Change Financial shares could rise on $5.72 million fund-raising

ASX-listed fintech company Change Financial could see its share price rise on a fund-raising to accelerate improvements to key products. The global payments processor hopes to use the funds to drive growth in its Vertexon Payments as a Service (PaaS) platform.

$5.72 million fund-raising for product enhancement

On 3 August Change Financial announced a capital raising of $5.72 million primarily for accelerated product enhancement.

According to an official statement, the capital raising will consist of a $4.97 million non-renounceable entitlement offer to eligible shareholders and a $0.75 million placement to new institutions, sophisticated and professional investors.

The capital raising includes sub-underwriting from Altor Capital and $0.4 million from the board and management. It will also involve the participation of new institutional investors.

‘We are pleased to have completed a well-supported placement from our loyal existing shareholders whilst also welcoming several new institutional and sophisticated investors to the register’, said Alastair Wilkie, Change CEO.

Change Financials’ product improvement plans will focus on its Vertexon PaaS solution – one of the company’s flagship offerings.

‘This capital raising will enable us to execute on our growth plans, specifically enhancing our Vertexon Payments as a Service… offering via increased issuing capability and connectivity along with targeted investment into sales and marketing strategies’, Wilkie said.

Change directors agree to entitlement offer

The $4.97 million entitlement offer will see the provision of one new fully paid ordinary share for every four existing shares held. The issue price for the offer is $0.05 per share, for a 10.0% discount to the close price of $0.055 on 16 August 2022.

Four of Change’s directors - Ben Harrison, Alastair Wilkie, Tom Russell and Ian Leijer, have entered general sub-underwriting agreements for a total of approximately $400,000 of the entitlement offer. The offer will be made available on 8 August 2022 and will have a closing date of 25 August 2022.

Change Financial said it had received unconditional binding commitments for the $0.75 million placement to institutional, sophisticated and professional investors.

The placement will involve the issue of around 15 million new shares at an issue price of $0.05 per share.

Settlement for the placement took place on Tuesday 9 August 2022, with the placement shares allotted through the ASX and starting to trade the following day.

Vertexon the focus of product enhancements

Vertexon Payments is Change Financial’s flagship payments solution, consisting of a PaaS platform that integrates with the core systems of clients to provide customers with digital card services. These integrations include Apple Pay, Google Pay, Samsung Pay and BNPL services.

At the time of Vertexon’s launch in Australia in November 2021, Change said the platform had enabled it to manage and process over 16 million virtual, credit, debit and prepaid cards globally. Change was servicing 146 clients in 41 countries, with key clients including ME Bank, BDO Unibank and eftpos Australia.

Cashless payment solutions like Vertexon could see rapid growth in popularity in years to come, especially as the Covid pandemic accelerates the digitisation of finance.

While the digital payments landscape could be intensely competitive, Wilkie sees opportunities for Chance in partnerships with both established financial institutions and upstart fintech companies.

‘Banks and fintechs can tap into immense opportunities by partnering with Change from an integrated payment processing and card management perspective’, Wilkie said.

‘Change can help businesses to issue cards, digital wallets, BNPL services and access major card schemes like Mastercard, VISA and AMEX.’