After entering the US, Australian ‘buy now, pay later’ firm Zip is using a similar playbook in Europe and the UAE

Zip Co, an Australia-based ‘buy now, pay later’ (BNPL) company, is in a race against rivals Klarna and Afterpay to capture as much global market share as quickly as possible. After gaining a foothold in the U.S. last year, the company announced its intent to acquire two regional BNPL companies, including European BNPL provider Twisto and UAE-based Spotii.

Why should we care?
Zip is catching a wave of enthusiasm around BNPL purchase behaviors that grew during the pandemic. Late last year, a report from Bank of America suggested that the market for BNPL platforms – including Afterpay, Affirm, Klarna, and PayPal, will “grow 10-15x by 2025 to eventually process $650B-$1T in transactions.” Zip, which has a market capitalization of $3.9B, acquired New York-based Quadpay last year, and is using the latest acquisitions to expand its footprint. The company said annual transactions soared by more than 200% since the Quadpay acquisition. Spotii, which was founded in 2020, operates in the Middle East, and Twisto gives the company access to 27 European markets. In addition to market access, the company will also be integrating features from each of the company’s tech stacks, including Twisto’s in-house credit and fraud scoring engine, and Spotii’s proprietary risk algorithm. Zip is the #2 BNPL firm in Australia following Afterpay. Zip also faces competition from Sweden-based competitor Klarna, which reported global gross merchandise volume of $53B last year. “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 digitization of retail accelerates,” Zip CEO and Co-founder Larry Diamond said.