CEO says more accurate lending algorithms and ‘wealthier’ users are turning Beforepay into profitability

The fortunes of prepayment fintech Beforepay appeared to change on Thursday, after a new report contrasted losses with rapid customer growth and a significant reduction in debt forgiveness.

Beforepay, launched in 2019, draws inspiration from the buy now, pay later industry with its spin on payday advances.

The Australian fintech offers users a short-term advance on their salary, typically up to $200, before automatically deducting those payments — plus a 5% service charge — when those users are paid.

The company made headlines in January when its shares fell some 42% within hours of its ASX debut, amid investor concerns over customer default rates and general market unease. market plaguing tech stocks.

Nonetheless, Beforepay’s active customer base grew to more than 158,000 in the March 2022 quarter, the company announced Thursday, which represents a 14% growth from the December quarter and a doubling from the previous quarter. March 2021 levels.

Perhaps more important for the fintech is the improvement in its net trading margin, which stood at $1.05 million in March 2022, compared to a loss of $750,000 in the previous corresponding period.

This turnaround was driven by lower net trading losses, ie expected and actual credit losses as a percentage of advances and Beforepay fees.

Net trading losses were 2.2% in March 2022, Beforepay said, compared to 3.1% in the prior quarter and 5.3% in March 2021.

Marketing costs more than doubled over the year to $6.4 million in the March quarter, but the company maintained it was on a positive trajectory.

“The continued momentum of user growth, increasing revenue and strengthening margins represents another step forward on our path to profitability,” CEO Jamie Twiss said in a statement.

/Public release. This material from the original organization/authors may be ad hoc in nature, edited for clarity, style and length. The views and opinions expressed are those of the author or authors.View Full here.

Sharon D. Cole