ASX-listed Buy-now-pay-later (BNPL) fintech Openpay has been placed in receivership after it failed to bank working capital from its main backer.
The payment platform has been shut down, effectively sealing the company’s fate.
The collapse comes a week after the company’s quarterly results on January 31, which signaled delays in receiving capital from AH Meydan Pty Ltd.
McGrathNicol joins forces with Barry Kogan, Jonathan Henry and Rob Smith (curators and managers) of Openpay Group Ltd (ASX:OPY) (Company) and Openpay Pty Ltd on Saturday, February 4, after the company filed for a trading freeze on its shares last Wednesday . Separately, they were also appointed as receivers of Openpay SPV Pty Ltd and certain assets of Openpay Pty Ltd by Amal Security Services on February 3.
Openpay director Yaniv Meydan resigned from the board on Saturday.
In a statement following their appointment as trustees, McGrathNicol said customers can no longer use the Openpay platform for new purchases, but are still required to pay any outstanding balances as part of their existing contract.
“The trustees and managers will work closely with Openpay’s employees, vendors and customers to determine the right strategy for the company as quickly as possible,” said McGrathNicol.
Openpay was listed on the ASX in December 2019 at $1.60 per share, raising $50 million for a market cap of $150 million. It then raised another $33 million in June 2020 through an institutional equity placement.
From a peak of $4.70 in August 2020, Openpay’s share price fell below $0.50 cents 12 months ago languished at $0.20 cents when a trade was suspended last week
By this time last year, it had expanded into the US and with the December quarterly release last Tuesday, it painted a positive picture before suddenly imploding.
In the second quarter of FY2023, total transaction volume (TTV) increased 45% from 12 months earlier to $126 million. Quarterly revenue grew $59 to $10.1 million. Active plans increased 40% to 2.1 million and active customers increased 15% to 347,000.
“We are pleased to announce that Q2 has set new records in terms of TTV, revenue and other key leading indicators,” said CEO Dion Appel.
“This is a result of continued consumer demand for our differentiated offering of longer, larger payment plans. Our improved sales margins show that consumers and merchants are willing to pay for that extra value as the cost of living rises.”
But amid the ‘record’ headlines, operating cash flow revealed continued burnout, with -$18.2m in the red for the quarter and -$37.87m for the first half of FY23. Openpay ended the calendar year with $17 million in cash and cash equivalents. From $152 million in financing facilities, Openpay had $41 million left to call on. Of the $42.5 million in working capital facilities, only $7.5 million remained as of December 31.
The company last November doubled funding of its receivables from $55 million to $110 million through existing financier GCI Commercial Finance Fund and Fortress Investment Grou. , and beyond.” About $85 million of that facility had been used.
On Friday, after AH Meydan’s funds failed to materialize, the company asked for an extension of its trading freeze saying, “By not paying the usage notice, which expires January 31, 2023, the company has breached its covenants. in loan agreements with the company’s senior secured lenders.”
When Openpay’s collapse leaves merchants is unknown. The company had deals with the likes of Officeworks, Kogan, Nissan and Ford Australia, targeting higher value purchases compared to rivals such as Zip and Afterpay. It targeted the automotive, healthcare, retail, home improvement and education sectors and offered B2C installment plans ranging from 2 to 24 months for transactions up to $20,000. The B2B platform, OpyPro, was a SaaS solution for merchants to manage their trading accounts.
Openpay’s collapse follows New Zealand’s BNPL Laybuy last week saying it would delist from the ASX.