Online payments service Square will acquire AfterPay in a deal valued at a whopping $29 billion. Square cofounder and CEO Jack Dorsey (who also cofounded and is CEO of Twitter) said together, the two companies can better connect their ecosystems to deliver even more compelling products and services for merchants and consumers.
Buy Now, Pay Later has been around for a long time. Bill Me Later pioneered the model, with Amazon owning a stake early on. After eBay acquired it in 2008, however, Amazon stopped accepting Bill Me Later on its platform.
According to Square’s press release, “The acquisition aims to enable the companies to better deliver compelling financial products and services that expand access to more consumers and drive incremental revenue for merchants of all sizes. The closing of the transaction is expected in the first quarter of calendar year 2022, subject to the satisfaction of certain closing conditions outlined below.”
Afterpay serves over 16 million consumers and nearly 100,000 merchants globally, including major retailers across key verticals such as fashion, homewares, beauty, sporting goods and more.
The company describes Afterpay’s value proposition for shoppers as empowering consumers to access the things they want and need, while allowing them to maintain financial wellness and control.
It describes the value proposistion for sellers as assisting merchants in growing their businesses by helping to drive repeat purchases, increase average transaction sizes, and provide their buyers with the ability to pay over time.
Afterpay’s cofounders and co-CEOs will join Square upon completion of the transaction, and Square will appoint one Afterpay director as a member of the Square Board following closing.
“The transaction has an implied value of approximately US$29 billion (A$39 billion) based on the closing price of Square common stock on July 30, 2021, and is expected to be paid in all stock.”