The funding will reportedly be used to accelerate Splitit’s growth and to facilitate the execution of its strategic plan. The USD 50 million amount will be divided into two USD 25 million tranches in exchange for the issuance of new preference shares.
As per the official press release, the first tranche will be invested following Splitit’s voluntary delisting from ASX and after the relocation of the company from Israel to the Cayman Islands. The second tranche will be provided after Splitit achieves specific financial milestones for the year 2023 and upon meeting certain customary closing conditions.
The reasons behind Splitit’s Board decision to accept this funding plan were also shared as part of the official statement. Firstly, Splitit recognises that obtaining access to substantial growth capital is crucial in the midst of a challenging fundraising climate. By leveraging this funding, the instalment service provider anticipates that it will enhance its standing, draw in clients and partnerships, and enable it to allocate funds to advance its white-label technology platform.
Moreover, the instalment service provider agreed to delist from ASX, as its Board considers that the business is undervalued by its listed enterprise value. This is reportedly due to insufficient liquidity, coupled with the recognition of Splitit's distinct value proposition and future potential.
When it comes to the changing of the company’s location to the Cayman Islands, the official release adds that, following the move, Splitit is anticipated to benefit from reduced administrative expenses, a more adaptable operational landscape, and an enhanced opportunity to secure future growth funding at a favourable valuation.
Splitit’s existing shareholders will purportedly be offered the option to either maintain ownership within Splitit as a privately held entity or diminish their ownership through trading on ASX before it is delisted. Furthermore, building on this aspect, subsequent to being delisted from ASX, Splitit is anticipating a collaboration with a private equity trading firm, PrimaryMarkets, to facilitate periodic trading in Splitit.
A representative of Splitit expressed that the company was pleased to have secured a significant capital commitment from a private equity sponsor. They further added that Motive is a partner that can help them drive future value creation because of its payments expertise, its value-driven capabilities, and strong industry connections.
When it comes to its network, Splitit uses the established global credit card payment infrastructure, incorporates instalments during checkout, and enables networks to participate in the value-chain of instalment payments.
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