Buy now, pay later (BNPL) firm Sezzle Inc is in talks to be acquired by larger Australian rival Zip Co Ltd, the companies has said, sending shares of Sezzle soaring 23% during the session.
The companies said in separate statements that talks were at an early stage and there was no certainty that a deal would materialise. US-based Sezzle has a market capitalisation of almost A$425 million (approximately $303.5 million), while Zip is valued at A$1.94 billion.
Zip has been actively deal-making over the last year to build scale to compete with rivals including Klarna and Block Inc’s Afterpay.
The talks, earlier reported by the Australian newspaper in November, come at a time of rapid consolidation in the BNPL sector, which has seen a meteoric rise during the pandemic as customers thronged to online shopping and preferred alternate sources of credit to pay for purchases.
Sezzle shares posted biggest jump since June 2021 in late-afternoon trade, while Zip added as much as 5.8% before turning negative in a broadly lower Australian market.
BNPL stocks, which soared during the early days of the pandemic, have fallen out of favour recently, as the prospect of interest rate hikes in the United States and Australia dent investor sentiment.
The team at Platform Executive hope you have enjoyed the ‘Buy now, pay later firms Zip, Sezzle confirm merger talks‘ article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Initial reporting via our official content partners at Thomson Reuters.
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