iSelect to raise as much as $25 million ahead of possible IPO

Online brokerage agency iSelect is coming closer to an eventual listing after confirming it will attempt to raise as much as $25 million before a possible move on the ASX next year.

This comes during a busy couple of years for the company, in which it has announced an acquisition and a capital raising worth $10 million in 2011 that valued the company at $300 million.

The stake was sold to US private equity group Spectrum Equity Investors. Other owners include Nine subsidiary Ninemsn, along with Rich Lister Shaun Bonett who remains on the board.

iSelect will seek to raise $25 million at $18.50 a share, also saying that its fundamental financials are strong and that a listing in the first half of 2013 is a possibility.

iSelect is an unlisted public company, with revenue of over $100 million a year. It has been mulling over an IPO since at least mid-2011.

iSelect is one of the many online broker services operating in Australia, but one of few to actually find success. Others include Mozo, which was founded by the ex-head of Virgin Money, Rohan Gamble, and CreditCardFinder.

However, iSelect spokesman Matt Cuming says part of the strength of the company’s business model is that it operates a call centre and provides a more personable level of customer care. 

Telsyte senior research manager Sam Yip says the success is no surprise given consumers’ view of the internet as a value channel.

“You’re not just seeing this grow in financial aggregation, but also in consumer daily deals as well. It’s growing because consumers are increasingly going online to find value.”

Yip also says these sites are attractive because they aggregate all types of services, including car and health insurance, and credit card providers.

“The opportunity for aggregators is servicing consumers, but increasingly servicing consumers through other channels such as mobile. We’ve seen in our research there’s a lot of activity in the financial space.”