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Lending Briefing: Could we see more BNPL consolidation this year?

  • Given the growth and interest in the space, companies have increasingly been looking to get a piece of the BNPL pie.
  • As fintechs mature in their niche markets, larger players might continue to see this as an opportunity and go for it.
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Lending Briefing:  Could we see more BNPL consolidation this year?

2021 was an active year for fintech consolidation, so what could this year have in store for us?

When thinking about where M&A fever could strike next, some of the most obvious places to look are marketplaces with a lot of players, hype and money. Hmm, so… BNPL? 

Just yesterday, Australian BNPL firm Zip confirmed that it is in talks to acquire US rival Sezzle, adding to its deal repertoire as it looks to compete with the likes of Klarna and Afterpay in the booming BNPL market.

Given the growth and interest in the space, companies have already been looking to get a piece of the BNPL pie. Last year, we saw Square buy Afterpay in an all-stock deal valued at $29 billion – the largest M&A deal of the year in US fintech. PayPal’s BNPL product Pay in 4 will be joined by an acquisition of Japanese BNPL Paidy in a $2.7 billion deal.

And banks are getting in on this, too. Goldman Sachs acquired BNPL firm GreenSky for $2.24 billion, and will integrate it with Marcus by Goldman Sachs, its consumer-facing business.

As fintechs mature in their niche markets – providing specialist products, establishing wider customer bases and developing their brands – larger players might continue to see this as an opportunity and go for it. 

 


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