It’s been a tough six months on the share market for New Zealand-based buy now, pay later (BNPL) company Laybuy Group, but a $35 million placement has topped-up the company coffers and positioned the company nicely for expansion in its key growth market of the United Kingdom – an opportunity that is “under-appreciated” by the market, says Laybuy managing director Gary Rohloff.
The company is already a significant player in the UK BNPL market, with consumers spending more than £151 million ($274 million) through Laybuy in the past year, up 504% on the prior year.
“We’ve got a trajectory that will see us growing by a significant volume in that market again this year, we’re on target to hit NZ$1 billion ($926 million) in GMV (gross merchandise value, or the value of the transactions enabled by the BNPL facility) for FY22, and we need the capital to fuel that growth,” says Rohloff.
The UK market is massive, it’s a £400 billion ($727 billion) retail market that we can access, and it’s under-estimated by many.”
Announcing the completion of the placement earlier this month, Laybuy also reported that it had entered into strategic partnerships with e-commerce and affiliate marketing players Rakuten, AWIN and Sovrn, which will give Laybuy customers access to more than 5,000 merchants in the UK, including household-name brands ASOS, Nike, Adidas, Booking.com, B&Q, Marks & Spencer, Amazon and eBay.
These partnerships will enable customers to use Laybuy’s innovative “Tap to Pay” digital card with these merchants, allowing them to pay with Laybuy both online and in-store without further merchant integration or direct relationship required.
“These are massive retailers, and it means that we scale-up from our current 2,000 retailers to 7,000, rapidly, and gives our consumers the opportunity to pay by Laybuy online and, where some of those stores have a physical presence, in-store too, with Tap to Pay. As the UK comes out of lockdown, we’re really excited about what that does, and the recent raise will help fuel that growth,” says Rohloff.
In a fiercely competitive space, Rohloff says Laybuy is always looking to differentiate itself, outside of the obvious point of difference that it is a weekly payment cycle: that is, Laybuy lets customers shop now, receive their purchase straight away, and pay it off over six weekly payments without paying interest.
“That is a differentiator because our competitor set are fortnightly or monthly cycles. So, from a retailer’s perspective, they’re offering their customer choice,” he says. “We’ve also got a couple of unique products, Laybuy Boost, which allows consumers to spend more than their Laybuy (transaction) limit in one seamless transaction, and we’re currency-agnostic,” referring to Laybuy Global, which allows customers to buy products online in their local currency with a merchant in a different country (given that Laybuy operates across Australia, New Zealand and the UK).
“We’re just focusing on controlling what we can control,” he says. “And that’s delivering on our numbers, which we’re doing. We’re twice the size the company was on listing, but the share price has halved, so I feel a huge responsibility to our shareholders,” Rohloff says. “Our family is the largest shareholder, so we haven’t dodged this bullet, either,” he adds.