The buy-now-pay-later train is showing no signs of slowing down with Australian investors keen to jump aboard new BNPL investment opportunities as evidenced by the opening day of trade for Laybuy Group (ASX: LBY) as an ASX-listed company.
Founded in 2017 by Gary Rohloff and his family in New Zealand, Laybuy Group has emerged as the primary BNPL platform in New Zealand, while also operating in Australia and the United Kingdom.
Raising $80 million from its IPO at an Offer Price of $1.41 per share, early investors were quickly in front on LBY’s official listing on the ASX yesterday when shares opened at $2.10, an instant rise of 49.8% on their IPO price.
Investors who missed out of the stock quickly piled into on-market purchases, pushing LBY shares as high as $2.30 before closing their first day on the boards at $2.05.
Rohloff and his wife Robyn are firmly entrenched as the largest equity holders of the Company with 29.56% ownership retained with funds raised from the IPO to be applied towards expansion in the UK where the Company has brand partnerships with English Premier League teams Manchester City, Manchester United and Arsenal.
As has become the norm within the BNPL sector, Laybuy does not charge interest or admin fees to customers who repay their purchases in six weekly installments, but does charge late fees for missed payments.
The Company already boasts more than 470,000 active customers and 5,600 merchant partners, which for FY20 delivered the Company NZD $13.74m in revenue. Like other operators however, Laybuy is not yet profitable, having reported a $16m loss – a trend in the BNPL space where competitors Afterpay Ltd (ASX: APT) reported a $19.8m loss and Zip Co (ASX: Z1P) a $20m loss.
Unlike its competitors, Laybuy runs credit checks on its customers via independent third parties and has a Laybuy Boost function enabling customers to exceed their purchase limit by paying the difference of the purchase and their cap upfront.
The BNPL sector is expected to see change over the coming months as payments conglomerate PayPal (NASDAQ: PYPL) prepares to launch its BNPL product shortly, to its existing 300 million customers, a competitor welcomed by the Laybuy founder.
“It’s a great thing when you have a brand like PayPal come into the sector it legitimises the sector,” said Rohloff.
“I think PayPal will accelerate the adoption of this technology by consumers.”
LBY shares were again in hot demand on their second day of trade on the ASX, opening at $2.17.
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