Australia’s Zip Co Cements Global Payments Presence With Acquisition Of QuadPay

Many quality listed fintech’s have represented once in a decade buying opportunities after the bottom fell out of the global market in mid-March.

In Australia, Zip Co falls well and truly into that category, having rallied off lows of around $1.17 in March to close at $6.35 at the close of ASX trade on Wednesday.

The buy now pay later fintech is steaming ahead on other fronts too, having this week announced the acquisition of US buy now pay later fintech QuadPay, for $403 million.

The deal will be funded by scrip, with Zip issuing approximately 119 Zip shares, priced on the 15 day volume weighted average price of $3.39.

Alongside the acquisition, the fintech is also raising fresh capital to support its expansion into the US market, raising $200 million from US based growth investor, Heights Capital Management.

Like its local competitor AfterPay, the acquisition pushes Zip further onto the global stage, and positions the business as a global heavyweight in the booming buy now pay later space. While the company already had operations in several offshore locations, the US adds an additional $6T in terms of addressable market for the business.

As a result of the transaction, Zip will have combined annualised total transaction volume of $3B, with QuadPay effectively contributing one third of that volume, via its established base of 3500 merchants and 1.5 million customers.

Interestingly, and what will no doubt have been a key determinant in the deal, especially for a fintech, both QuadPay and Zip leverage the same code base, a NZ based platform it acquired back in 2019, via its acquisition of PartPay.

Zip is proof Australian fintechs can successfully compete at the highest level on the world stage, especially when it comes to payments infrastructure and rails. Australia has a significant legacy of producing strong payments infrastructure businesses, and no doubt many more will be borne out of the inroads and talent being bought up inside aspirational organisations like Zip.

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