Beforepay shares sink 44 per cent on debut

Beforepay’s chief executive Jamie Twiss is holding out hope that the company’s fortunes will turn around, after the “pay-on-demand” start-up had a horror debut on the ASX with its shares plunging 44 per cent from its offer price.

The fintech, which is chaired by former Westpac chief executive Brian Hartzer and gives users an advance on their salary ahead of their typical pay day, raised $35 million from investors at $3.41 a share during an initial public offering late last year.

After a bruising first session on the ASX, Beforepay closed at $1.91. That fall cut the group’s market capitalisation to $90 million, from an expected $158.4 million.

Beforepay has 139,000 users. In the December 2021 quarter alone, the company issued pay advances to the tune of $77 million. Its default rate, which was near 7 per cent in the December 2020 quarter, has dropped down to 3.08 per cent.

“The market is always going to go up and down … we’re not going to try and second-guess what the market is doing or what the share price is doing,” CEO Jamie Twiss told the Sydney Morning Herald and The Age.

“Obviously, we priced the IPO in November and trading conditions have changed quite a bit since then.

“Our focus is very much on running the business day-to-day, and as we build the business as successful, obviously the market will make up its own mind over time.”

Mr Twiss was at pains to differentiate the company from payday lending products or credit card products: Beforepay does not revolve or roll over debt, and does not charge late fees or interest rates, he explained. A customer will only ever be required to pay back its initial cash-out amount, as well as a flat fixed 5 per cent on top of that, which does not increase over time.

“Our product is a more responsible and a very customer-friendly way of helping people who occasionally need to manage their cash flow, week to week or month to month,” Mr Twiss said.