Australian analysts have queried the viability of RateSetter Australia’s mooted AUS$300m (£164m) initial public offering (IPO), following the sale of RateSetter’s UK business.
RateSetter was acquired by Metro Bank earlier this week in a deal worth up to £12m – far less than the estimated £25-50m that was predicted.
Australia’s Financial Review has reported that the “disappointing” sale price has spooked local fund managers who are questioning what this could mean for the Australian lender’s IPO valuation.
While RateSetter Australia would not comment on the viability and timetable of its IPO, the platform appeared to distance itself from its UK business, pointing out that RateSetter Australia is a separate business to RateSetter UK, operating with complete autonomy.
“There is little connection between the two businesses and there would be no impact to RateSetter Australia customers as a result of any changes to RateSetter UK,” said a spokesperson for RateSetter Australia.
“RateSetter Australia’s strategy distinguishes itself in a number of key ways including its diverse funding base (retail, institutional and government), core consumer lending segments (personal, renewable and automotive) and distribution channels.”
RateSetter UK has been almost entirely funded by retail investors, whereas RateSetter Australia has a more diverse lender base, with one third of its loan book funded by retail investors.
Despite the economic effects of the coronavirus pandemic, RateSetter Australia has confirmed that its originations in in July were 15 per cent higher than its best month ever.
In January 2020, RateSetter Australia hired a team to prepare the company for a flotation on the Australian Securities Exchange, where it would be listed alongside other marketplace lenders such as Wisr and MoneyMe.
In 2017, RateSetter UK’s chief executive Rhydian Lewis said he was considering an IPO on the London Stock Exchange.
“We hope to list the business – as an investor brand, we this would be natural step – but this is some way away,” said Lewis.
“We don’t hope to sell the business to a bank, and we don’t think that banks would necessarily consider buying a major P2P business at present.”
Read more: Analysts query RateSetter sale price