Fintech Tyro just joined the unicorn club – and its shares are soaring

SME payments fintech Tyro listed on ASX today after raising $287.2 million – $34 million more than planned in a “multiple times” oversubscribed IPO – at $2.75 a share, entering the unicorn club with a market cap of more than $1.37 billion.

Tyro shares (ASX: TYR) began trading at noon today (AEDT), jumping as high as $3.45 in the opening 15 minutes as more than one million shares changed hands. The share price was up 20% in the first hour of trade to as high as $3.53. 

Normal trading in Tyro begins next Friday, December 13.

The float is the biggest of 2019, bucking the recent failure of Latitude, which pulled its IPO.

The Sydney eftpos machine provider and business lender, founded in 2003, is led by former Wotiff and Tatts boss Robbie Cooke, with former Telstra CEO David Thodey as chair.

Its biggest shareholder is Atlassian co-founder Mike Cannon-Brookes, through his private investment company Grok Ventures, owning a 12.74% stake, around 63 million shares. The top 20 shareholders include Woolworths boss Brad Banducci.

Tyro’s 450 existing shareholders control around 80% of total shares on issue following the float.

Co-lead manager Morgan Stanley said earlier this week that the company directed that allocations were “heavily skewed in favour of large, long-only, domestic and international investors that participated in the management roadshows”.

At the time of the listing, 213 shareholders controlled 96.9% of the business, owning 100,000 or more shares each.

Tyro has around 29,000 business customers, 450 staff and is Australia’s fifth largest merchant acquiring bank by terminal count.

But the business is not yet in the black, making a pro forma EBITDA loss of $6.1 million in FY19 (FY18 loss: $7.4m).

Last financial year’s net loss was $18.6 million, a slight reduction on the previous year’s $18.8 million.

Tyro says it will not be profitable in its Prospectus forecast period.

The company is using the funds raised to expand its payments and banking offerings, increase its merchant base in existing core verticals and entere two new industry verticals – accommodation and services; as well as drive its eCommerce offering and product innovation, with an eye to potential M&A and strategic partnerships.