This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Multinational investment bank Goldman Sachs (NYSE: GS) is within a week of reviving its cryptocurrency trading, Reuters reports, with the trading desk to reopen for Bitcoin (CRYPTO: BTC) futures and nondeliverable forwards (another type of future-oriented derivative) sometime in mid-March. The bank is also showing interest in the official digital currencies under consideration by several countries, along with blockchain tech in general.

The move comes at a time when explosive growth in the value of Bitcoin and several other cryptocurrencies has led several big players in the financial sector to soften their previously hard-line attitude about digital currencies. Mastercard (NYSE: MA) said in a blog post on Feb. 11 “this year Mastercard will start supporting select cryptocurrencies directly on our network,” mentioning Bitcoin by name, while asserting it will “be very thoughtful about which assets we support based on our principles for digital currencies.” According to Bloomberg, Visa (NYSE: V) has also said it will support cryptocurrencies if they become a “recognized means of exchange.”

The popularity and value of Bitcoin has mushroomed since the start of the pandemic. The cryptocurrency gained approximately 300% during 2020, and another 70% in January and February of 2021. The volatility of the digital currency means many skeptics remain, but Goldman Sachs’ upcoming restart of its cryptocurrency trading desk suggests it’s on the side of the bulls, at least for the time being. 

According to the digital-currency news site CoinDesk, Goldman Sachs aborted its previous foray into cryptocurrency trading back in 2018 over concerns Bitcoin and similar currencies occupied a regulatory gray area. But at the time, the bank said it might reopen the desk at a later time, along with offering nondeliverable forwards on the cryptocurrency, foreshadowing today’s news three years ago.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Here’s why the Raiz (ASX:RZI) share price is soaring today
• ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings
• Aussie investors are now buying more Bitcoin than gold
• How Tesla’s (NASDAQ:TSLA) Elon Musk just lost $19 billion
• ASX 200 Weekly Wrap: ASX lower despite bumper dividends

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Bitcoin. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Mastercard and Visa. The Motley Fool recommends Bitcoin. The Motley Fool has a disclosure policy.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Warren Buffett — chair and CEO of Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) — released his annual letter to shareholders on the weekend. While, as usual, it contained several interesting observations and feel-good stories about Berkshire and the companies that inhabit the sprawling conglomerate, it also contained an interesting nugget for investors. Berkshire has famously never paid a dividend since 1967, even though it has buckets of cash on its books. It could probably choose to be one of the highest-yielding dividend stocks in America if Buffett chose. Instead, it steadfastly refuses to turn into an income share.

But Warren Buffett has turned to another method of redeploying Berkshire’s massive cash pile into meaningful returns for its shareholders.

Berkshire buys its own stock back

In his letter over the weekend, Buffett made several comments about Berkshire’s share buyback program. Some of it is summed up below:

Last year we demonstrated our enthusiasm for Berkshire’s spread of properties by repurchasing the equivalent of 80,998 ‘A’ shares, spending $24.7 billion in the process. That action increase your ownership in all of Berkshire’s businesses by 5.2% without requiring you to so much as touch your wallet. Following criteria Charlie [Munger] and I have long recommended, we made those purchases because we believed they would both enhance the intrinsic value per share for continuing shareholders and would leave Berkshire with more than ample funds for any opportunities or problems it might encounter.

US$24.7 billion is a lot of money, even for Berkshire Hathaway. So Buffett must have thought it was worth it. Why spend that US$24.7 billion on buybacks and not dividends?

Well, a share buyback also increases a shareholders’ ownership of the company, as Buffett alludes to above. If I own 1 share of a business that only has 5 shares, I own 20% of that business. But if another investor in that business decides to sell their one share back to the company, there are now only 4 shares. I still own my 1 share, but that one share now represents 25% of the business. My wealth has increased. That is exactly what Berkshire has been doing for its own shareholders. Here on our own ASX, the share price of Ansell Limited (ASX: ANN) is jumping today because the company announced its own share buyback.

