'Facebook for investors': SELFWEALTH launches $7.5m initial public offering
Online share trading platform and investment community Selfwealth has pushed the button on its initial public offering as it looks to expand its suite of offerings and position itself as the Facebook of investing.
Selfwealth describes itself as a potentially disruptive brokerage service with a peer-to-peer portfolio construction functionality in the offer document lodged with the corporate regulator last week. The platform provides a flat fee share trading of $9.50 per parcel of shares and allows members to publish and monitor share trades in real time.
The service is looking to capitalise on the rise of the self directed investor while the IPO should benefit from a growing appetite for 'fintech' stocks. Selfwealth's target audience are the thousands of self managed super fund operators who control one-third of the $2.3 trillion in superannuation savings.
It is understood that Selfwealth monitors 20,000 portfolios and executes the trades of 1500.
Selfwealth is seeking to issue 37.5 million shares at 20¢ a share or $7.5 million. The offer is open until October 25 and is expected to begin trading on the ASX by November 15 with market capitalisation of up to $26 million.
Selfwealth has three primary income streams, namely revenue from online trading, interest on funds held in Selfwealth's cash account and subscriptions to Selfwealth Premium or the peer-to-peer portfolio construction network.
The company will look to offer business to business services in the near future, allowing professional firms to promote themselves to its network of investment enthusiasts.
The company plans to use the funds to ramp up its advertising, marketing and technology development. Trade growth
Selfwealth reported net losses after tax of $3.2m in FY17, of $2.5m in FY16 and of $2.1m in FY15. The company has accumulated losses of $9.9 million to the end of FY17.
Selfwealth has raised $12.3 million in capital through several private financing rounds, including an offer at the end of 2016 for sophisticated investors.
Founder and managing director Andrew Ward remains a major shareholder, with an 18.1 per cent stake, while Washington Soul Pattinson also holds 13.8 per cent. Another 10.5 per cent of the company is controlled by Rod Lesh, managing director of BGL, a leading developer of SMSF software and compliance software.
Since launching the share trading functionality in October 2016 the amount of trading has grown rapidly from 179 trades a month in October 2016 to 3719 in August 2017.
Among the popular features provided by the website are model portfolios, including the Selfwealth 200, which is an index of the most popular holdings from the most successful investors. In the 2016 financial year the Selfwealth 200 outperformed its benchmark by 14.3 percentage points.
Member trade data is sliced and diced a number of ways. Investors are warned when their portfolio is out of alignment with desired criteria.
Data from the pool of Selfwealth members is augmented with daily trading data of 15,000 self-managed super funds sourced through a partnership with SMSF administration service BGL. Selfwealth has a seven-year contract with BGL.
The company also maintains relationships with global research house Thomson Reuters, Powerwrap provides the execution services and Chi-X the live pricing of securities on the platform.
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