Asian fintech firm MoneyHero on Friday fell on its first day of trading on the Nasdaq, following the completion of its merger with special purpose acquisition company Bridgetown Holdings.
Bridgetown Holdings Limited is backed by Thiel Capital – PayPal co-founder Peter Thiel’s enterprise capital firm – and Pacific Century Group, a personal investment group founded and chaired by Hong Kong tycoon Richard Li.
MoneyHero’s recent U.S. shares opened near $5.39 on Friday but quickly dropped to roughly $3.39 in morning trade. Bridgetown Holdings’s shares closed 4.06% lower at $6.15 on Thursday.
SPACs are shell corporations that raise capital in an IPO and use the money to merge with a personal company with a purpose to take it public, normally inside two years.
“There may be a bigger appetite for capital markets within the U.S. than in Asia and the U.S. investors are searching for access to Southeast Asia region,” MoneyHero CEO Prashant Aggarwal told CNBC ahead of the listing.
MoneyHero plans to make use of proceeds of as much as about $100 million to “further speed up growth and capture a fast-growing market opportunity” within the digital distribution of economic products in Southeast Asia.
The cope with Bridgetown valued MoneyHero at roughly $310 million, based on an announcement on Thursday.
Founded in 2014 and dual-headquartered in Singapore and Hong Kong, MoneyHero Group – formerly referred to as Hyphen Group or CompareAsia Group – operates online financial comparison platforms with product comparison tools that recommend services reminiscent of bank cards, personal loans, mortgages and insurance to readers.
Across five markets, MoneyHero operates personal finance web sites Singsaver and Seedly in Singapore, Moneymax in The Philippines, MoneyHero in Hong Kong, Money101 in Taiwan and CompareHero in Malaysia. Singapore is the firm’s largest market, followed by Hong Kong and The Philippines, said Aggarwal.
MoneyHero Group has yet to grow to be profitable. Its unaudited net loss after tax for the 2 years ending Dec. 31 2021 and Dec. 31 2022 were roughly $31.0 million and $49.4 million respectively.
In its SEC filing, MoneyHero outlined a “clear path to profitability” from a company-wide reorganization, operational and management efficiency and reduction in operating costs.
“These actions have had a positive impact on our financial performance within the second half of 2022, and we expect this trend to proceed in 2023 and beyond,” the filing said.
In November, MoneyHero Group, or Hyphen Group before the rebranding, laid off employees and saw the departure of its CEO.
“We took cost reduction measures in Q3 and Q4 2022 which was very much according to what was happening within the tech industry. We closed down an unprofitable market which was Thailand. We reallocated resources, improved our marketing capabilities and we stopped specializing in just driving top line,” said Aggarwal.
MoneyHero says it currently works with 270 financial institutions, which incorporates banks and insurance firms, and saw 9.1 million average monthly unique users through the first six months of 2023.
“These are users who’re coming on our web sites searching for answers. Our objective is to simplify the complexities of economic products and connect these users to the providers,” said Aggarwal, who has held executive positions at Visa and American Express.
The firm earns a fee every time a consumer signs up for a service with the financial institutions, said Aggarwal, without specifying rates. The firm posted $68.1 million in revenue for 2022.
“We’ve demonstrated to our investors that this business model can turn profitable. We do intend to proceed investing in future growth because we still feel we’re scratching the surface. There may be numerous opportunity in Southeast Asian markets that we’ve proven that we’ve not fully captured yet,” said Aggarwal.
Uncertainty
MoneyHero is listing at an uncertain time where corporations contend with high inflation, rate of interest hikes, concerns for the banking sector, and volatile markets. Unlike the stock frenzies of 2020 and 2021, several corporations have postponed their IPOs since 2022, taking a wait-and-see approach.
The SPAC market experienced a 76% decline within the variety of IPOs in the primary half of 2023 in comparison with the identical period a yr ago, based on a report by financial and risk advisory firm Kroll.
Vietnamese electric vehicle maker VinFast and Southeast Asia’s real estate portal PropertyGuru have fallen greater than 50% from their IPO share prices, since listing via the SPAC route within the U.S. in August this yr and March 2022 respectively.
On why the firm is launching its IPO right now, Aggarwal said “there isn’t any good or bad time.”
“An issue that comes up quite a bit is: why now? And my response is: why not? Who knows the longer term about what the market conditions are going to be? The one thing I do know is I’m confident that my organization has reached the extent of maturity, that we generally is a publicly listed company,” said Aggarwal.
This yr, the highly-anticipated IPOs of Instacart and Birkenstock have been underwhelming, while chip maker Arm has sank greater than 18% since its September debut.