Buffett: buybacks beat dividends

This method of capital return is better from a tax perspective for one. In the US, there is no system of franking. So when a shareholder receives a dividend, it effectively gets taxed twice. Once at the corporate level, and once at the personal income tax level. But if Berkshire decides to buy back shares instead of paying a dividend, an owners’ shares automatically go up in value without any need to pay any tax. It’s effectively a tax-free gain (at least until I have to sell my shares). Even on the ASX, we have to pay tax once on a franked dividend.

Additionally, and as Buffett mentions, if a company’s management can choose to buy back shares at a price they believe is cheap, you can add even more value to shareholders’ pockets. That’s why Buffett went on to say the following in his letter:

In no way do we think that Berkshire shares should be repurchased at simply any price. I emphasize that point because American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked. Our approach is exactly the reverse.

Evidently, Buffett thought that the price Berkshire could net for purchasing its own stock was a ‘good deal’. And, if history is anything to go by, it probably was.

Foolish takeaway

Everyone loves a dividend. But sometimes, there are other ways a company can reward shareholders that are less obvious and blunt than sending its profits out the door as dividends. If I was a shareholder in Berkshire, I would be very pleased with what Buffett announced over the weekend.

More reading

• ASX 200 up 0.3%: Mesoblast raises US$110 million, tech shares rebound
• Ansell (ASX:ANN) share price jumps on share buyback news
• Warren Buffett just told us to stay away from this asset class
• 3 key takeaways from Warren Buffett’s latest letter to shareholders
• Robinhood fires back at Berkshire Hathaway’s Charlie Munger over criticism

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Ansell Ltd. and Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Eclipse Metals Ltd (ASX: EPM) share price is rocketing today, trading up 23.5% in late morning trade.

Let’s take a look at the ASX mineral explorer’s latest surface sample results from its rare earths project.

What rare earths results did Eclipse Metals report

The Eclipse Metals share price is going gangbusters today after the company reported strong rare earth mineralisation at its Gronnedal-lka project in south-western Greenland.

Eclipse said grab samples collected at the carbonatite deposit contained total rare earth (TREE) of up to 34,400 parts per million (ppm). It added that the carbonatite could potentially also provide carbonate rock as a commercial by-product.

Carbonate can be used to neutralise acid mine and process water. And Eclipse said it could readily ship any carbonite products from the existing wharf infrastructure at Gronnedal.

Among the rare earths contained in the grab samples, the company said it recognised that europium throughout the carbonatite intrusion at “several times greater concentration than average for rocks elsewhere”. It said this was many times more than you’d typically expect in carbonatites and noted that globally europium is in extremely short supply.

Commenting on the grab sample results, Eclipse Metals executive chair Carl Popal said:

Many of these samples were collected from the carbonatite in Gronnedal, but the highly altered surrounding rocks also offer excellent mineralisation potential. The results show persistent content of REE…

Overall, the results confirm there is excellent REE potential at the surface in Gronnedal-lka. The REE prospectivity fits well with our mission to excel in the commercialisation of metals and minerals demanded in the production of green energy and required by the industry to reduce pollutants.

Historical exploration records indicate the potential for rapid development and production of cryolite, fluorite, quartz, REE, carbonate, zinc and siderite.

Eclipse Metals share price snapshot

The Eclipse Metals share price is up more than 100% over the past year. By comparison, the All Ordinaries Index (ASX: XAO) is up 9.5% over that same time.

More reading

• Why the Alcidion (ASX:ALC) share price is jumping 8% to a record high today
• Why the Emyria (ASX:EMD) share price is climbing 7% higher today
• The latest ASX shares that brokers have upgraded to “buy”
• The Liontown (ASX:LTR) share price is surging 17% today. Here’s why
• The Crown Resorts (ASX:CWN) share price shakes off Moody’s credit decision

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The Alcidion Group Ltd (ASX: ALC) share price is charging higher on Tuesday afternoon.

At the time of writing, the healthcare technology company’s shares are up 8% to a record high of 26.5 cents.

Why is the Alcidion share price charging higher?

Investors have been fighting to get hold of Alcidion shares today following the release of an announcement after lunch.

