Australian buy now, pay later (BNPL) company Zip will expand into Europe and the Middle with the purchases of BNPL competitors Twisto and Spotii.
Zip has entered into an agreement to purchase the remaining shares of the Czechian and the United Arab Emirates-based firms. The Spotii acquisition is expected to be complete in the third quarter of this year, while the Twisto purchase is expected to conclude in the fourth.
Established in 2013, Zip is a BNPL personal finance product that allows it users to pay at their favourite retailers around the world. Over 5 million customers currently pay with Zip and it is available online and in-store at over 37,000 retailers. The company previously expanded into the US and UK markets.
According to Zip, the transactions align with its global expansion plans and the rapidly accelerating global opportunity in the BNPL market. Through the acquisition, Twisto and Spotii will be integrated into Zip’s global Single Merchant Interface, a service that provides merchants with instant access to eleven countries over five continents.
Zip noted its acquisition of Twisto marks an ‘important step’ in its European strategy and will complement its presence in the UK.
The company claims a key reason for the Twisto purchase is that it will provide them access to the other 26 EU countries – a region which is the second largest ecommerce market in the world at $1.1trn. Furthermore, Twisto holds a European Payment Institution license, which enables the provision of payments services across all EU member states subject to regulatory consents.
In addition, Twisto currently markets a range of products that ‘align’ with Zip’s digital wallet strategy. These include the issue of virtual cards, short and long-term instalments, an account-based revolving credit line as well as integrations into Apple and Google Pay and the ability to pay bills through the Twisto app.
Regarding the Spotii acquisition, Zip claims a key decision behind the purchase was the growth trajectory of the Middle East ecommerce market, which is seeing online spend increasing 25% annually. While the UAE-based company was only founded a year ago, it has already connected with 650 merchants and has seen transactional volume grow at an average of 90% month-on-month since its launch.
Zip co-founder and CEO Larry Diamond said, “The acquisition of Twisto shows our commitment to global growth and follows our ‘Coalition of Founders’ model, where we back strong founders with a shared vision and deep cultural alignment in our quest for global payments coverage.
“We are very much looking forward to adding this strategic geography to our growing footprint and fulfilling global merchant demand. We have been impressed by the Twisto team, their deep customer focus and product set and look forward to working closely with them to deliver on the opportunities we jointly have in front of us.”
On the Spotii purchase, he added, “The Spotii acquisition is an important step in Zip’s global expansion and international strategy, with Ecommerce in the Middle East on a significant upward trajectory. We have been working with Spotii since our initial investment in December 2020 to broaden our understanding of the BNPL opportunity in the region and have a number of exciting global merchants we are looking forward to activating in the coming months.
“We also believe there is a large untapped opportunity to bring BNPL to emerging markets where cash on delivery remains a significant merchant challenge, and where the digitisation of retail accelerates.”
Elsewhere in the BNPL market, California-headquartered BNPL company recently achieved unicorn status after a $130m Series D brought its value up to $1.1bn.
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