Sezzle, a loss-making U.S. buy-now-pay-later donor, plans to index in Australia braving heightened scrutiny of the sector there after the financial crime watchdog ordered an audit of prime native rival Afterpay Contact Group.
Minneapolis-based Sezzle desires to raise A$43.6 million ($30.36 million) by selling a fifth of the firm in an initial public offering subsequent week and use the proceeds to fund development in North America, based on its prospectus.
The listing comes after the Australian Transaction Reviews and Analysis Centre (AUSTRAC) decreed an external audit of Afterpay for suspected non-compliance with anti-money-laundering legal guidelines.
Legislators in Australia have further required stricter regulation of buy-now-pay-later firms, which let customers purchase products in installments, without having to go through the scrutiny of applying for a credit card or a mortgage.
He added that most corporations that went public in 2018 had been “pre-profit, so I feel nothing is outstanding about our opting to do so as well.”
Most of the earnings of buy-now-pay-later lenders come from charging retailers a commission, with the promise that it’ll appeal to buyers wary of the failings of current credit score lending.
Sezzle only operates in the US and Canada and said more expansion depends on how well they do in those two markets.
An Australian listing makes sense because Sezzle might struggle for connection with U.S. fund managers, said Andrew Mitchell, a senior portfolio supervisor at Ophir Asset Management, an early investor in Afterpay that still holds an investment.
Australia already has a bunch of listed buy-now-pay-later lenders, along with Zip, FlexiGroup, and Splitit.