According to the release, the company has signed a contract with New Zealand’s Te Manawa Taki (TMT) region District Health Boards (DHBs) for a pilot implementation of Better’s OPENeP Electronic Medication Management solution.

The release explains that TMT has a vision for the solution to standardise, digitise, and make accessible medication data and decision support while delivering improved patient safety and quality of clinical and service delivery with better information available to support transitions of care and medication treatment.

Alcidion was appointed as a reseller and implementer of the OPENeP solution in April 2019 for the UK, Australia, and New Zealand markets.

This implementation represents the first deployment of the OPENeP solution in the Southern Hemisphere. The company notes that it will provide New Zealand DHBs with choice when selecting closed-loop medication management solutions to improve care delivery and medication safety.

What is OPENeP?

OPENeP, which has just been renamed Better Meds, supports full closed loop medication management. It addresses the five rights – right patient, right drug, right dose, right route, and right time.

The integrated workflow addresses reconciliation, prescribing, clinical pharmacy review and medication administration. It has been developed in collaboration with clinical teams to align with their workflows.

The platform also provides efficiencies, transparency and decision support to the critical care processes associated with medication management.

Alcidion’s Managing Director, Kate Quirke, commented: “We are excited to extend our partnership with New Zealand DHBs beyond our Miya Precision, Patientrack and Smartpage products to the implementation of electronic medication management at Te Manawa Taki – the first in the southern hemisphere. We believe the OPENeP solution will deliver measurable benefits to the DHBs and look forward to extending these benefits across the region, on successful completion of the pilot.”

More reading

• Alcidion (ASX:ALC) share price hits 52-week high on record sales

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Emyria Ltd (ASX: EMD) share price is climbing higher following the announcement of an additional clinic to its portfolio. During mid-morning trade, healthcare technology and services company’s shares are up 5.13% to 21 cents.

Emyria responds to growing demand

The Emyria share price is on the rise after providing investors with a positive update to respond to its growing demand.

According to its release, Emyria advised that it has expanded its subsidiary, Emerald Clinics, with the addition of a second consulting suite. Located in Perth, Western Australia, the new clinic will seek to service to the strong demand. Just last month, the company witnessed record patient appointments nationally, which it opened its second Melbourne office in response.

Additionally, the Perth office will have four consulting rooms located within the site of the West Leederville Private Hospital building. The new suite is expected to improve patient access to Emerald Clinics and help support the company’s future EMD-003 clinical trials.

Currently, EMD-003 —Emyria’s first cannabinoid-based medicine to reduce symptoms of anxiety, depression and stress — is in the planning phase. The company is hoping to achieve registration with the Australian Therapeutic Goods Administration (TGA) sometime this calendar year.

What did the managing director say?

Emyria managing director, Dr. Michael Winlo, touched on a number of the points. He said:

Western Australia was the first Emerald Clinics location. Demand for our services from both patients and referring doctors has grown every month since we opened. We anticipate this expansion will allow us to improve our waiting times and see more patients which, in turn, improves our proprietary data asset (Emyria Data).

Insights from Emyria Data is now informing the design and planning of pivotal drug registration clinical trials for our first drug program, EMD-003 – a cannabinoid medicine targeting unmet needs in mental health.

The additional clinical capacity in Perth also allows us to support a wider range of clinical trials in different indications as well as help us deliver on the recently awarded Future Health Research and Innovation Grant involving our TGA-registered remote monitoring system.

Emyria share price review

The Emyria share price has been a solid performer for the last 12 months, rising over 100%. Year-to-date, however, has seen the company’s share recorded a 110% gain, reflecting fresh positive investor sentiment. It’s worth noting that in February, its shares reached an all-time high of 27 cents.

More reading

• Emyria (ASX:EMD) share price up 131% this month. Here’s why
• Why the Emyria (ASX:EMD) share price is seesawing today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX shares are building on yesterday’s strong gains and eyeing new highs, but this doesn’t mean there aren’t value buys still to be had.

The S&P/ASX 200 Index (Index:^AXJO) added 0.5% in late morning trade after jumping nearly 2% on Monday.

