, mortgage providers, trustees, asset managers, family offices, private investor groups, public offer funds, and self-managed superannuation funds (SMSFs). As of June 2016, there were approximately 8,200 active businesses in Australia involved in financial asset investing, and approximately 4,000 superannuation funds (excluding SMSFs). There are almost 600,000 SMSFs, 1,500 charitable trusts that manage investments and over 25,000 active financial advisers.

AXS can be viewed as a provider of disruptive technology in the financial services sector, in which large companies, such as Fiserve and FIS Global, have traditionally dominated. Globally, total Information Technology (“IT”) expenditure is projected to total US$3.7 trillion in 2018, an increase of 4.5% from 2017. Corporate business software use continues to exhibit strong growth, with worldwide software spending projected to grow 9.5% in 2018, and it will grow another 8.4% in 2019 to total US$421 billion.1 Organisations are expected to increase spending on software in 2018, with more of the budget shifting to software as a service (“SaaS”).

Growth Strategy

AXS Group’s growth strategies include:

  • Organic expansion. The Group intends to grow the use of the ARMnet platform and its product and service lines through increased marketing and promotion and the education of existing or new customers by its sales managers.
  • Cross selling of products and services. The ability to acquire companies with leading software capabilities provides the group with the opportunity to cross sell software products across their expanded customer base.
  • Ongoing growth in funds management. Revenues can in some cases be linked to the size and volume of its clients’ underlying funds . In the event that AXS extends the nature of funds administration services beyond that currently offered, it will consider acquiring an AFSL to enable a further widening of its product administration offering.
  • Ongoing growth in superannuation in Australia. The Group believes it can leverage its ARMnet software expertise for super administration.
  • Expansion of operational footprint through acquisition. To accelerate the execution of the Group’s strategy and growth, the Group may make strategic acquisitions of specific software providers or other synergistic businesses.
  • Group business across the broader Asia Pacific, Canada and United States region. AXS will continue to broaden its service offering software solutions into third party administration and business processing centres. This shall include expansion, both domestically and offshore into Europe, Asia and North America.

Board and Management

The AXS Group is led by a well-credentialed and balanced Board and management team with experience in the financial services, information technology and software development industries. This includes:

  • Nick Brookes (Non-Executive Chairman), founder of CCSL Ltd and until recently was the Chairman of Linear Asset Management Ltd.
  • David Grey, Managing Director and CEO -  has over 30 years management, corporate and financial services experience and previously worked with Texas Instruments, AWA Limited, National Benefits Consulting, AM Corporation Ltd, Millinium Capital Group, AMP Superannuation Ltd, CUSCAL, Perpetual Trustees Australia Ltd and Australian Wealth Management Limited.
  • Ivan Colak, Executive Director - co-founder and director of Axcess Consulting with more than 30 years of domestic and global experience in technology services.
  • Andrew Duncan, Chief Financial Officer - is a Chartered Accountant with over 20 years’ experience specialising in forensic accounting, transaction services and was accepted by the Institute of Chartered Accountants as a Business Valuation Specialist. 

Risks

You are encouraged to read the Prospectus carefully as it contains detailed information about the Company and the Offer. Like all investments, an investment in the Company carries risk. As set out in Section 8 of the Prospectus, AXS Group Limited is subject to a range of risks, including but not limited to reliance on key personnel, risk of significant control by Existing Shareholders, replicability of business model or failure to retain existing clients and attract new clients.

 

Section 734(6) disclosure: The issuer of the securities is AXS Group Limited ACN 619 705 207. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).​

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Bids over $10,000 may be scaled back more heavily. Duplicate bids under the same investment profile, investor name or residential address may be cancelled.

IPO
Financials
$0.20
Size of Offer $10 - 12 million
Minimum Bid $2,000.00
Opening Date 13/12/2018
Closing Date 18/12/2018

 

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Applications over $4,000 may be scaled back more heavily.

OnMarket is accepting applications for the Splitit Payments Ltd IPO during the Exposure Period.  

