Afterpay's Touch Ventures (ASX:TVL) leaps 50% on ASX debut

The latest addition to the ASX has connections with Afterpay.

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A man and woman touch knuckles signifying success in their venture.

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Another company has successfully joined the ASX boards on Wednesday. Touch Ventures Ltd (ASX: TVL), formerly known as AP Ventures, is now a bonafide ASX-listed company.

Shortly after listing at 11am, the Touch Ventures share price eclipsed 74 cents – setting an intraday high.

Investors have taken to Touch Ventures' shares like ducks to water. Perhaps there is some speculation over it following in the successful footsteps of its substantial shareholder, Afterpay. Regardless, it's worth taking a quick look at the path so far for the listed investment company.

Touch Ventures opens up ASX opportunities

Unlike its largest shareholder, Touch Ventures is not directly operating in the buy now, pay later (BNPL) space. In fact, the company isn't operating in any sector directly. Instead, Touch invests in startups both in Australia and internationally.

Specifically, the company tends to invest $10 million to $25 million (sometimes more) in unlisted companies in the retail innovation, consumer, finance, and data segments. Its objective is to invest in such companies during their growth stage.

Essentially, ASX-listed Touch Ventures seeks to find similar businesses to what Afterpay was before its initial public offering (IPO) and capture the upside in its rise to prominence – or at least that's what is hoped for.

Currently, the portfolio of investments consists of 5 companies including Sendle, Happay, PlayTravel, Basiq, and Postpay. Around $75 million has been poured into these various investments. However, the goal is to expand this to 8 to 10 companies in the short to medium term.

Afterpay will maintain a close relationship with Touch Ventures under a collaboration agreement. This means the $35 billion BNPL company will, at its discretion, refer opportunities on and potentially provide expertise to Touch Ventures. The company would be financially motivated to do so, with it holding a 24% stake in the newly debuted company.

What's next?

Touch Ventures now holds $100 million in funds following the successful capital raise from its IPO offer. The company will likely use these funds to invest in its next round of opportunities.

Following its ASX listing, there isn't much of a hint where Touch Ventures plans to invest next. However, the company did take part in a recent funding round held by Refundid. This Aussie startup brings the buy now, pay later model to refunds.

For now, shareholders of Touch Ventures can rejoice in a mighty first day of trade on the ASX. Since peaking this morning, Touch Ventures shares are now trading at 51 cents apiece.

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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