Once valued at $500m, Till Payments is teetering on the brink
Key Points
- Why it matters: Till was one of Australia’s hottest start-ups, valued at $500m.
- Financial accounts reveal there is now material uncertainty over its future.
- Its board is likely to ask for more capital from its heavyweight base of backers.
Till Payments is in trouble, the latest in a string of local payment companies teetering on the brink. Its board, however, is confident that existing shareholders will step up to keep Till afloat as its fast-growing revenues turn into profit. Without additional funding, it has little chance.
“I’ve seen this story a number of times. When the market no longer supports the venture capital side of the business, which is fast-growing revenue but an unprofitable business, it puts these companies in a difficult spot,” said Matt Davey, the Las Vegas-based Australian entrepreneur who has found himself on the board, and a major investor in, Till.
Investor and board member Matt Davey says Till is considering another capital raise and is hopeful existing shareholders will “re-underwrite” if required.
“Loss-making businesses survive on support from their shareholders, both current and future investors, and that is where Till is today. It enjoys that support, and so we are comfortable it is a going concern.”
The company’s accounts, on the other hand, paint a bleaker picture. Till posted a loss of almost $141 million in the 12 months to the end of June last year, according to filings recently lodged with the corporate regulator. Revenues rose 253 per cent to $51.2 million, but expenses grew faster, widening the loss from $136 million recorded one year earlier.
The accounts show Till had $36 million in cash, and had burnt through $55 million on day-to-day operations in 12 months. It is already cutting costs by around $8 million a year, but warned that there was “material uncertainty related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern”.
Till is a processing platform for retailers, hospitality operators and others, allowing them to accept a payment with a physical terminal or online. It has previously attracted a string of high-profile investors, including Caledonia’s Will Vicars, Regal Funds Management, billionaire businessman Bruce Mathieson, Sydney Roosters chairman Nick Politis, former Coalition minister Craig Laundy, Ord Minnett boss Karl Morris and several senior bankers at Barrenjoey Capital Partners and UBS.
Over the last three years, Till has been variously valued at $500 million and $800 million.
Last year, Till engaged Credit Suisse to work toward a listing in the United States in 2023. At the time, it said it processed $US14 billion ($21.6 billion) in payments. By comparison, Tyro processed $42.6 billion last year.
Mr Davey said there was still “significant demand” for Till’s services. “From the revenue side, we continue to experience growth,” he said.
Till last raised $70 million while earlier this year restructuring its board and laying off a large part of its workforce. In January, Mr Davey joined as a non-executive director. He founded NYX Gaming, which floated on the Toronto Ventures Exchange and was later acquired by Scientific Games for $US630 million, and now chairs ASX-listed BetMakers Technology Group.
Mr Davey told The Australian Financial Review that Till was considering another fundraising round and was hopeful existing shareholders would “re-underwrite” the raise if required. It was difficult to say when Till would not be reliant on additional capital to stay afloat.
“We continue to believe the company enjoys the support of its current shareholders and investors, and we will continue to execute on the turnaround program that we have advised our shareholders we will do,” Mr Davey said.
“If things change, we will assess that as and when it happens. As a board, we continue to evaluate what our strategic options are.”
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