Westpac invests $40 million in buy now, pay later payment service zipMoney
Westpac has invested $40 million into ASX-listed zipMoney through a private share placement for an 17.11 percent stake in the company, with a further $8 million to be invested subject to performance.
According to a statement to the ASX this morning, the strategic investment will see Westpac and zipMoney explore the potential of integrating zipMoney’s products and services across the Westpac network, while the funding will help zipMoney further its product development and support the growth of its loan book.
Founded by Larry Diamond and Peter Gray in 2013 and listed on the ASX in 2015, zipMoney is a ‘buy now, pay later’ finance product; integrating with both online and in-store payment systems, it allows merchants to offer customers the ability to buy and pay later, with a fraud and credit decisioning engine working to deliver real-time analysis.
Gary Thursby, Westpac Group Executive, Strategy and Enterprise Services, said the bank is excited to be working with a company with a “strong vision” for the future of payments in Australia.
“Zip’s real-time data analytics and proprietary platform offer customers seamless payment solutions. We look forward to working with Zip to develop these capabilities and offer Westpac customers more choice in the changing payments landscape,” he said.
CEO and managing director of zipMoney, Larry Diamond added the strategic investment from Westpac is a “truly transformational” moment for the company.
“It is a serious validation of the success of the Zip platform and offering, and the strategic relationship arrangements will deliver a significant opportunity to further accelerate the growth of our merchant network and origination volumes,” he said.
The investment comes after a big few months for the company, which secured a $260 million debt facility led by National Australia Bank in May.
It reports having over 600,000 customers across its zipMoney and Pocketbook products, with 1,200 being added every day. These have come with retailers including Kathmandu and Harris Farm joining the zipMoney platform; there are over 4,000 partners now using the platform both online and in-store, seeing $53 million in transaction volume processed on the platform over April and May.
The company had last year raised $20.6 million through a share placement, in part to fund its acquisition of Pocketbook for $7.5 million in September.
zipMoney said at the time that the acquisition supported its vision to “create a new financial services model that is built around honesty, visibility, and empowering consumers to make better financial decisions, improving their lifestyle.”
This is the latest strategic investment into a fintech from Westpac itself, which invested $16.5 million into online home loan platform Uno last September. Having been involved with the startup since its initial concept stage, the investment technically represented the cumulative amount Westpac had poured into the startup since development began in late 2015.
Westpac is also the majority backer of venture capital firm Reinventure.
Image: Peter Gray and Larry Diamond. Source: Supplied.