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Zip Co (ASX:Z1P) - Founders Peter Gray (left) and Larry Diamond (right)
Founders Peter Gray (left) and Larry Diamond (right)
Source: Sydney Morning Herald
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  • Afterpay rival Zip Co (Z1P) will buy up the remaining shares in New York-based buy now, pay later company QuadPay in a scrip deal worth $403 million
  • Zip says this purchase builds on its global strategy and gives it access to the world’s largest retail market
  • The United States retail market is worth over US$5 trillion, which is more than 15 times the size of the Australian market
  • After the purchase, the group will have operations across five countries with a combined annual total transaction value of $3 billion
  • Additionally, the company has entered into an agreement with CVI Investments to raise up to $200 million to drive growth
  • Zip is up 42.13 per cent on the market this afternoon, selling shares for $5.33 each

Afterpay rival Zip Co (Z1P) will purchase the remaining shares in a New York-based buy now, pay later company, QuadPay, in a scrip deal worth $403 million.

Under the purchase deal, QuadPay shareholders will be entitled to receive up to 119 million Zip shares, which is 23.3 per cent of the whole share capital of Zip.

Zip says this purchase builds on its global strategy by giving it access to the world’s largest retail market. The United States retail market is worth over US$5 trillion, which is more than 15 times the size of the Australian market.

Buy now, pay later (BNPL) schemes with interest-free instalments are changing the way people pay and QuadPay is one of the largest BNPL platforms in America. Since it started up in 2017, the business has grown to more than 1.5 million customers.

After the purchase, Zip Co will have operations across five countries with a combined annual total transaction value of $3 billion.

ZIP CEO and Co-Founder Larry Diamond said he has spent considerable time with the founders of QuadPay, Brad Lindenberg and Adam Ezra, and they share a common vision.

“The U.S. is a critical part of our global strategy and vital as merchants increasingly look for a global payments solution,” he said.

Larry was very impressed with QuadPay as they were the first to market a virtual card solution in the BNPL sector.

Brad and Adam said they are “thrilled” to be joining Zip.

“This is a great opportunity for QuadPay and our team to join Zip in establishing a truly global BNPL platform and scaling even faster. A generational change is underway — customers are changing the way they pay, leaving behind credit cards and gravitating towards interest-free instalments,” Brad and Adam said.

“By combining Zip’s resources, geographic coverage, data capabilities, category leadership and experience, we look forward to driving strong growth together in North America and across core markets,” they added.

Additionally, Zip Co has entered into an agreement with CVI Investments to raise up to $200 million to drive growth. The funds will be raised by issuing convertible notes and the exercise of warrants.

Zip is up 42.13 per cent on the market this afternoon, selling shares for $5.33 each at 2:30 pm AEST.

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