IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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<p><a href="https://www.smartkarma.com/entities/finaccel-pte-ltd" target="_blank" data-smartkarma-citation="entities:33791:1" rel="noopener">FinAccel (1411023D SP)</a>, the parent of Kredivo, is the leading buy now, pay later (BNPL) platform in Indonesia with an e-commerce BPNL market share of around 40%-45%. Kredivo intends to go public in the US through a SPAC merger with VPC Impact Acquisition Holdings II.</p><p>The combined company will have an EV of $2.0 billion and an equity value of $2.5 billion at closing. The deal implies 6.3x 2022 EV/Sales based on Kredivo’s forecasted revenue. The transaction involves a 100% rollover by existing Kredivo shareholders, a $120 million fully committed PIPE (led by Marshall Wace, Corbin Capital, SV Investment, <a href="https://www.smartkarma.com/entities/palantir-technologies-inc" target="_blank" data-smartkarma-citation="entities:27728:1" rel="noopener">Palantir Technologies Inc (PLTR US)</a>, Maso Capital, and sponsor Victory Park Capital) in addition to a $55 million convertible note funded by existing investors <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a> and Square Peg. Kredivo is expected to receive over $430 million of gross proceeds. Existing shareholders will have an 83% ownership of the combined company including the concurrent investment. </p><p>The BNPL market is rapidly becoming a must-have product for payment providers. This necessity has spurred the launch of in-house solutions from global payment providers such as <a href="https://www.smartkarma.com/entities/paypal-holdings-inc" target="_blank" data-smartkarma-citation="entities:4747:1" rel="noopener">Paypal Holdings (PYPL US)</a> as well the M&amp;A as evidenced by <a href="https://www.smartkarma.com/entities/square-inc" target="_blank" data-smartkarma-citation="entities:23755:1" rel="noopener">Square Inc (SQ US)</a>'s bid for <a href="https://www.smartkarma.com/entities/afterpay-limited" target="_blank" data-smartkarma-citation="entities:26940:1" rel="noopener">Afterpay Touch (APT AU)</a>.  </p><div class="content-highlight"><p>Since its launch in 2016, Kredivo has established itself as a leading BNPL player in Indonesia due to sustainable competitive advantages built around an in-house credit bureau and low customer acquisition costs. Kredivo is not resting on its laurels but increasing its addressable market through international expansion in adjacent countries and the launch of a new business line (Lime). Kredivo is using its market-leading position to deliver high growth with a declining loss margin. Refreshingly the YTD performance suggests that management are well on track to meet their forecasts. Finally, the proposed valuation is also attractive in comparison to global BNPL peers. </p></div>

FinAccel (1411023D SP), the parent of Kredivo, is the leading buy now, pay later (BNPL) platform in Indonesia with an e-commerce BPNL market share of around 40%-45%. Kredivo intends to go public in the US through a SPAC merger with VPC Impact Acquisition Holdings II.The combined company will have an EV of $2.0 billion and an equity value of $2.5 billion at closing. The deal implies 6.3x 2022 EV/Sales based on Kredivo’s forecasted revenue. The transaction involves a 100% rollover by existing Kredivo shareholders, a $120 million fully committed PIPE (led by Marshall Wace, Corbin Capital, SV Investment, Palantir Technologies Inc (PLTR US), Maso Capital, and sponsor Victory Park Capital) in addition to a $55 million convertible note funded by existing investors Naver Corp (035420 KS) and Square Peg. Kredivo is expected to receive over $430 million of gross proceeds. Existing shareholders will have an 83% ownership of the combined company including the concurrent investment. The BNPL market is rapidly becoming a must-have product for payment providers. This necessity has spurred the launch of in-house solutions from global payment providers such as Paypal Holdings (PYPL US) as well the M&amp;A as evidenced by Square Inc (SQ US)'s bid for Afterpay Touch (APT AU).  Since its launch in 2016, Kredivo has established itself as a leading BNPL player in Indonesia due to sustainable competitive advantages built around an in-house credit bureau and low customer acquisition costs. Kredivo is not resting on its laurels but increasing its addressable market through international expansion in adjacent countries and the launch of a new business line (Lime). Kredivo is using its market-leading position to deliver high growth with a declining loss margin. Refreshingly the YTD performance suggests that management are well on track to meet their forecasts. Finally, the proposed valuation is also attractive in comparison to global BNPL peers. 

FinAccel/Kredivo SPAC Deal: Smooth Shopping

Singapore

FinAccel Pte. Ltd. operates as a financial technology company. The Company offers software products which enables instant point of sale (PoS) financing for ecommerce merchants. FinAccel serves customers in Singapore and Indonesia.

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Kredivo (1411023D SP)

FinAccel/Kredivo SPAC Deal: Smooth Shopping

Kredivo is using its market-leading BNPL position to deliver high growth with a declining loss margin. Refreshingly the forecasts are reasonable...

Arun George

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