Klarna swoops in to buy collapsed rival Laybuy
Buy-now pay-later (BNPL) giant Klarna has snapped up its collapsed rival Laybuy after the Kiwi fintech folded into receivership earlier this year, City A.M. has learned.
Laybuy, which launched in 2017 and once boasted around 766,000 customers across the UK, Australia and New Zealand, was placed into receivership in June after an emergency sale process failed to yield a buyer.
However, Swedish behemoth Klarna has now confirmed a deal to buy the company’s New Zealand assets in the coming days in a move that will extend its reach into the country, sources told Morning Wire
The deal will likely see Klarna revive the company’s app, while customers of the firm and its deals with retailers will be shifted onto Klarna’s books.
However, Laybuy is expected to operate under distinct branding in New Zealand where it was formerly among the country’s best known fintech firms.
While Klarna already operates in New Zealand, the $7.85bn fintech shrunk its headcount in the country from six to two people in between 2022 and 2023, according to its annual report.
It is unclear how the former staff of Laybuy will be affected and whether any staff will be included in the terms of the deal. The company’s UK and Australian assets are not expected to be included.
Deloitte, which was appointed as receivers of the brand in New Zealand, did not immediately respond to requests for comment.
Speaking after the company called in receivers in June, Laybuy founder Gary Rohloff said he was “heartbroken” by the move and pointed to the “economic downturn” and a subsequent squeeze on the retail sector as the reason for its collapse.
The move capped off a rapid downfall for the company that floated at a valuation of $358m (£184m) on the Australian stock market in 2020 and was plotting expansion in the UK as recently as 18 months ago.
Last January, the company scrapped its Sydney listing after a slump in its share price and said it would swap to the small business-focused New Zealand stock market, Catalist.
While Laybuy’s active UK customers peaked at around 610,000 in March 2022, that number had slumped to roughly 484,000 at the end the year.
Laybuy removed major retailers like Amazon, Ebay and Marks & Spencer from its platform in April.
Since the firm’s launch seven years ago, the wider BNPL sector has grappled with the threat of tighter regulation across markets and increased competition from incumbent payment firms.
BNPL firms have also been embroiled in a wider slowdown across the tech sector amid rising costs and a dearth of funding.
Klarna itself was forced to lay off around ten per cent of its global staff after facing a huge 85 per cent haircut to its $45.6bn valuation when raising cash in 2022.
However, the firm is now gearing up for an IPO next year in the US, where it is reported to be targeting a $20bn valuation.