Introduction

Splitit Payments Ltd (ASX: SPT) is a technology company headquartered in Israel providing a cross-border credit card based instalment solution to businesses and merchants. Splitit seeks to provide merchants with a tool to increase the average order value and reduce checkout and cart abandonment and give customers the ability to “buy now and pay later” by utilising their existing credit card without incurring interest, late fees or other fees.  By providing a payment service that is fully integrated into a merchant’s payment system, the Splitit payment option is offered to a customer at checkout and the customer may split the payment of his or her purchase into monthly instalments with no interest fee or credit application based on his or her existing credit or debit card.

Over the past three years, Splitit has expanded internationally into the United States, Europe, Australia and Asia (with more than 310 merchants in 25 countries) and has entered into various strategic partnerships with leading payment processors.

Investment Highlights

  • Flexible, seamless instalment options for customers, allowing retailers to increase sales and reduce cart abandonmen
  • Fully scalable, cross-border and omni-channel platform with ability to process large volumes of transactions
  • Global footprint with more than 301 merchants in 25 countries currently on the Splitit Payment Platform
  • Experiencing rapid growth with number of merchants on the platform having increased by 114% in the year to Q3 2018
  • Not a consumer lender and is not subject to lending regulation
  • Unique technology patented in US, Japan, Singapore and Russia (pending in China, UK and Aust.)
  • Targeting large, global markets, with global non-cash transaction volumes growing by 10.1% from 2015-2016 to US$482.6 billion

Traction

Since release of the platform in 2016, Splitit has experienced rapid growth:

  • increased number of merchants by 114%
  • increased the number of unique shoppers by 281%
  • increased merchant sales by 290%
  • increased merchant fees by 203%

Offer overview

Splitit Payments Ltd has a pre-money valuation of $41.9m. The Company is looking to raise $10 million with the ability to accept oversubscriptions of an additional $2 million, which would provide a post-money valuation of $51.9m if the minimum subscription is met and $53.9m if the maximum subscription is met.  

The proceeds of the offer will be used for the following:

  • Research and development of the payment platform and system integration;
  • Sales and marketing, establishing an Asia Pacific region sales team;
  • Expanding existing customer support;
  • Investigating future alternative funding opportunities;
  • Compliance and security;
  • Working capital; and
  • Costs associated with the Listing and the Offer.

Revenue Model

The Splitit Group’s main source of revenue is derived from transaction fees paid by its merchant clients in relation to customers who utilise the Splitit Payment Platform on their website or in-store (Merchant Fees).

Splitit derives its revenue from merchants via the following business models:

  • Funded model – merchants receive the full purchase price within three business days from the first instalment less the total service fee plus a revenue share from the factoring fee;
  • Basic model – merchants receive payment for the purchase based on the instalment schedule. Splitit provides a monthly invoice for the amounts paid for the previous month (eg 1.5% plus US$1.5 per instalment or 1.5% plus GBP1.00 / EU€1.50);
  • One payment fee if a customer opts to utilise the Splitit Payment Platform without utilising the instalment function, Splitit will provide the merchant with a monthly invoice for the total fees for the previous month.

In addition to Merchant Fees, Splitit and Splitit USA have also entered into various referral agreements with Payment Processors and ISOs pursuant to which Splitit will be entitled to receive a fee upon the successful referral of a merchant.

How it works

The Splitit Payment Platform operates as an intermediate technology layer between a merchant’s platform and its existing payment gateway, being an e-service that runs payment transactions for a merchant. Splitit operates within the payments framework which is established by banks, credit card providers (such as Visa and Mastercard) and Payment Processors.

Splitit’s core technology is patent protected in territories such as the United States, Japan, Russia and Singapore (with pending patents in various jurisdictions including Australia and China) and Splitit intends to maintain its unique offering, being a non-lending instalment technology that does not charge the end-customer late fees, interest or any other fees.

