Shares in electronic payments startup ChimpChange have plunged by almost a third on its share market debut, as investors struggle to find value in the fintech start-up.
The stock dropped 24 cents, or 30 per cent, to 56 cents. Nearly 1.9 million shares, or about four per cent of the company's share capital, changed hands on its first day of trade on the market.
ChimpChange raised $15 million through its initial public offer this month, issuing shares to a bunch of institutional and retail investors at 80 cents each.
The company, which launched public operations in August 2015, offers transactional bank accounts and instant peer-to-peer transfers to customers through a sponsor bank, and uses mobile phone numbers as the unique identifier for processing payments.
ChimpChange is currently targeting the fragmented US banking market by offering lower cost services and plans to generate revenue through interchange fees, out-of-network ATM fees, and platform fees.
It recorded revenue of just $US41,000 ($A55,092) in the six months to December 2015, and had accumulated losses of US$5.9 million.
Still, the company says its has been able to quickly scale up to about 87,000 customers and expects to break even by October 2017.
"We believe the market opportunity in the US is huge. The big banks there all charge high fees. Our product is particularly focused on the millennial and the underbanked demographic," founder and managing director Ashley Shilkin told AAP.
The company is also in discussion with banks in Australia to establish a presence in the local market, he said, without disclosing further details.
The IPO proceeds will be used for development of the ChimpChange platform, and marketing and customer acquisition costs.
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