Montréal payment solutions company Nuvei saw a quarter of growth as it went public, increasing revenue by 32 percent year-over-year for the third quarter of 2020.
Nuvei released its third-quarter financial results on Wednesday for the period ending September 30. The results include the financials from its initial public offering (IPO), which took place in September.
Nuvei’s listing was the largest technology IPO by both equity capital raised and market capitalization in TSX history.
Nuvei’s listing on the Toronto Stock Exchange (TSX) saw it become the largest technology IPO by both equity capital raised and market capitalization in TSX history.
The Q3 financials include the $833 million USD in aggregate proceeds that Nuvei closed as part of its IPO. According to Wednesday’s report, this resulted in $758 million of proceeds for the FinTech company.
Nuvei used the net proceeds to repay debt and ended the quarter with $99.4 million in “usage of its credit facilities,” down from $717.8 million as of December 31, 2019. Nuvei also noted that unsecured convertible debentures and liability classified common and preferred shares were fully converted or repaid as a result of its IPO.
Nuvei also reported revenue of $93.6 million, an increase of 32 percent as compared to $70.8 million in the third quarter of 2019. The company’s adjusted net income was $16.5 million, as compared to $2.2 million last year.
Net loss for Q3 2020 amounted to $77.9 million, down from $65.7 million during the same period last year. Notably, net losses included $83.4 million in non-cash finance costs resulting from Nuvei’s IPO and associated valuation.
The Montréal company also reported $11.5 billion in total volume of transactions processed by merchants using its payments platform. This represents an increase of 62 percent as compared to $7.1 billion in the third quarter of 2019.
According to public filings for Nuvei’s IPO, the company also planned to use the proceeds from going public to fund “organic growth and product innovation initiatives as well as future strategic acquisition opportunities.”
Notably, during that time Nuvei was working to close a deal to purchase Dutch payment service provider Smart2Pay. Nuvei announced on November 2 it had officially closed the deal. According to the Q3 report, Nuvei acquired Smart2Pay for $82.9 million in cash and 6,711,923 shares.
Nuvei stated that the deal, which marks its second acquisition over the past year, creates one of the largest and most complete alternative payment method solution providers globally. The company stated that Smart2Pay also strengthens Nuvei’s presence in the digital gaming space and expands its geographic footprint in places like Russia and Brazil.
Founded by CEO and chairman, Philip Fayer Nuvei, Nuvei provides payment solutions to merchants, technology, and distribution companies, serving companies in Canada, the United States, Europe, Latin America, and the Asia Pacific region.
“I am incredibly proud of all that we accomplished in the third quarter, as we embarked on our journey as a publicly-traded company,” said Fayer. “We believe our performance, which included total volume of $11.5 billion along with strong revenue growth, is a testament to the strength of our technology, business model and focus on high growth verticals.”
Formerly Pivotal Payments, the company received one of its first large investments from Goldman Sachs totalling $60 million CAD in the mid-2000s. In December 2019, the company raised $358 million CAD, the majority of which came from existing shareholders, Novacap, some of Novacap’s limited partners, and Caisse de dépôt et placement du Québec (CDPQ).
Novacap and CDPQ were some of the largest shareholders in Nuvei, with a relationship that dated back to a $525 million CAD investment in 2017. At the time, Novacap and CDPQ, along with Fayer, acquired minority stakes in Nuvei.
As part of the IPO, Novacap, which owned 37.84 percent total voting rights, sold $75 million USD of its stock. Fayer, Novacap and the CDPQ maintained a collective 96 percent voting control, following the IPO, owning 73 percent of the equity.