The Ioupay Ltd (ASX: IOU) share price has fallen by around 15% since 1 March 2021, what’s going on?
Recent Ioupay share price action
It has been a very volatile month for Ioupay shares. A month ago it was trading at a share price of $0.16. It soared to $0.70 by 15 February 2021, dropped to $0.49 by 23 February 2021, went back up to $0.61 by 1 March 2021 and has now dropped back to $0.51.
Why has the Ioupay share price gone up so much?
The rocketing rise started after it announced that it had partnered with EasyStore to provide buy now, pay later services with a merchant referral agreement.
Easystore is a Malaysian business that provides services merchants and customers, it helps provide “smarter” access to multiple e-commerce sales channels, social media and payment platforms.
It is helping 7,000 merchants across the South East Asian markets, including Malaysia, Singapore, Indonesia, Philippines, Thailand, Hong Kong and Taiwan. Around 5,000 of those are in Malaysia with a growing portfolio of merchants in the US.
In 2020, EasyStore merchants processed a total transaction value (TTV) of $435 million. IOUpay and EasyStore have commenced integrating the systems with the BNPL functions and will start onboarding merchants and approved customers by the start of March – which means it’s happening about now.
Placement
The company then completed a $50 million placement within 48 hours to fund growth initiatives, including the acceleration of opportunities in South East Asia, as well as for working capital purposes. That raising was done at a share price of $0.50.
Result
At the end of reporting season, IOUpay released its half-year result for the six months to December 2020 which showed a 17% decrease in revenue to $2.8 million and a net loss that was 8% worse, falling to $1.38 million.
A new partnership
The latest update was the IOUpay announced it was partnering with iPay88, which is an online payment gateway. iPay88 is reportedly the dominant online payments brand in Malaysia. In 2020, its merchants processed over 360 million transactions with a TTV of approximately $10 billion. This apparently represents 50% of the total online transaction and payment market in Malysia. iPay88 services more than 45,000 online merchants and 20,000 in-store merchants in Malaysia, with its operations also spread across other South East Asian markets.
Is the Ioupay share price one to watch?
IOUpay is making the right moves to expand its business in the Asian region. Most of the other BNPL providers are focused on places like Australia and the US, so IOUpay could build up a good market share in South East Asia with a lot less competition.
However, it’s hard to know what the right price to pay is for a business at an early stage of its growth like this. Some investors may like just to get on board for the ride and the potential, though that isn’t my style of investing. IOUpay could be one to keep an eye on though if it keeps winning new partnerships in Asia.