Westpac sinks AU$40m into Zipmoney
Westpac has entered into a "strategic" relationship with Australian-listed payments firm Zipmoney, investing AU$40 million by way of a private share placement.
The agreement allows both parties to explore the integration of the fintech's products and services across Westpac's network throughout Australia, as well as other initiatives including the provision of in-development business-to-business products and services, the companies said in a statement on Monday.
The funding injection will be made by way of a AU$40 million ordinary equity investment comprising the subscription of 49,382,716 fully-paid ordinary Zipmoney shares at a price of AU$0.81 per share, representing a 14.1 percent premium to the last closing price of AU$0.71 per share, and an 18.4 percent premium to the two-month volume weighted average price (VWAP) of AU$0.68 per share -- both as at August 4, 2017.
The Zipmoney board has also agreed to appoint an additional non-executive director to be nominated by Westpac.
"Westpac is excited to be working with one of Australia's leading fintechs with a strong vision for the future of payments in Australia," said Westpac group executive of Strategy & Enterprise Services Gary Thursby.
"Our strategic relationship with Zip is another example of Westpac's commitment to supporting leading Australian entrepreneurs and fintechs who are looking to bring great new capability to Australian consumers."
Thursby praised Zipmoney's real-time data analytics and proprietary platform and said Westpac is looking forward to working with the company to further develop and offer the capabilities to its customers, including more choice in the "changing payments landscape".
It is expected Zipmoney will spend the funding on company growth and the development of new products and technologies, including enhancing its data science and proprietary "decisioning" capabilities, as well as supporting the growth of the Zipmoney loan book.
The funding from Westpac follows a AU$260 million asset-backed securitisation warehouse program that was led by the National Australia Bank (NAB) in May.
NAB invested AU$200 million of the total to fund the facility.
For the 2017 financial year, Zipmoney reported an operating loss of AU$7.5 million, off the back of AU$17 million in revenue.
On partnering with startups, Westpac recently joined a consortium comprised of Australia Post, EnergyAustralia, Optus, and others as founding members of CoVentured, a platform looking to connect corporates with startups that can help solve some of their innovation challenges. The bank also joined a blockchain proof-of-concept under development by financial messaging service SWIFT.
Westpac reported interim cash profit of AU$4.02 billion for the six months ended March 31, 2017, up 3 percent from the AU$3.9 billion reported in the previous corresponding period.