Australian B2B FinTech Tyro Is Bright Spot In IPO Debut

Australian B2B FinTech Tyro Payments recently listed on the Australian Securities Exchange (ASX) and saw its share price increase 29 percent above its IPO price on the first day, according to a report by Finder.

The news is a bright spot on the ASX, as several other recent IPOs have not performed up to expectations. Tyro is Australia’s fifth-largest merchant acquiring bank. Its shares hit a high of $3.55 and closed at $3.38 after opening at $2.75.

The company raised about $287.1 million from its investors before it went public.

Mike Cannon-Brookes, the co-founder of Australian software company Atlassian, has a private investment firm called Grokco, which invested in Tyro. Cannon-Brookes, who owns about 13 percent of Tyro, tweeted a congratulatory message to the FinTech.

Other companies have not been as fortunate. Latitude Financial, Property Guru and Retail Zoo all tried and failed to secure an IPO.

“Tyro certainly stands out from the bunch,” said Jun Bei Liu of Tribeca Investment Partners, who participated as a fund manager in the IPO. “In my view, it’s a standout FinTech that will offer many years of growth organically, without us even making aggressive assumptions.”

Latitude Financial tried for an IPO again in October, adding scrutiny to Tyro as to whether it would be successful.

Liu said Latitude’s failure was not a result of the sector as a whole being sour, but was triggered by the company’s change in leadership, as well as a high introductory price.

“Tyro has been growing organically for many years and [has] proven its ability to take share from the large banks and [offer] services that [are] specially tailored to its merchants,” Liu said.

Tyro’s 2.4 percent market share in the addressable card payment market is expected to rise to 5 percent in the next half-decade.

Julia Lee of Burman Investments said the success shows there is plenty of room in the space for growth.

“Investors are adding in a buffer given some of the large-scale losses globally in IPOs this year, together with it being the late part of a bull investment cycle. Add in the profit warning from new ASX entrant Prospa and investors are understandably wary,” she noted.