Klarna rival Laybuy hauls in A$35m to boost its footprint in the UK

New Zealand-based buy now pay later firm Laybuy has closed a A$35m capital raise to further its push into the UK market.

The capital raise comes in the form of a private placement and will be used to invest further in technology, marketing and people. More importantly, the cash injection will fuel further funding to support Laybuy’s growth strategies in the UK.

The placement will be completed in two phases with phase one issuing 26,169,334 shares to institutional and sophisticated investors at A$0.50 per share, raising a total of A$13.1m before costs. Phase two which is subject to shareholder approval will see 43,830,666 shares issued at 50 cents to raise the remaining A$21.9m.

In addition to the funding round, Laybuy also confirmed its strategic partnerships with Rakuten, AWIN and Sovrn, which will see Laybuy customers having access to over 5,000 merchants in the UK including household brands ASOS, Nike, Marks & Spencer, Amazon and eBay.

Founded in 2017 by Gary Rohloff, Laybuy lets customers shop, receive their purchase straight away and pay it off over six weekly payments without interest. The company operates in New Zealand, Australia, the UK and the USA.

Laybuy’s ‘Tap to Pay’ digital card enables customers to pay both online and in-store without further merchant integration or direct relationship required.

Commenting on the round, Rohloff said, “The opportunity in the UK market should not be underestimated. The UK has a retail market approximately 2.2 times larger than the Australian market in terms of overall spending. It is also a market where a higher proportion of retail spending is online, and where BNPL is still in early stages of adoption.”

He added that UK consumers spent more than £151m through Laybuy in the past year, up 504% the previous year, making it a key market to expand to.

“This capital raise is an important step for Laybuy, enabling the company to continue its strong momentum and to capitalise on the significant growth opportunity in the UK market. We believe this will maximise shareholder value in the longer term,” Rohloff added.

The BNPL market is indeed exploding with a slew of startups such as Butter and Zilch mushrooming across the globe. The one to lead the sector is Klarna, a Stockholm-based e-commerce payment solutions platform for merchants and shoppers, which became the highest-valued private FinTech in Europe after a powerful $1bn funding round pushed its valuation to $31bn.

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