Afterpay Ltd (ASX: APT) shares are in the headlines again today with the buy now, pay later business eyeing an initial public offering (IPO) for Touch Ventures.
What is Touch Ventures?
Touch Ventures is going to be the new name for AP Ventures.
AP Ventures is an investment vehicle where Afterpay is the largest shareholder. It aims to create long-term value for its shareholders by investing in high growth companies. According to the AP Ventures website, Afterpay owns/owned 44% of this business.
AP Ventures says:
AP Ventures provides high growth, scalable companies that have proven revenue models with access to capital and, where appropriate, Afterpay's experience, merchants and customers. Particular areas of interest includes retail innovation, consumer and finance, and data with a preference for businesses that are or can expand globally.
We target making investments of $10m+ and are interested in post revenue and later stage companies looking to scale. While not generally our focus, we may from time to time pursue early stage opportunities where there is a strong strategic rationale.
Planning for an IPO?
According to reporting by the Australian Financial Review, Touch Ventures is working on a plan to IPO and list onto the ASX. It is currently pitching to potential institutional investors to try to raise $100 million.
It could start trading on the ASX by the end of September 2021, with a listing price of $0.40 per share.
The AFR said that Afterpay has already agreed to invest $10 million into the raising and current shareholder Woodson Capital is expected to participate in this raising as well. Touch Ventures directors are also expected to take part to the tune of a few million dollars.
The newspaper also reported that Alex Waislitz's Thorney Investment Group is likely to participate and become a substantial investor in the business.
Investors are being told that AP Ventures has already invested more than $75 million in five companies, including two buy now, pay later companies – Happay in China and Postpay in the United Arab Emirates.
It was pointed out that the biggest investment that Touch Ventures has made is a US$25 million investment for 10% of Sendle, which is a competitor to Australia Post.
A final interesting point that the AFR reported was that Touch Ventures may invest around 5% of the new funds into earlier stage investments.
Afterpay share price snapshot
Afterpay shares are down around 2% at the time of writing, but since 30 July 2021 it has gone up 37% after receiving an all-share takeover offer from global payments giant Square Inc (NYSE: SQ).
