Insights

This Afterpay-backed company is listing on ASX next week

Everyone loves to talk about their Afterpay shares. But now that journey’s over, how about this spin-off?
The post This Afterpay-backed company is listing on ASX next week appeared first on The Motley Fool Australia. –

The favourite barbecue story for ASX investors the last couple of years has been Afterpay Ltd (ASX: APT).

The buy now, pay later provider has been the darling of the local bourse, going from an initial public offer price of $1 per share to $125.67 on Monday afternoon.

In other words, $10,000 invested when it floated in 2016 would now be a tidy $1.26 million.

But now that big US fintech Square Inc (NYSE: SQ) is buying it up for $39 billion, perhaps that explosive chapter of the company’s life will come to a close.

However, did you know there is a business that will list on the ASX next week that was spun out of Afterpay?

In fact, Afterpay still holds a 32% stake.

Touch Ventures about to land on the ASX

Shares for a company named Touch Ventures Limited (ASX: TVL) will start general trade on the ASX on 29 September.

The venture capital provider launched in 2019 as AP Ventures as a way for Afterpay to invest in startups.

Cyan portfolio manager Dean Fergie told his clients in a memo that the Afterpay connection couldn’t hurt.

“Given the huge investor support of Afterpay — additionally so, after its deal with Square that sent Afterpay’s shares 30% higher — another good debut on listing could be expected.”

Fergie’s fund already has some shares after buying in during a pre-IPO funding round.

What does Touch Ventures do?

Touch Ventures invests in startups, primarily by buying some equity in them.

The firm currently has 5 businesses in its portfolio but is aiming to increase that to 8 to 10 companies after the ASX listing.

Normally only sophisticated and institutional investors have access to startup equity as they’re far higher risk than publicly listed stocks.

So the float of Touch Ventures would be a rare way for mum-and-dad investors to get a look into the exciting high-growth startup world.

Perhaps as a sign of its pedigree, Fergie said Touch has 2 buy now, pay later startups on its books: Postpay, which operates in the UAE, and Happay, which is a Chinese fintech. 

“Most significantly, Touch Ventures Limited invested US$25m into Australia Post competitor Sendle which has made significant inroads in Australia and is looking to expand into the US.” 

The portfolio also includes PlayTravel which is arguably another buy now, pay later system. That business allows customers to pay for travel packages in instalments.

The 5th startup in the portfolio is Basiq, a financial data mining platform.

Touch Ventures chair Michael Jefferies said in the prospectus that no geographic zones or sectors are off-limits in the investment strategy.

“Touch Ventures has a preference for global ventures. All companies in the foundation portfolio are generating revenues but are not profitable at this stage.”

The prospectus also mentions that Afterpay could refer investment opportunities onto Touch Ventures.

“Afterpay may also provide specific expertise along with Touch Ventures’ expertise in assessing opportunities referred to Touch Ventures and may separately enter into commercial agreements with companies that Touch Ventures decides to invest in,” said Jefferies.

The IPO, which issued shares at 40 cents apiece to raise $100 million, has now closed. Touch Ventures shares will start normal trading on the ASX on the morning of 29 September.

Afterpay will then hold 23.3% of the total fully diluted stock.

The post This Afterpay-backed company is listing on ASX next week appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

What percentage of Afterpay (ASX:APT) shares are owned by insiders?
Why Afterpay, AnteoTech, Cettire, & Vulcan shares are storming higher

ASX 200 tumbles but the Afterpay (ASX:APT) share price is green?
How has the Afterpay (ASX:APT) share price performed since reporting results?
The Afterpay (ASX:APT) share price is down 9% in September. What’s next?

Motley Fool contributor Tony Yoo owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!