It’s not eyeing the record high it hit in February last year just before the COVID-19 meltdown.

The ASX share that’s upgraded to buy ahead of take-off

But it isn’t too late to join the party! The analysts at Macquarie Group Ltd (ASX: MQG) just upgraded the Flight Centre Travel Group Ltd (ASX: FLT) share price to “outperform” from “neutral” after conducting a post-results review of the retail sector.

“Retail was a bright spot with EPS estimates upgrades by +11.6% in the month of February,” said the broker.

“This was the first sector upgrade since Aug-17 (as a reminder, the Retail universe was downgraded by an average of -6% in each month of 2020).”

Retail reflation leverage boosts Flight Centre share price

Among retail stocks, few would have as significant leverage to the so-called “reflation trade”. COVID losers stand to recover the most as mass vaccinations are rolled out around the world.

Flight Centre noted pent-up demand for travel when it unveiled its profit results last month. Some limited international travel between COVID safe countries could resume as soon as the second half of this calendar year.

This could drive a big increase in Flight Centre’s profits, particularly as it now has a leaner business after undertaking massive cost cutting.

Macquarie’s 12-month price target on the Flight Centre share price is $20 a share.

Value doesn’t lose lustre

Another ASX share that scored an upgrade is the Evolution Mining Ltd (ASX: EVN) share price. Citigroup lifted its recommendation on the gold miner to “buy” from “neutral”.

The bullish change may raise a few eyebrows as the gold price is slumping. In fact, the broker believes that the precious metal has passed its peak this cycle and won’t be challenging last year’s record of over US$2,000 an ounce anytime soon.

Citi lowered its 2021 calendar year forecast for gold to US$1,800 an ounce from US$1,900 an ounce.

ASX gold share upgraded to buy despite weaker gold outlook

But gold doesn’t need to keep climbing for there to be value in the ASX gold sector.

“Key picks are stocks that are positioned to generate cash through cycle, optionality to deliver volume growth and those with upcoming news flow,” said Citi.

“We note ASX gold equities have underperformed physical gold by ~10% over the past few months.”

Citi’s 12-month price target on the Evolution share price is $4.80 a share.

More reading

• ASX 200 up 0.3%: Mesoblast raises US$110 million, tech shares rebound
• 2 ASX shares rated as strong buys by brokers
• ASM (ASX:ASM) share price jumps as scoping study supports $45m plant build
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 recovers strongly, Austal floats higher, Fortescue drops

Motley Fool contributor Brendon Lau owns shares of Evolution Mining Limited and Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Liontown Resources Ltd (ASX: LTR) share price is surging this morning, trading up 17% at 52 cents at the time of writing.

Below, we take a look at the latest drill results from the ASX minerals explorer and miner.

What drill results did Liontown report?

The Liontown share price is moving higher after the company said its drill results highlighted the potential for a significant bedrock gold discovery.

In Liontown’s first reverse circulation (RC) drill hole at its Moora Project in Western Australia, the company reported an intercept of 44 metres at 1.6 grams per tonne of gold. That intercept included 4m @ 10.1g/t gold.

The promising results come from 1 of 3 wide-spaced RC holes Liontown has drilled to test its Angepena Zone. Prior auger and shallow air-core drilling have defined a strong gold anomaly in Angepena. According to the company, the results point to the potential for a 900 metre plus zone of bedrock mineralisation, which remains open in all directions.

Commenting on the drill results, Liontown managing director David Richards said:

Intersecting a significant zone of high-grade, primary gold mineralisation in our very first RC hole is a very important development which validates our exploration approach.

It’s obviously still early days, but the data suggests the potential for a large mineralising system at Angepena that will require intensive drill testing. The fact that the shallow anomalism we have been seeing in auger and air-core drilling is directly related to primary bedrock mineralisation is a vital breakthrough that confirms that we have an emerging discovery opportunity at Moora.

Still to come

Liontown is still awaiting the results for 11 additional RC holes it recently drilled to test beneath the northern copper-gold zone. Assays are also pending for 145 in-fill and first-pass air-core holes.

