The launch of NEO Finance IPO: an innovative way to invest in the shares of the fast-growing start-up

The first Lithuanian fintech start-up NEO Finance, which manages the leading P2P (peer-to-peer) lending platform in Lithuania, named Paskolu klubas (Loan Club), and provides the payment initiation service with trade mark Neopay, launches its public offering (IPO). NEO Finance plans to attract EUR 0.5-2.5 mill. through IPO to be used for further development.

Individuals and companies are able to acquire the shares of the fast-growing start-up on the online platform or through a financial intermediary. The public offering of the shares is carried out simultaneously in Lithuania, Estonia and the Netherlands.

The price remains unchanged despite the growth of the company

“We have developed an online platform where everyone can quickly and conveniently make their bids on shares. We democratise investment and enable everyone to contribute to our growth, as we have previously democratised lending so that people can borrow directly from other people, and online payments can be made not only by banks but also by fintech companies, thus creating competition and making financial services more affordable”, says Evaldas Remeikis, the Chairman of the Board of NEO Finance.

For the first time in Lithuania and Estonia, the Dutch auction method (the so-called marginal price auction) is used to carry out the IPO, when only the lower share price limit is set. This is how Google has traded its shares.

The Board of NEO Finance has set EUR 3.14 as the lower share price limit. It is based on a share offering used last autumn on the pooled financing platform Seedrs, the UK. Back then, NEO Finance attracted EUR 209.000, while investors paid EUR 3.14 per share. According to this offering, the value of NEO Finance at that time amounted to EUR 10.8 mill.

“We have set the same lower share price limit that was paid by investors on the pooled financing platform last autumn, although the company has grown and launched a new service of payment initiation. Our system currently is used for making payments in Lithuanian e-stores such as Edrauda, Manogilė.lt, Vienasaskaita.lt and others”, says Deividas Tumas, a Member of the Board of NEO Finance.

The surplus will be returned to the account

While bidding, each investor will choose the preferred quantity and price of the shares. Bids may be unlimited, at different rates.

After the deadline for submission of bids - 4 June, 23:59 - all bids will be sorted by price from highest to lowest. Then the Board of NEO Finance will decide on the milestone - the number of shares to be sold and the lower bid price limit per share. This price will become the fixed IPO price used to sell the shares to all investors who have offered a bid that is equal to the set price or higher.

The final price per share will be the same for all investors: those who have offered a higher price will get the surplus returned to the account.

The funds will be used for growth

NEO Finance intends to use funds raised through the public offering of their shares for further growth. Over the next 3-4 years, the volume of loans granted by the P2P lending platform Paskolu klubas is planned to be increased more than three times.

The aim is also rapidly to expand payment initiation services and not only become the market leader in Lithuania but also start providing these services in at least six European countries, prioritising the Baltic States, the Netherlands and the Czech Republic. This spring, NEO Finance has already established a company in the Netherlands, NEO Finance B.V., which should attract investors and contribute to further development of the company services in Europe.

Part of the funds will be invested in attracting investors from European countries to the Lithuanian P2P lending platform so that more Western capital would flow to Lithuania. The aim is also to carry out a feasibility study to identify opportunities for developing a P2P lending platform using partnerships and franchises in other European countries.

The first to enter the stock exchange

After the successful implementation of these actions, the estimated value of the company may reach EUR 25-62 mill. in 2023, based on the audited forecasts of the company.

“We are an early-stage fintech start-up with great growth potential. 360 investors have already expressed trust in us on the pool financing platform Seedrs, as well as investors of start-up accelerators and former bankers; therefore, by this public offering, we want to make it possible for all individuals and businesses to contribute to the growth of Lithuanian fintech unicorns”, says Marius Navickas, a Member of the Board of NEO Finance.

This is the first Lithuanian fintech start-up entering the stock exchange: after the public offering, the shares of NEO Finance will be traded on the Nasdaq Vilnius First North market.

To bid on the shares of NEO Finance visit www.neofinance.com/ipo (and click ‘IPO’) or contact financial intermediaries: financial brokerage firms or banks in any country having access to the Nasdaq Vilnius Stock Exchange.

The public offering of shares is implemented by NEO Finance together with Šiaulių bankas. Sorainen Law Firm was chosen as the legal adviser in this share offering.