Australian Fintech MoneyMe (ASX:MME) has raised A $37 million in equity capital, according to a statement by the company. MoneyMe is a digital lender serving consumers.
It was reported earlier this week that MoneyMe founder and CEO Clayton Howes was seeking to raise capital in a difficult market. The funding comes at an important time as a short-term loan used to acquire SocietyOne was due in the coming months. Shares were halted last week, pending the news.
The fully underwritten share placement was priced at A $0.08 per share, issuing approximately 462.5m new ordinary shares. The offering price represents a 24% discount to the last traded price on 20 March 2023 of A $0.105.
The money will be used to pay down A $32 million of the company’s corporate debt facility with the balance supporting operations.
Howes issued a statement on the news indicating retail investors will have the opportunity to invest A $5 million on the same terms as the institutional funding.
“The support from new and existing investors despite extremely tight capital markets underpins their confidence in our profitable business model, unique tech-driven advantages, and ability to execute on our strategic vision. The proceeds from the equity raising will be used to repay the short-term component of our corporate debt facility that was used to finance the SocietyOne acquisition, and in turn remove the associated concerns that contributed to the significant downward pressure on our share price recently. This repayment will also support our focus on increasing profitability through circa $7m in annualised savings,” said Howes. “The raise will also further strengthen our balance sheet and unrestricted cash balance and support measured growth and the pursuit of the significant opportunities ahead of us. I am very proud of our business and our team’s ability to execute successfully on our strategy to combat the challenging times for the sector. We have proven an ability to grow, adapt, and deliver profit, while also launching industry-disrupting, hard-to-replicate innovations.”
Howes predicted a better year reporting NPAT of A $9 million in 1H23 and another A $7 million during January and February 2023.
“…we project a strong year for the business.”