SME invoice financing startup Butn set to go public in $20 million ASX listing

Aussie invoice financing fintech Butn is set to list on the ASX tomorrow in a $20 million float, giving it a market cap of $80 million on debut.

Headed up by co-founders and co-chiefs Rael Ross and Walter Rapoport, Butn offers advances on payments for small businesses, including on commissions and invoice payments, through a platform integrated into their existing CRMs.

Trading under the code BTN, the startup is set to raise $20 million, with a share price of $0.50. On launch, that will give the business a market cap of $80 million.

Since launching in 2015, the business has financed more than $500 million in business transactions. Last year, it launched its fintech solution designed to digitise the whole process, including onboarding, credit and risk assessment, funding and collections.

In February this year Butn raised $12.5 million in pre-IPO funding and finalised a partnership with food delivery platform Easi, giving drivers and riders the option to receive their pay through the platform on the same day.

In April, the startup partnered with MYOB, integrating the product into the MYOB ecosystem to offer small business customers quick and easy access to invoice financing solutions, and help them manage their cashflow.

Through the IPO, MYOB is set to increase its stake in the fintech to 19.9%.

Speaking to SmartCompany, Ross says the time was right to list the business, as it seeks to ride the momentum of its growth over the past 12 months or so, onboarding more small businesses and platforms as partners.

“Butn was built as a partnership model. We’re seeing a lot of businesses are really bouncing back post-COVID,” he explains.

The current lockdowns in Sydney and Queensland have highlighted the need for digital solutions for businesses. Butn “sits where the business transacts”, Ross says.

External events such as the COVID-19 pandemic have led to a period of strong growth. The prospectus says the startup saw a 58% increase in originations and a 47% increase in revenue in the 2020 financial year.

Ross declines to go into much more detail, but he does say both the pipeline of partnerships and user base growth are going strong.

“We want to be able to access the capital markets, the debt markets to help us with that growth going forward,” the founder explains.

“The best way to do that is being listed.”

Ahead of the game

Over the next six to 12 months, the focus for Ross and the team will be on that “platform partner pipeline”, Ross says.

That’s how they can get the product to businesses that need it as quickly as possible.

Beyond that, Ross suggests there will be some new products on the way. And the chief executive is starting to think internationally.

Some of Butn’s platform partners already have a presence overseas.

As the tech was built to be agnostic, it can be plugged in or overlaid to any third-party platform.

“As long as there’s a platform with end users on it that are businesses, our technology can facilitate funding for those end users.”

This is just the latest IPO in the buzzy Australian fintech sector, and particularly the buy-now-pay-later space.

Ross doesn’t necessarily consider Butn a BNPL player. It’s a B2B offering, not playing in the consumer space, and it has a suite of products designed to support small businesses with funding.

It’s also a “transactional funder”, he says, charging a fixed fee per transaction.

However, he notes that Australian consumers and businesses alike are typically early adopters of tech.

“They’re interested in seeing the latest products out there, and the latest technology.”

In Butn’s case, Ross says business owners want to know about products that can help them run their business, simplify the way in which they access funding, and improve their time to market.

“It makes sense that Australia is really ahead of the game … in this funding space,” he says.

“That’s what businesses and users are crying out for, and we’re filling that need.”