Afterpay Reaches out for the UK
Considering how successful their service has been in Australia and in the US, Afterpay aims for the UK. This announcement follows a $117 million funding round and their acquisition of a majority stake in ClearPay, a British company with similar core business. This strategic choice makes much room for their prime target: Millennials.
Afterpay recently released their yearly results and reported 390% increase in revenue. Their network of partner retailers increased from 6,000 last year to 17,700 this year, encouraging them to further expand their international reach, deeming that the British market would be a perfect fit.
The UK e-commerce market is indeed flourishing (ranked 3rd worldwide, and worth more than £130 billion). Afterpay’s acquisition of a majority stake in ClearPay appears as an opportunity for them to launch their “Buy Now, Pay Later” solution in this country. ClearPay features an instalment service (splitting payments in 3 instalments at no extra cost, up to £450).
This FinTech also has partnerships in place with retailers in Australia, New Zealand and in the US. These retailers are also present in the UK: more chance for Afterpay to establish themselves and become familiar with the British regulatory landscape.
Comments – The UK market increasingly targeted
The Australian FinTech has been quite successful so far and is now aiming for Europe via an initial implantation in the UK. Indeed, this country does show huge market opportunities: ClearPay’s retailers and customers will be relying on Afterpay’s platform, to launch within the next six months. This increasing merchant base accounts for the improvements in Afterpays’ results: they only charge merchant fees since their product does not apply interest rates. They now have2.3 million customers.
In the meantime, other industry players, including Goldman Sachs (with Marcus) are getting ready to launch consumer lending offers in the UK.
With this acquisition, Afterpay keeps focusing on their favourite targets: GenYers, more reluctant to using credit cards and interested in receiving the items they ordered before paying for them, especially when spread payments are among options.