Reasons to Invest

• Transforming access to capital: DelayPay is revolutionising access to capital by providing fast and easily-accessible funding to Australian farmers, bridging a gap left by traditional banks.
• Growing and recurring customer base: The company has achieved 97% customer growth since 2022, with over 75% of customers returning throughout the season, highlighting a growing and recurring customer base.
• High-quality loan book: With a commitment to maintaining a high-quality loan book, DelayPay boasts less than 1% write-offs as a percentage of Gross Merchandise Value (GMV) since inception.
• Investing in growth: The company has made significant investments, achieving over AU$73.1 million in GMV and successfully onboarding 918 customers, demonstrating a strong focus on growth.
• Unique and innovative product: DelayPay offers a unique and innovative product, enabling a quick 48-hour turnaround from limit request to cash funding. 

What is DelayPay?

Introducing DelayPay, the revolutionary cash flow funding platform transforming the financial landscape for Australian farmers.

Agricultural businesses can now access fast cash flow to make necessary purchases, eliminating the hassles of lengthy applications and slow funding times associated with traditional banks. DelayPay brings a refreshing wave of efficiency and speed to the agricultural industry, streamlining the funding process.

With DelayPay's innovative approach, Australian farmers can secure funding approval in as little as 48 hours, thanks to the elimination of lengthy forms and invasive questions. To obtain funding of up to AU$500k, businesses simply need to provide their ABN (Australian Business Number), trading name, and a copy of their license.

But the benefits extend beyond swift approval. DelayPay offers straightforward payment terms, allowing companies a 180-day repayment window. This provides ample time for businesses to leverage their funds effectively and reap the rewards of their investments. Transparency is a core value of DelayPay, ensuring there are no hidden fees that would erode hard-earned profits. The platform's primary goal is to support agricultural companies in thriving and prospering.

Now, they extend an invitation to individuals to join this groundbreaking journey. By investing in DelayPay, individuals secure their stake in an industry-revolutionising opportunity that empowers agriculture heroes. Joining today means unleashing the full potential of incredible farmers across the nation with the support of DelayPay.

Business Achievements

Since 2019, DelayPay has provided support to 918 Australian farmers, enabling them to complete AU$ 73.1 million in purchases, with AU$ 23.1 million delivered within the past 12 months alone. The company places great emphasis on sustainable growth and has recently secured an additional AU$ 15 million in debt funding from its existing lender. This commitment ensures a steady availability of funding, projected to extend until 2025.

DelayPay has made significant strides in its performance, experiencing a 14.1% growth in its loan book, resulting in receivables amounting to AU$ 15.3 million. The company's unwavering dedication to supporting farmers has yielded positive outcomes, evident in the total consolidated net revenues of AU$ 3.08 million, representing a 10.1% increase compared to the previous fiscal year.

Operational Milestones

• Since its inception, DelayPay has demonstrated a growing loan book, with an average of 10 customers onboarded weekly over the last year.
• The company has established a highly successful Direct-to-Customer (D2C) operating model, resulting in a substantial number of recurring customers and a portfolio of high-quality underlying loans.
• DelayPay is actively developing a 'Preferred Supplier' network, offering cashflow solutions to entities that support Australian farmers by providing cash-on-delivery terms to sellers and extended payment terms to buyers.
• With a comprehensive underwriting process, DelayPay ensures robust capital protections, maintaining low levels of realised losses, and fostering an ongoing network of loyal customers.
• The company operates with a fully-remote workforce, comprising professionals from diverse backgrounds, including Investment Banking, Farming, Credit, and Consumer Lending.

Having successfully secured AU$ 900,000 in equity capital during its Series A funding round in 2021, DelayPay has achieved a 113% growth in Gross Merchandise Value (GMV).

The Vision

DelayPay was established by farmers, keeping their fellow farmers in mind. With a firm dedication to this mission, the company's primary objective is to provide unwavering support to its customers in effectively managing cash flow challenges. DelayPay aims to deliver convenience, speed, and price competitiveness in its services, understanding the unique needs and circumstances of the agricultural community.

An investment in DelayPay will enable us to;

• Continue to operate an already successful loan book;
• Increase market share of existing products and develop new products, which may include: longer-term facilities, dedicated livestock, crop and machinery loans;
• Improve the cost of capital and access additional AU$15.0 million in new debt funding; and
• Better service to new and existing customers with more price-competitive offerings and with a continued focus on speed and convenience.

Business Model

DelayPay generates income by offering extended payment terms to its customers for the purchase of agricultural goods, utilising a straightforward and transparent fee structure as of July 2023.

       Figure 1: Indicative pricing of DelayPay as of 1st July 2023

Operational Pillars of Success

• Capital: DelayPay demonstrates a strong commitment to enhancing its financial foundation to improve operational efficiency, minimise expenses, and rapidly introduce new services and products to the market.
• People: The company prioritises the recruitment of highly skilled and knowledgeable professionals who possess expertise in serving farming businesses and the Australian credit markets. DelayPay continues to invest in training and recruiting talented individuals to deliver exceptional customer service and meet the specific needs of its clientele.
• Growth: With a focus on dependable and stable growth, DelayPay aims to strengthen its relationship with customers by forging valuable partnerships with buyers and sellers. Additionally, the company seeks to foster innovation by introducing new and innovative credit products that further enhance its growth trajectory.

