Vancouver’s Mogo Finance Technology Inc. has filed a prospectus to prepare the way for an initial public offering. The company plans to raise approximately $50 million through listing on the Toronto Stock Exchange.
The offering is being underwritten by BMO Nesbitt Burns Inc., Cormark Securities Inc. (together, the ‘‘Joint Bookrunners’’) and Canaccord Genuity Corp., CIBC World Markets Inc. and National Bank Financial Inc.
Mogo, an online lender that bills itself as provider of “socially responsible financial offerings”, is believed to be valued at approximately $200 million.
“We believe Mogo has first mover advantage as Canada’s only ‘full spectrum’ online lender,” Difference Capital managing partner Tom Liston told Cantech Letter. “The company is able to offer products ranging from short term sub-prime loans to super-prime multi-year installment loans. We believe the company’s internal adjudication model, i.e. ‘Mogo Score’, offers it a competitive advantage over traditional bureau credit scores.”
Difference Capital has invested $2 million in Mogo.
“While our business is currently focused on unsecured consumer loans, we plan to leverage our platform and technology to expand into new products and verticals, which we expect to include business lending, mortgages, car loans or similar products,” writes Mogo in its prospectus.
Aside from its digital offering, Mogo has brick-and-mortar presences in nine cities in B.C., Alberta and Ontario.
The company counts 100,000 clients to whom it may loan up to $35,000 ranging in term from one to five years, with interest rates ranging from 5.9% to 35.9% depending on a borrower’s credit score. Mogo also offers prepaid Visa credit cards.
Mogo’s IPO follows on from Shopify’s, which is set to dual list tomorrow on both the TSX and NYSE after announcing that it plans to increase its share value from between $12-$14 to $14-$16.
Canadian consumers owe $1.8 trillion in consumer debt as of March 2015, making the consumer lending market one of the largest in the economy.
It’s also a market ripe to be disrupted, as Canada’s financial technology sector expands to serve clients in ways that our incumbent banks aren’t agile enough to do.
By offering consumers more flexibility and a better overall consumer experience, Mogo is as well positioned as anyone to capitalize on consumers searching for options in the debt management market.
“The ability of individuals to access affordable and fair credit is essential to stimulating and sustaining a healthy, diverse and innovative economy,” continues Mogo in their prospectus. “We believe that with technology and proprietary online processes, capital can be more efficiently deployed and priced, providing consumers with improved access to fair credit.”