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U.S. buy-now-pay-later lender Sezzle soars on ASX debut

Australia-listed shares of Sezzle Inc, a U.S. buy-now-pay-later lender, debuted at more than twice their IPO price on Tuesday as it looks to cash in on Australian investors' familiarity with the sector.

Adds sector details, company background

July 30 (Reuters) - Australia-listed shares of Sezzle Inc SZL.AX, a U.S. buy-now-pay-later lender, debuted at more than twice their IPO price on Tuesday as it looks to cash in on Australian investors' familiarity with the sector.

The Minneapolis-based company opened at A$2.50 and was trading at A$2.20 per CHESS Depositary Interest, as of 0234 GMT, compared with an IPO price of A$1.22 a share.

Sezzle, which launched in 2017 and is yet to post a profit, hopes to use the A$43.6 million it raised from the initial public offering to fund growth in North America, according to its prospectus.

Sezzle's Australia listing comes at a time when its larger local peer Afterpay Touch Group Ltd APT.AX has been ordered to conduct an external audit by the Australian Transaction Reports and Analysis Centre over anti-money-laundering laws.

Despite the heightened regulatory attention in Australia, the buy-now-pay-later space is dotted with existing players such as Zip Co Ltd Z1P.AX, FlexiGroup FXL.AX and Splitit Ltd SPT.AX.

The broader market .AXJO traded 0.4% firmer.

Afterpay's climb from a A$1 per share listing in 2016 to Monday's close of A$27.18, with the Australian company sitting at a market value of nearly A$7 billion ($4.83 billion), reflects investor confidence.

Sezzle, which only operates in the United States and Canada, said expansion plans are dependent on its performances in these two markets.

Buy-now-pay-later companies offer customers an alternative form of credit by letting them buy products in installments, especially to a burgeoning population of millennials worldwide, but this form of lending lacks the rigorous oversight that more orthodox forms of lending face.

($1 = 1.4480 Australian dollars)

(Reporting by Nikhil Kurian Nainan and Aby Jose Koilparambil in Bengaluru; Editing by Stephen Coates and Sherry Jacob-Phillips)

((NikhilKurian.Nainan@thomsonreuters.com; +91 806 749 1637; Twitter: @NikhilKurianN))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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