Richards said, “We will wait to see what this information tells us before planning the next stage of exploration at this exciting project.”

Liontown Resources share price snapshot

Liontown shares have been marching higher for the past year, up 368% since 2 March 2020. By comparison, the All Ordinaries Index (ASX: XAO) is up 10% over that same period. (Note that by 2 March 2020, ASX shares had already come under heavy selling pressure due to the coronavirus pandemic.)

With today’s intraday gains factored in, the Liontown share price is up 22.6% so far in 2021.

More reading

• Why Afterpay, IOUpay, Liontown Resources, & Redbubble are racing higher
• ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings
• Here’s why the Senex Energy (ASX:SXY) share price is 8% higher
• ASX 200 Weekly Wrap: ASX lower despite bumper dividends
• Here’s why the IntelliHR (ASX:IHR) share price is rocketing 15% today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Liontown (ASX:LTR) share price is surging 17% today. Here’s why appeared first on The Motley Fool Australia.

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The Crown Resorts Ltd (ASX: CWN) share price is edging higher in early morning trade, up 0.5%.

This comes after Moody’s Investors Service maintained Crown’s current issuer credit rating of Baa3. However, Moody’s did revise the rating outlook to negative. Moody’s initiated the review for downgrade in November.

How did Moody’s make its credit rating call on Crown Resorts?

Commenting on the decision to maintain Crown’s current Baa3 rating, Moody’s analyst Maadhavi Barber said:

The rating confirmation reflects our view that Crown has good potential to maintain its investment grade credit profile, and is willing and able to remediate shortcomings identified by the Bergin Inquiry in New South Wales, as well as any additional shortcomings that may be identified by regulatory investigations in other states.

Explaining why Moody’s opted for a negative rating outlook for Crown, Barber added:

[T]he remediation steps required for Crown to reach suitability to hold its Sydney restricted gaming license are far-reaching and complex, which is why we have retained the negative rating outlook.

You’re likely aware of the lengthy list of issues facing Crown Resorts. Among them, the company was found unsuitable to hold a restricted gaming license in Sydney. That’s kept Crown from starting its gaming operations at its new casino. However, the company still has the potential to gain a new license down the road.

With Victoria and Western Australia also investigating Crown’s suitability to run its Casinos in those states, the pressure on management has mounted. Yesterday, director John Poynton became the latest member of the Crown board to resign. This follows the resignation of CEO Ken Barton back on 15 February.

Moody’s added that it “expects Crown’s gaming facilities in Melbourne and Perth will remain open and generate revenue”. This is because neither Victoria nor Western Australia will want to damage their economies or employment levels.

Moody’s also forecast that “Crown’s financial metrics will likely improve as earnings gradually recover, and debt is paid down.”

On the importance of proper Environmental, Social and Governance (ESG) practices, Moody’s said “governance risk considerations are a key factor in today’s rating action.”

Share price snapshot

Crown’s shares are down 1% over the past year compared to a 7% gain on the S&P/ASX 200 Index (ASX: XJO). Taking note that this time last year, ASX shares had already come under heavy selling pressure due to the pandemic.

Year-to-date the Crown Resorts share price is up 3%.

More reading

• Crown (ASX:CWN) share price lifts as director resigns
• Motley Fool CIO Scott Phillips talks to Sky News: Crown’s woes continue, a dividend ‘supercycle’, and falling energy prices
• The Aquis Entertainment (ASX:AQS) share price is now up 1,000% in a week
• 5 things to watch on the ASX 200 on Tuesday
• Crown (ASX:CWN) share price on watch on VIC royal commission

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is pushing higher again. The benchmark index is currently up 0.3% to 6,810.9 points.

Here’s what is happening on the market today:

Mesoblast raises US$110 million

The Mesoblast limited (ASX: MSB) share price has returned from its trading halt and is tumbling lower. This morning the biotechnology company revealed that it has raised US$110 million via a private placement led by a strategic US investor group. Mesoblast raised the funds at $2.30 per share, which represents a 6.5% discount to its last close price. Following the completion of the private placement, Mesoblast will have pro-forma cash-on-hand of US$187.5 million.

