Afterpay to raise $330m for US expansion

Afterpay to raise $330m for US expansion

Shares in Australian fintech Afterpay (ASX: APT) have entered a trading halt amidst the announcement of a $330 million capital raising aimed at funding overseas expansion.

In a release today, the company says its experience to date "confirms that the US scale-up opportunity is clear" and a strong growth strategy is needed to achieve the goal of $20 billion in gross merchandise volume (GMV) by the end of FY22.

Funding will go towards growth in the US, the UK launch and continued investment in Australia and New Zealand, along with investment in enterprise merchant acquisition and scaling SMB (Server Message Block) capability ahead of the curve.

The funding will take place through a fully underwritten institutional placement to eligible investors, which aims to raise at least $300 million.

Pricing will be determined by an institutional bookbuild and a floor price of $21.75 representing a 10 per cent discount to the last close of trade.

The placement will then be followed by a share purchase plan that aims to raise approximately $30 million.

The group has also announced a sell-down from major shareholders and founders to two US cornerstone investors, Tiger Management and Woodson Capital.

Founders Anthony Eisen and Nicholas Molnar (pictured) will each sell down 2.05 million shares, representing 10 per cent of their respective stakes in Afterpay. Group head David Hancock will sell 400,000 shares as part of the arrangement.

In total the sell-down represents around 1.9 per cent of Afterpay's shares with a value of close to $110 million at the last close.

Shares are expected to recommence trading by the market's open on Thursday 13 June.

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