Use of Funds

DelayPay is delighted to offer this investment opportunity to support the company in achieving its growth objectives. The key focus areas for the investment include:

• Establishing and covering draw-down costs of the newly secured $15 million debt facility.
• Marketing and operational expenses to drive growth in the loan book and enhance its quality.
• The cost associated with the management of a larger loan book, including upfront costs for credit controls, platform improvements, automation for onboarding and management, and funding interest payments as part of offering extended payment terms to customers.
• Recruiting new employees dedicated to driving new business growth, establishing long-term preferred supplier relationships, and generating new customer leads.
• Direct costs associated with the capital raise, which may include management reporting and advisory fees.

Industry

The Australian agricultural sector presents a distinctive investment opportunity, encompassing a wide range of small, medium, and enterprise-sized farming operations and farming inputs.

The sector as a whole is experiencing growth, driven by factors such as rising land values, increasing commodity prices and favourable weather conditions.

       Figure 2: 2023 Agricultural Industry Market Size in (AU$’ billion)        Source: Agribusiness in Australia, Strong demand from export markets has cultivated sector revenue growth by Joshua Treisman (IBISWorld, March 2023)

Within the AU$159 billion 'Meat, Livestock, Fish' and 'Farm Inputs and Support' sectors seen in Figure 2, DelayPay has identified a captive addressable market comprising approximately 30,000 small to medium businesses. These businesses, often family-run, primarily operate in farming inputs and support, meat and livestock, and cropping segments. Typically, their annual revenues do not exceed AU$ 500,000. However, these businesses find themselves underserved by the major banks, which were once known for their direct relationships with such enterprises.

What is the influence of population growth on agriculture? 

As shown in Figure 3, the Australian population has increased by 1.71x exceeding 26 million people in the past 40 years. This upward trend is projected to persist and expand in the future.

       Figure 3: Population of Australia (1983 - 2023)        Source: Australian Bureau of Statistics, National, State and Territory Population (ERP) of Australia (ABS, June 2023)

Such growth has posed considerable challenges in terms of available land, particularly in the agricultural sector. This has resulted in a reduction of suitable farmland and subsequent price increases. 

How is the Australian food index impacted?

The food and non-alcoholic beverage index in Australia has witnessed a significant 4.09x increase over the past 40 years. This surge can be attributed to multiple factors, including population growth, heightened input pricing, and limited availability of resources. These combined forces have resulted in substantial pricing pressure on input goods in the sector.

       Figure 4: Consumer Price Index for Food and Non-alcoholic Beverages in Australia (1983 - 2023)        Source: Australian Bureau of Statistics, Consumer Price Index, Food and non-alcoholic beverages in Australia (ABS, June 2023)

Competitive Advantage

Team

Risks

Operating within a constantly evolving landscape, DelayPay recognises the importance of risk management across various fronts. The Board, Management, and employees share a unified commitment to mitigate and address risks that could potentially impact the business.

Key strategic risks that Demand constant consideration include:

• Environmental conditions: Factors such as weather conditions and crop prices have the potential to affect the demand for DelayPay's services from farmers. This could impact the company's growth trajectory.
• Macroeconomic conditions: Unemployment rates, under-employment, interest rates, lack of income growth, government policies, and currency markets significantly influence the business.
• Funding facility risks: DelayPay's funding platform currently relies on a single private credit investor, providing an AU$ 20.0 million line of credit. Any loss or adverse impact on this facility could have detrimental consequences for DelayPay if it fails to secure appropriate replacement funding.
• Credit risk: Although DelayPay conducts thorough credit checks prior to extending facilities to customers, there is an inherent risk associated with customer default, which may result from a reduction or delay in income. Failure to recover funds could lead to substantial losses or material adverse effects on the business.
• Underwriting and insurer risk: DelayPay relies on a single underwriter for providing underwriting on all customer transactions. An increase in default rates requiring a higher number of claims may pose challenges in renewing or securing a replacement facility, potentially impacting the business.
• Increasing cyber threats: Operating in a fully remote setting and relying on technology platforms for customer assessment, service provision, and accurate reporting exposes DelayPay to escalating cyber threats. Any disruption or loss of information could have a material adverse impact on the business.
• Regulatory and compliance risk: DelayPay operates within regulated markets subject to legislative and compliance requirements. The inability to meet, adapt, or comply with new legislation could result in significant adverse effects on the business.

About Swarmer

Swarmer is an Australian equity crowdfunding platform connecting businesses and investors. Designed to support start-ups, growth companies and scale-ups we allow everyday investors to own a share in businesses that are the future. We hold Australian Financial Services License (AFS License #507867). 

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