Tech shares continue to rebound

Australian tech shares have continued to rebound on Tuesday. At lunch, the likes of Appen Ltd (ASX: APX) and WiseTech Global Ltd (ASX: WTC) have followed the lead of their US counterparts and are recording solid gains. This has helped drive the S&P/ASX All Technology Index (ASX: XTX) 1.2% higher today.

Ansell buyback update

The Ansell Limited (ASX: ANN) share price is pushing higher today after providing an update on its share buyback. The global leader in personal protection safety solutions advised that, while it has not recently bought back any shares, it may recommence buying back its shares under its buy-back program from 5 March. This is after the conclusion of the dividend reinvestment plan pricing period.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Eagers Automotive Ltd (ASX: APE) share price with a 6% gain. This is despite there being no news out of the auto retailer. The worst performer has been the Platinum Asset Management Ltd (ASX: PTM) share price with a 3.5% decline. This is due largely to its shares trading ex-dividend this morning for its interim dividend.

More reading

• Why Limeade, Oil Search, Platinum, & Whispir shares are sinking
• Ansell (ASX:ANN) share price jumps on share buyback news
• Here’s why the Mesoblast (ASX:MSB) share price is tumbling lower today
• Did you know Piedmont (ASX:PLL) and Mesoblast (ASX:MSB) are listed on the NASDAQ?
• ASM (ASX:ASM) share price jumps as scoping study supports $45m plant build

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. The Motley Fool Australia owns shares of WiseTech Global. The Motley Fool Australia has recommended Ansell Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 up 0.3%: Mesoblast raises US$110 million, tech shares rebound appeared first on The Motley Fool Australia.

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As the buy now, pay later (BNPL) sector rages on, companies like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) are having to make room for new players such as Deferit. Whilst Deferit is not currently listed on the ASX, it has been busy raising capital of late.

Yesterday, my Fool colleague Sebastian Bowen wrote about the up and coming Sweden-based BNPL company Klarna, which was recently valued at approximately US$31 billion.

Today, let’s take a closer look at Deferit and what it has been up to.

Deferit raises $15 million from investors

According to an article in yesterday’s Australian Financial Review, Deferit has secured $15 million in investor funding.

The company does not categorise itself as a BNPL service, although there are similarities between its business model and those of traditional ASX BNPL players.

Deferit’s offering involves paying the bills of its customers upfront in exchange for being repaid in four fortnightly payments. The business charges $6 per month for its service.

This varies from traditional BNPL services in that the company does not fund discretionary items. Also, according to Deferit, its service does not build credit like traditional BNPL providers since the bills are already owing.  

The business claims to have 250,000 customers and estimates it has paid more than $100 million of bills.

Is Deferit positioning for an IPO?

Business News Australia reported that Deferit will use the funding to ramp up marketing activities and grow its team. It further notes that Deferit has witnessed a 150% growth in its business over the past twelve months.

So while Deferit is not listed on the ASX, it seems like the business has its eye on expansion.

With the Afterpay share price booming nearly 300% higher over the past twelve months and the Zip share price delivering growth not far behind it, it seems Deferit is ready for its piece of the growing consumer fintech sector action.

Foolish takeaway

Yesterday, ASX technology shares had their best day since 2 February 2020. Afterpay and Zip each posted gains of more than 4% and 6% respectively.

While the S&P/ASX 200 Information Technology Index (ASX: AXIJ) technology rose by 4.2%, the S&P/ASX 200 Index closed yesterday with a 1.36% gain.

As long as the BNPL sector continues posting such big gains, we’re likely to witness a new crowd of offsprings, like Deferit, entering the market and possibly gearing up for an ASX premier.  

More reading

• Why Afterpay, IOUpay, Liontown Resources, & Redbubble are racing higher
• Here’s why the Afterpay (ASX:APT) share price fell 11% in February
• Here are the best performing ASX 200 tech shares in Februrary
• Why did the Zip (ASX:Z1P) share price rocket 43% in February?
• Leading brokers name 3 ASX shares to buy today

Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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