Growth Strategy

Splitit’s growth strategy is focused on the following:

  • Improving the End-Customer Experience and Security Measures the Company intends to
    • continue to focus on the development of the Splitit Payment Platform and improve the integration to merchant websites,
    • maintain compliance and implement internal security systems, and
    • further improve the customer experience by developing additional functionalities and applications, including the Splitit e-Wallet.
  • Sales and Marketingthe Company intends to increase its sales and marketing efforts and increase the awareness of the Splitit brand by
    • expanding its European and United States sales teams and establishing a dedicated sales team in the Asia Pacific region
    • expanding the number of ISOs and Payment Processors
    • engaging in marketing and PR to improve website and e-commerce and conducting events, social media and marketing campaigns
  • Engagement with Large Scale Merchants, POS Software Providers and e-Wallet Providers the Company intends to
    • increase its engagement with large scale merchants,
    • engage with point of sale (POS) software providers to roll-out the Splitit Payment Solution on their POS devices; and
    • engage with e-Wallet providers to integrate the Splitit Payment Solution with their wallet platform and roll-out the Splitit Payment Solution on their wallet.
  • Visa and Mastercard the Company is presently seeking to pursue further opportunities with Visa and Mastercard, including proposed partnership arrangements, to expand the growth and reach of the Splitit Payment Platform.

Board and Management

  • Gil Don (CEO, Managing Director and Co-Founder), has a strong background in technology sales, having worked as VP Sales at We! and Ankor, two leading integration companies. He was also previously a Regional Sales Manager at Dell and Country Manager of Veritas.
  • Alon Feit (Executive Director and Co-Founder), has 25 years of experience in senior management positions for leading credit card and insurance companies in Israel and Brazil. Mr Feit was previously the CEO of Supersal Finance, Ltd – the leading issuer of Visa co-branded cards in Israel.
  • Spiro Pappas (Non- Executive Chairman), senior executive with over 28 years of international experience in banking, capital markets and corporate finance. Senior roles at ABN Amro included Joint Global Head of Capital Markets and Global Head of Corporate Finance and Advisory for Financial Institutions.
  • Thierry Denis (Non-Executive Director), has more than 20 years senior management experience building market leading IT solutions with global electronic payments technology leader, Ingenico.  Mr Denis was recently appointed as a Non-Executive Director at ASX listed TZ Limited (TZL:ASX).
  • Dawn Robertson (Non-Executive Director), has over 30 years’ experience leading companies in both the US, Australia and internationally.  Held positions such as president of Old Navy and managing director of Myer Department Stores, where she developed and executed a new strategy for the $3.2 billion department store.
  • Michael Keoni De Franco (Non-Executive Director), is currently CEO of LifeLua Technologies, a Life BioSciences Company.  Prior to that, Mr DeFranco was the Founder and CEO of Lua, which provides a HIPAA compliant secure messaging and telehealth video conferencing platform for healthcare organisations.
  • Mark Antipof (Non-Executive Director), is an independent consultant with 30 years’ experience in payments and information services.  Mr Antipof spent almost half of his career at Visa with his final role (December 2018) as Chief Commercial Officer responsible for leading all client facing teams in all European markets, with a team present in 23 countries.

Risks

You are encouraged to read the Prospectus carefully as it contains detailed information about the Company and the Offer. Like all investments, an investment in the Company carries risk. As set out in Section 7 of the prospectus, Splitit Payments Ltd is subject to a range of risks, including but not limited including loss of merchant relationships, failure to increase transactions, customers and merchant numbers, protection and ownership of technology and IP and failure or disruption to the payment platform.

 

Section 734(6) disclosure: The issuer of the securities is Splitit Payments Ltd ARBN 629 557 982. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).

Exposure Period

OnMarket is accepting applications for the Splitit Payments Ltd IPO during the Exposure Period.  Applications made prior to the completion of the Exposure Period may be withdrawn.  General applications received during the exposure period will not be conferred a preference over general applications received after the completion of the Exposure Period.  

If a replacement or supplementary prospectus is issued, this will be provided to you along with the opportunity to withdraw your application.

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Applications over $4,000 may be scaled back more heavily. Duplicate applications under the same investment profile, investor name or residential address may be cancelled.

 

Disclaimer: All information on this section is of a general nature. Before making any investment decision, please seek the relevant advice.

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