Afterpay challenger Splitit up 90 per cent on first day of trade

Israeli fintech start-up Splitit has got the tech initial public offering market off to a cracking start for the year, with the payments-splitting company jumping 90 per cent on it first day of trade.

Having raised $12 million and listed with an issue price of 20¢ on Tuesday, Splitit ended the day at 38¢, giving it a valuation of $100.3 million, having capitalised on the momentum behind peers such as Afterpay and Zip Co.

The company, which was founded in 2012 by Gil Don and Alon Feit, has created technology that sits on top of the payments “rails” used by Mastercard and Visa to allow individuals to split the cost of an item into monthly payments on their credit card without needing to take out a separate loan.

It took the entrepreneurs four years to commercialise their patented technology and in 2016 it launched in the US, before also expanding to Britain later that year.

While the business is quite different to Afterpay (which is subject to an ongoing Senate inquiry looking at the regulatory environment surrounding payday lenders and consumer leasing businesses) because it does not have a loan book and has no need to charge late fees, since it utilises a person’s existing credit card, it does not shy away from the comparisons to the successful buy now, pay later provider.

Splitit chief executive Gil Don told The Australian Financial Review he saw Afterpay as a complementary solution to Splitit, but that investors had responded well to the fact its solution utilised a person’s existing credit card.

“We decided to come to Australia because we have the tailwind of the guys listed here like Afterpay and ZipMoney,” he said.

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Source: Afterpay challenger Splitit up 90 per cent on first day of trade