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