Toronto-based startup Payfare, which offers FinTech software for gig economy workers and employers, has filed to go public on the Toronto Stock Exchange (TSX) via an initial public offering (IPO).
Payfare filed its preliminary prospectus on Monday, as first reported by The Logic. According to the prospectus, reviewed by BetaKit, the offering price of the transaction is yet to be determined.
The startup’s software is used by several companies considered to be titans of the gig economy, including Uber, Lyft, and DoorDash.
The startup noted in the prospectus it is looking to go public in order to strengthen its available capital resources and create a public market to assist Payfare in executing its growth. Specifically, the startup said it intends to use approximately $21 million of the proceeds to repay its short-term debt obligations. The remainder will be put towards Payfare’s growth.
Payfare was founded in 2015 and offers mobile banking, instant payment, and loyalty-reward solutions for gig economy workers in North America. The startup’s software is used by several companies considered to be titans of the gig economy, including Uber, Lyft, DoorDash, and DiDi.
Data from Statistics Canada indicates that in 2016 there were about 1.7 million workers in Canada’s gig economy. The estimated annual income of a typical gig worker was generally low, Statistics Canada found, with the median net gig income in 2016 totalling just $4,300.
Payfare said in the prospectus that it expects the gig economy to grow, noting the COVID-19 pandemic has demonstrated its “essential nature.” A 2019 study from Mastercard indicated the size of gig economy transactions is projected to grow at a 17.4 percent compound annual growth rate by 2023.
The prospectus also notes the startup incurred a net loss of $20.6 million for the period between January to September 2020. In 2019, Payfare’s net loss totalled $24 million. According to Pitchbook, the company’s investors include Bluesky Digital Assets and Rocket One Capital, which are both minority stakeholders.
The prospectus points to Payfare’s plans to expand its offering to new segments. The company expressed interest in sectors such as trucking, e-commerce for small to medium-sized businesses, and social media influencers.
Image source Unsplash. Photo by Kai Pilger.