Novatti, an Australia-based digital banking and payments company, has acquired a 2.5% stake in RentPay, a subsidiary of online rental site Rent.com.au. The deal is worth $250,000 AUD ($168,000 U.S.), valuing RentPay at $10 million AUD ($6.7 million U.S.).
Rent said Novatti will be responsible for building out the technical and compliance aspects of the RentPay system, while Rent remains focused on user experience and engagement. A key feature will include integrating Novatti’s AliPay and WeChat payment technology into RentPay’s service.
“High volume payment and transaction handling is not a core competency of Rent.com.au’s,” CEO Greg Bader said in a statement to the ASX. “So it makes sense to partner with someone like Novatti, who has proven itself to be a leader in payments technology.”
Novatti operates payment systems, including open-loop cash voucher service FlexePin, FlexeWallet, Chinese bill payment services ChinaPayments.com and reloadable Visa card company Vasco Pay. It’s listed on the ASX under the ticker code NOV and has a market capitalization of $32.6 million AUD.
Novatti CEO Peter Cook said the stake in RentPay will let the company offer additional value to its customers in a growing cashless economy, while exposing Novatti to the rental payments market.
“We believe we have much to offer as RentPay evolves and look forward to working closely with the Rent.com.au team as we move forward,” said Cook.
As part of the deal, Novatti will have the option of increasing its stake in RentPay to 10% within 12 months, for a further $750,000 AUD in cash or equivalent services.
“It’s important to us that they have some ‘skin in the game’ as it means we will be innovating and unlocking value together,” Bader said, indicating that the company may seek additional shareholders for the business.
“While Rent.com.au will always maintain a majority position in RentPay, we are in discussions with other potential partners, primarily in the fintech and banking sector,” he said.