Afterpay Touch Group Ltd (ASX: APT) may soon be facing another rival on the ASX.
Not only are investors going nuts for Splitit Ltd (ASX: SPT) and Zip Co Ltd (ASX: Z1P) but another business wants to get in on the action as well.
The Australian Financial Review is reporting that US business Sezzle wants to list on the ASX within the next few months. It has raised US$5.6 million before it goes for an initial public offering.
Sezzle may be worried that Afterpay may be about to corner the US market considering how successful it has already been.
As a reminder, in the FY19 half year result Afterpay disclosed that it was on track to have over 1 million active customers and 2,000 active merchants in the US by the end of March 2019. Afterpay has already created a reputation and brand for itself, whereas most people won’t have heard of Sezzle yet.
One of Sezzle’s co-founders admitted to the AFR that it was modelled on Afterpay. At the moment Sezzle is much smaller in terms of customers with only 226,000 active members, but it has a wider distribution with 3,000 merchants.
The reason for the choice of the ASX as the preferred stock exchange is that ASX investors supposedly understand the model better and it could make for easier comparisons between the two companies. I suspect it also means the owners believe they can get a better IPO price.
At the moment Sezzle is only offered online, but it wants to go down a similar road as Afterpay – larger retailers and be an in-store option.
One of the main points about Sezzle is that it also generates most of its revenue from merchants rather than late fees, which are capped at US$10.
We don’t know any information yet about the market capitalisation of Sezzle, how much the company wants to raise and so on. But, it will probably be one to watch if it does end up listing onto the ASX.
The Sezzle share price might rocket on listing, but I would prefer owning businesses that are already making tons of revenue and are making a profit, or close to it, like the ones mentioned in the free report below.
[ls_content_block id=”14947″ para=”paragraphs”]
[ls_content_block id=”14947″ para=”paragraphs”]
