Monday June 17, 2024 3:35 PM
Buy-now pay-later firm Laybuy has today gone into administration after attempts to find a rescue buyer failed.
The Kiwi fintech company, which launched in 2017 and once had about 766,000 customers in the UK, Australia and New Zealand, put itself up for sale in April and sought to delist from New Zealand junior exchange Catalist. City AM previously revealed.
However, in a statement today, founder and director Gary Rohloff confirmed that no buyer had emerged and that the payments company had voluntarily engaged administrators in New Zealand.
“I am absolutely heartbroken by today’s decision to apply for the appointment of receivers to the Laybuy Group,” said Rohloff.
“This is a devastating time for the Laybuy team and I will do everything I can to support them as we navigate this process.”
Rohloff pointed to the “economic downturn” and subsequent pressure on the retail sectors in New Zealand and Britain as the reasons for the company’s collapse.
A source said the process was being carried out separately in Britain and a decision had yet to be made on who would handle the liquidation of the company. Friday’s files show that law firm Pinsent Masons handled the process of appointing an administrator.
The move is likely to leave Laybuy’s 70 global employees without jobs and marks a sharp decline for a company that was plotting expansion in Britain just 18 months ago.
There has been speculation about the company’s future after it disabled all of its payment products for users last Wednesday, with a statement on its website claiming it was “undergoing maintenance and will be back soon”.
It is unclear what impact the collapse will now have on customers who borrowed through the platform to pay for goods.
The company benefited from the buy-now-pay-later boom during the pandemic, fetching a valuation of around $358m (£184m) when it raised $80m (£40m) on the Australian stock market in 2020.
Last January the company delisted from Sydney after a share price drop and said it would switch to small business-focused market Catalist.
As of Friday, the fintech currently had a market value of around £2.79 million.
While Laybuy’s active UK customers peaked at around 610,000 in March 2022, that number had fallen to around 484,000 by the end of the year.
Laybuy removed major retailers such as Amazon, Ebay and Marks & Spencer from its platform in April.
Since the company’s launch seven years ago, the wider BNPL sector has struggled with the threat of increased regulation across all markets and increased competition from established payments companies.
BNPL companies are also embroiled in a broader slowdown in the technology sector, amid rising costs and a lack of financing.
Swedish fintech Klarna is the UK’s largest BNPL provider with around 18 million customers, followed by Clearpay and Zilch. