Fintech, which is struggling, sees the possibility in ANZ’s MYOB agreement

The potential acquisition comes as banks face more pressure to find growth paths as the housing market falls and growth in mortgages slows. There is also speculation that ANZ may buy Suncorp’s bank shares – including the $ 60 billion loan book, 80 percent of which is mortgages – Street Talk reported.

MYOB owns 19.9 percent of Butn, and increased its stake during the smaller company’s IPO last year.

“If ANZ bought MYOB, they would actually own 19.5 percent of Butn,” said Rael Ross, CEO.

“If it went through, none of the banks have immediate lending to small businesses, so that would be a real opportunity for us.”

Butn provides financing to its small business customers on a transaction-by-transaction basis for a fixed fee – between 2 percent and 5 percent – per transaction with 30 to 90 day repayment terms.

The service adds a clickable button on software platforms such as MYOB or online marketplaces, and provides access to instant financing solutions.

After a successful IPO last year, Butn hit the 50 ¢ board with a market value of $ 80 million.

But since then, the stock has been swept up in widespread contempt for technology companies; it is down around 76 percent to 12 ¢ with a market value of $ 9 million.

“It’s not as bad as some technology stocks right now,” Ross said. “But the stock price has not reflected well on how we are doing as a company.”

Mr Ross also argues that Butn has been hit by the market’s sudden nervousness over anything that looks like a buy now, pay later.

He was quick to point out that Butn’s non-recoverable depreciation accounts for around 0.1 percent of its origins.

The company booked $ 85.4 million originally for the quarter that ended June, a jump of 46 percent from the same period a year ago, the company said in a trading update.

Net income has come in at 1.7 million dollars, up 57 percent from the previous corresponding period. Freelancer.com, which boasts around 50 million freelancers on its platform, along with its escrow business, was Butn’s latest big deal.

The four large banks have been slow to take out immediate loans, and mostly in mortgage approvals, not in small businesses.

Bendigo and Adelaide Bank’s express mortgage offer is driven by the start-up Tic: Toc. Last year, the couple deepened their relationship to $ 25 billion over seven years.

But digital mortgage business Nano has expanded its lending solutions to a B2C offering, with the idea of ​​licensing its lending platform to other banks and large non-banks.

Bank analysts have long seen MYOB and Xero as potential disruptions for the banks, and are waiting for the two companies themselves to become balance sheet lenders to small and medium-sized companies.

Although none of them have done so, MYOB has made a number of strategic investments that, in the hands of ANZ, could point to a new distribution arm for financial services for SMEs.

MYOB tipped $ 22 million to Sydney-based Flare HR in November 2020. The Sydney-based startup offers an HR platform that the company says one in four new job starters in Australia use.

Flare’s offer is based on the fact that starting a new job is a natural time to choose not only a super fund, but to create a new bank account and organize taxes and other job-related benefits.

As such, part of Flare HR’s strategy is to offer financial services products within the platform, which are now fully integrated into MYOB’s services.

Flare HR has already rolled out a pension offer, but the roadmap includes payment benefits, salaries and bank accounts.

Should ANZ succeed in buying MYOB, it is also likely to own two technology companies that are deep in offering financial services to both companies and consumers.

MYOB was acquired by US private equity giant KKR in a $ 1.6 billion deal last year. KKR’s senior adviser in Australia, former Prime Minister Malcolm Turnbull, also invested in the financing round for Flare, and acts as an adviser to the company.

In its preliminary results in May, ANZ chief Shayne Elliott said that the bank had asked APRA for approval to establish a non-banking holding company to house innovation assets outside its core banking business.

It is understood that ANZ will house MYOB and its surrounding fintech ecosystem investments outside the banking business, and mitigate any dilutive impact on tier 1 capital.

The move could make ANZ catch up with competitors such as the Commonwealth Bank of Australia, which is a leader in technology innovation through its x15 initiatives.

The CBA has also pushed hard to challenge the National Bank of Australia in the commercial banking world, where profit margins are significantly higher than the private banking world with mortgages.

Neobank Judo Bank has also carved out a niche in commercial banking services using technology to offer better services but rely on relationships to grow the business. Other banks have services for combining cash flow and accounting insight by connecting to Xero and MYOB, but some have questioned how much information customers necessarily want to share with their banks.

Correction: Butn has a market capitalization of $ 19.2 million, not $ 9 million as originally stated. MYOB has an ownership interest of 19.9 per cent in Butn, not 19.5 per cent as originally stated. Nano has a B2C offer, not a B2B offer as originally stated.