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White-label buy-now pay-later (BNPL) company Limepay may have failed in its initial public offering (IPO) attempt in 2021, but the Sydney-headquartered company will soon have an indirect ASX presence thanks to an acquisition from fintech Spenda (ASX: SPX).
Spenda has executed a binding term sheet to acquire all shares in Limepay, now trading as April Solutions, in exchange for $8 million worth of SPX shares to be issued in four tranches.
The deal represents significant dilution for Spenda which is only worth $30 million itself, but the addition is expected to tack on at least $7.2 million in annual recurring revenue (ARR) to the group which provides electronic payment solutions across supply chains and trading networks.
The $8 million sum is worth less than a fifth of the $43.5 million raised by Limepay as per records registered with the corporate regulator, which included $30 million raised in 2020.
Co-founder and then-chief revenue officer Daniel Peters left the company as it was on the cusp of the planned IPO that fell through, but its other co-founders - Tim Dwyer and Josh Edis - remained with the business, including through the rebrand to its new name April in 2022.
Edis stepped aside from his position as chief commercial officer at the end of that year but remained as a board advisor until December 2023, while Dwyer remains a director with a holding of around 30 per cent of the shares on issue.
According to records with the Australian Securities and Investments Commission (ASIC), just over half the shares in Limepay are currently held by Perpetual Corporate Trust.
Now used by more than 200 businesses, Limepay's payment process and embedded finance services generated unaudited revenue of $2.8 million in FY24 and a gross profit of $1.4 million.
Spenda is encouraged by Limepay's strong pipeline of new customer acquisitions, and it hopes the company's enterprise level clients will take up Spenda's products suite as well.
Limepay's technology is also anticipated to speed up Spenda's ability to execute on key customer contracts such as Carpet Court and Capricorn.
"This is a high value acquisition for Spenda that brings product capability, exceptional people, great customers and many opportunities to work together to drive revenue growth," says Spenda managing director Adrian Floate, who was also a co-founder of Pet Megastore Australia.
"The combined entity will have an expanded product suite that will enhance its competitive positioning in market and enable access to new customers and market verticals.
He says the two companies have "complementary product roadmaps", and together they will be able to scale payment flows across the combined entity and likely increase wallet share per customer.
"From an operational perspective, the addition of a high-quality team of banking software engineers will accelerate our current project pipeline and improve our operational efficiency," he says.
Limepay director and co-founder Tim Dwyer says he is extremely excited about the opportunity to create a leader in the embedded finance space by integrating with Spenda and its management team led by Floate.
"I believe it will be a great cultural fit for both our organisations and we’re excited to be part of Spenda’s next chapter, I believe the transaction will position us to execute significant business opportunities and create a leading payments company for enterprise customers," he says.
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