Afterpay - A New IPO Successfully Leveraging Online Sales

Dean Fergie

With the online sales space becoming increasingly competitive (let's face it, all shoppers searching for a generic product compares prices online) websites are looking for any comparable advantage to drive basket sizes and increase overall sales.

Afterpay (ASX:AFY) offers shoppers the ability to purchase and have delivered a product immediately, but pay for the item over 4 equal and interest-free payments. AFY has implemented its offering across sites such as General Pants, House, Optus, and Surfstich and is enjoying incredible demand and customer take-up with underlying monthly sales up 100% already in 2016 (to $5m in April).

AFY pays the merchant upfront, and by using a sophisticated back-end developed by Touchcorp (ASX:TCH), instantly verifies fraud and a customer's payment ability, significantly containing credit risk to AFY.

At $1.32, AFY has performed brilliantly since listing at $1 in early May 2016 and we expect continued growth given the momentum in the business and the sector.

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Patrick Poke

Great to have you on board Dean. Some interesting ideas here outside the usual small-cap growth stories that everyone talks about. Well worth a look.

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