The Moneyme Ltd (ASX: MME) share price leapt more than 36% this morning after the lender announced the launch of a buy now, pay later (BNPL) solution. The company has launched MoneyMe+, a point of sale payment solution that allows merchants to offer customers a shop now, pay later option up to $50,000. During intraday trade, the Moneyme share price reached as high as $1.47 before being sold down to its current price of $1.27.
What does Moneyme do?
Moneyme is an online lender offering personal loans of up to $50,000. Founded in 2013, it recently surpassed the $500 million in loans milestone. Loans are originated through a risk-based lending platform to tech savvy customers seeking fast and convenient access to credit from mobile devices. Moneyme has made more than 240,000 originations to customers since inception. Loan volumes have accelerated recently, with FY20 accounting for 35% of all lending since inception.
How has the Moneyme share price been performing?
Moneyme outperformed prospectus revenue and loan origination forecasts in FY20. Revenue was up 50% year on year to $48 million, beating prospectus forecast revenue of $45.8 million. Loan originations were up by 52% to $178 million, beating the prospectus forecast of $168.2 million. The Moneyme share price has reflected this success, and is currently up 140% from its March low. Nonetheless, the Moneyme share price remains 33.2% down from its high for the year.
About the Moneyme BNPL venture
Moneyme has positioned its MoneyMe+ product to compete alongside the thriving BNPL distribution channels. The online lender is pivoting its offering to take advantage of consumer demand for instalment-based, merchant funded, interest-free payment solutions. The product roll out is being led by an experienced team of ex-Zip Co Ltd (ASX: Z1P) sales professionals, with 55 merchant partnerships in place.
MoneyMe+ is launching in the solar, healthcare, cosmetics, home improvements, education, automotive, trades services and other sectors. It provides finance of $1000 to $50,000 and interest-free repayment terms from 6 to 48 months with fast online approval at checkout. As at 30 June 2020, MoneyMe+ had a gross loan book of $6 million.
What's next for the Moneyme share price?
Moneyme is expanding its offering beyond the online lending space with the launch of new products. In May, the lender launched its Rent Ready product aimed at landlords. The product is designed to support landlords with capital and operational spend requirements, providing a line of credit up to $15,000 with repayment over 24 months. The company is also planning to establish a new funding facility to support asset growth and lower funding costs. The new facility is expected to be executed in 1Q FY21. The initiatives will see Moneyme expand its potential customer base and improve margins, assisting profitability.
