Buy now, pay later (BNPL) firms Zip and Sezzle have announced a definitive agreement under which Australia-based Zip will buy Sezzle, a press release said.
The release notes that Zip’s deal sets the implied price for Minneapolis-based Sezzle at 491 million Australian dollars ($352 million).
The combination of the two firms will have a total of 8.8 million customers and over 60,000 merchants in the U.S.
And the release says the merger will advance the companies’ objective to be a global leader in the BNPL industry and help finance the next generation of consumers.
“We are delighted to be bringing Zip and Sezzle together under a transformational transaction that is expected to deliver immediate scale and enhanced growth, which will support our path to profitability. Combining with Sezzle positions us as a leading global BNPL provider and prioritizes our ability to win in the important U.S. market,” said Larry Diamond, co-founder and global CEO of Zip.
Meanwhile, Charlie Youakim, executive chairman, co-founder and CEO of Sezzle, said the company was looking forward to the combination.
“We are extremely excited about the opportunity to create a leader in the financial services industry by combining with Zip and its management team,” he said.
He said he thinks the transaction would “position us to win in the U.S. and globally.”
Read more: 55% of Local Businesses Offer BNPL Online, but Just 5% Offer It in-Store
PYMNTS wrote previously that customers more likely to use BNPL while making purchases online, rather than in a physical store.
This has been true across four retail segments, including big-box stores, department stores, luxury and specialty stores and local businesses.
According to a recent PYMNTS study, this might just come down to availability – BNPL is offered for around half of the consumers’ recent online purchases, while it’s available for less than a fifth of in-store purchases.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More