Zip Co’s (ASX: Z1P) global expansion plans are being realised with the Company today announcing the next steps for their push into overseas markets through the outright acquisitions of European BNPL provider Twisto Payments, and UAE-based BNPL leader Spotii Holdings.
The move aligns with Zip’s strategic acquisitions plan. Both companies have been integrated into Zip’s global Single Merchant Interface which provides merchants with access to 11 countries across 5 continents.
Zip’s global expansion is more than a lofty aspiration. Following the acquisition of QuadPay in the US, annual transactions skyrocketed by over 200%, proving that Zip’s approach and integration is effective.
The Twisto acquisition will allow access across 27 European union countries, representing the second largest eCommerce market with an annual volume of $1.1 trillion from more than 1 million customers.
Spotii was founded in 2020 and has shown good traction with 650 merchants already utilising the platform. Their total transaction volume has grown at an average of 90% month-on-month since founding. The acquisition of Spotii will establish Zip as a significant player in one of the fastest growing eCommerce regions in the world, with online spending increasing at a rate of 25% each year.
Co-founder and CEO of Zip Co, Larry Diamond said “The acquisition of Twisto shows our commitment to global growth and follows our ‘Coalition of Founders’ model, where we back strong founders with a shared vision and deep cultural alignment in our quest for global payments coverage. We are very much looking forward to adding this strategic geography to our growing footprint and fulfilling global merchant demand.”
“The Spotii acquisition is an important step in Zip’s global expansion and international strategy, with eCommerce in the Middle East on a significant upward trajectory. We have been working with Spotii since our initial investment in December 2020 to broaden our understanding of the BNPL opportunity in the region and have a number of exciting global merchants we are looking forward to activating in the coming months. We also believe there is a large untapped opportunity to bring BNPL to emerging markets where cash on delivery remains a significant merchant challenge, and where the digitisation of retail accelerates.”
Already existing stakeholders, Zip previously reported a $3.2 million investment in Twisto for an undisclosed minority share as well as $3.1 million for 20% of Spotii.
Having become familiar with both businesses through their minority interests, Zip’s outright purchase of Twisto has been secured for $140m alongside the remaining 80% stake in Spotii for $21m.
The exact breakdown of funding between cash and new Z1P shares is still to be confirmed closer to settlement by Zip Co pending Placement capacity and the difference between VWAP and minimum $6.00 Issue Price.
Spotii is expected to settle by 31 September 2021 and Twisto by 31 December 2021 with both subject to a number of prescribed conditions precedent.