Monday, June 17, 2024 at 3:35 p.m
Buy-now-pay-later firm Laybuy collapsed into receivership today after efforts to find a rescue buyer failed.
The Kiwi fintech firm, which launched in 2017 and once boasted around 766,000 customers in the UK, Australia and New Zealand, put itself up for sale in April and was set to delist from junior NZ exchange Catalist, City AM previously revealed.
However, in a statement today, founder and chief executive Gary Rohloff confirmed that the buyer had not appeared and the payment company had voluntarily called in receivers in New Zealand.
“I am absolutely heartbroken by today’s decision to apply for the appointment of receivers to the Laybuy group,” Rohloff said.
“This is a devastating time for the Laybuy team and I will do everything in my power to support them as we go through this process.”
Rohloff pointed to the “economic downturn” and subsequent pressure on the retail sector in New Zealand and the UK as reasons for the firm’s collapse.
The source said the process was being carried out separately in the UK and a decision on who would handle the company’s liquidation had yet to be made. Friday’s filing shows that law firm Pinsent Masons handled the process of appointing a trustee.
The move is likely to put Laybuy’s 70 global staff out of a job and marks a sharp fall for the company, which only 18 months ago was planning to expand in the UK.
Speculation swirled around the company’s future after it disabled all of its payment products to users last Wednesday, saying on its website that it was “undergoing maintenance and will be back soon.”
It is unclear how the collapse will now affect customers who borrowed through the platform to pay for goods.
The company benefited from the buy-now pay-later boom during the pandemic and was valued at around $358m (£184m) when it raised $80m (£40m) on the Australian stock market in 2020.
Last January, the company pulled its Sydney listing after its share price slumped and said it would move to small business marketplace Catalist.
As of Friday, the fintech currently had a market value of around £2.79 million.
While active Laybuy customers in the UK peaked at around 610,000 in March 2022, this number fell to around 484,000 at the end of the year.
In April, Laybuy removed major retailers such as Amazon, Ebay and Marks & Spencer from its platform.
Since the firm was founded seven years ago, the wider BNPL sector has faced the threat of tighter regulation across markets and increased competition from established payments firms.
BNPL has also been embroiled in a broader slowdown across the technology sector due to rising costs and lack of funding.
Swedish fintech Klarna is the UK’s largest BNPL provider with around 18 million customers, followed by Clearpay and Zilch. Big banks such as HSBC, Natwest and Virgin Money have also tried to capitalize on the boom in demand for interest-free installment loans.
Analysts at Moody’s warned in a report last November that “several BNPL companies will remain independent” as some are acquired and others wind down due to mounting headwinds.