‘Heartbroken’: Major buy-now pay-later firm collapses after failing to find a buyer
Buy-now pay-later firm Laybuy has collapsed into receivership today after efforts to find a rescue buyer failed.
The Kiwi fintech firm, which launched in 2017 and once boasted around 766,000 customers across the UK, Australia and New Zealand, put itself up for sale in April and was looking to delist from the New Zealand’s junior stock exchange Catalist, Morning Wire previously revealed.
However, in a statement today founder and managing director Gary Rohloff confirmed a buyer had failed to emerge and the payments company had voluntarily called in receivers in New Zealand.
“I am absolutely heartbroken at today’s decision to request the appointment of receivers to the Laybuy Group,” Rohloff said.
“This is a devastating time for the Laybuy team, and I will be doing everything I can to support them as we go through this process.”
Rohloff pointed to the “economic downturn” and a subsequent squeeze on the retail sector in New Zealand and the UK as the reasons for the firm’s collapse.
A source said the process was being run separately in the UK and a decision had yet to be made on who would handle the winding up of the company. Filings on Friday show law firm Pinsent Masons was handling the process of appointing an administrator.
The move is likely to leave Laybuy’s 70 global staff without jobs and marks a sharp fall for a company which was plotting expansion in the UK as recently as 18 months ago.
Speculation had been swirling around the future of the company after it disabled all of its payment products to users last Wednesday, with a statement on its website claiming it is “undergoing maintenance and will be back soon”.
It is unclear how the collapse will now impact customers that have borrowed through the platform in order to pay for goods.
The company was a beneficiary of the boom in buy-now pay-later through the pandemic and fetched a value of some $358m (£184m) when it raised $80m (£40m) on the Aussie stock market in 2020.
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 market Catalist.
As of Friday, the fintech currently had a market value of around £2.79m.
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.
Swedish fintech Klarna is the UK’s largest BNPL provider with some 18m customers, followed by Clearpay and Zilch. Big banks like HSBC, Natwest and Virgin Money have also attempted to cash in on the boom in demand for interest-free instalment loans.
Moody’s analysts warned in a report last November that “few BNPL companies will remain independent” as some are acquired and others cease operations due to the growing headwinds.