Afterpay Founders Sell Down Into New Capital Raising

By Glenn Dyer | More Articles by Glenn Dyer

And its fund raisings all-around at buy now pay later service Afterpay Touch – the three founders are pocketing at least $100 million from selling some of their shares to two new US investors while the company itself is asking investors for $300 million to fund its expansion into the United States.

In an announcement to the ASX on Tuesday, Afterpay said it is undertaking a fully underwritten institutional share placement to raise a minimum of $300 million with the sale of 13.8 million new shares at a floor price of $21.75, a 10% discount to last Friday’s closing price.

The company also revealed that two new US investors, Tiger Management and Woodson Capital will join the share register after acquiring a combined 1.9% stake from the three founders, Anthony Eisen, Nick Molnar, and David Hancock.

Eisen and Molnar will sell 2.05 million shares each and Hancock plans to sell 400,000 at a price to be determined by the bookbuild for the institutional placement.

It will yield at least $100 million for the trio who will retain an 8.1% shareholding in Afterpay.

“Our experience to date confirms the US scale-up opportunity is clear, supporting an accelerated investment in the global opportunity,” the company said in its announcement about the $300 million raising.

“We believe that shareholder value will be maximised by focusing on merchant and customer growth across a mid-term three-year plan.”

The three founders have said they will not sell any further shares for another 120 days.

Tuesday’s selldown comes less than a week after Afterpay revealed it was being probed by the financial intelligence agency AUSTRAC for possible breaches of anti-money laundering and counter-terrorism financing laws.

The company confirmed it was “in dialogue” with the regulator in a statement to the ASX on Thursday.

Austrac also confirmed it has been scrutinising the company. “Austrac can confirm it has been working closely, over some time, with Afterpay in relation to AML/CTF compliance issues,” it said.

Afterpay also forced to respond to an ASX query on Friday about the release in the US of an update on its market traction in that market that caused a share price rise in Australia.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →