Afterpay-backed group leads IPO roundup

The Afterpay-backed Touch Ventures (ASX:TVL) formally joined the ASX last week, raising $100 million at 40 cents a share. The new listing is backed by the Buy Now Pay Later platform, which has 24.3 per cent stake, originally 44 per cent. Shares listed at 40c and rose by 40 per cent to 74 cents before pulling back to 50.5c. It’s been a successful listing for Touch Ventures, with much of the success attributable to the success its substantial shareholder, Afterpay, was able to generate for its own shareholders.

The company is a venture capital firm that provides scalable start-ups with access to capital, typically by investing $10 million to $25 million to fund operations and future growth. The team actively searches for start-ups that operate in retail innovation, consumer, finance, and data with a preference for businesses that are or can expand globally; ultimately fitting with what Afterpay did best.

According to the Australian Financial Review, the company has already invested some $75 million in five companies, which include two BNPL platforms and fintech Refundid, dubbed “Afterpay for refunds.” It has assessed roughly 220 potential opportunities since the start of 2020, with almost half of them coming from the fintech sector. It primarily seeks out start-ups that can leverage Afterpay’s ecosystem.

So far, the ASX has witnessed as many IPOs in 2021 than the previous two years combined. There were 125 new ASX listings to September, and these have risen by 28% on average, with another quarter of the year to go. The previous two years saw just 60 listings each in comparison to the 125 delivered so far. Two listings in September which have risen more than 150 per cent are: Li-S Energy (ASX:LIS), which builds durable and better performing lithium batteries; and Zoom2u Technologies (ASX:Z2U), a logistics software stock connecting its customers to drivers.

Major listings exceeding $1 billion in market capitalisation have been:

• Pexa (ASX:PXA)
• Latitude Group (ASX:LFS)
• 29 Metals (ASX:29M)
• Pepper Money (ASX:PPM)

Upcoming IPOs

• RAM Essential Services Property Fund – Will be the second largest real estate fund IPO of the year, looking at a $356.9 million listing on the ASX. According to the AFR, “the fund would own 33 properties on listing, including sites leased to private hospitals group Healthecare and supermarket chains Woolworths and Coles, with a $706.3 million portfolio value as at August 31.”
• Judo Bank is looking at an IPO listing by the end of the year, likely to be between $650m-$750m. Goldman Sachs is valuing the IPO at around $1.7bn and $2.3bn. Judo Bank is an Australian lender to small and medium-sized businesses.
• Copper miner Austral Resources (ASX:AR1) is listing in early November, and raising $30 million.

Ishan Dan

Ishan is an experienced journalist covering The Inside Investor and The Insider Adviser publications.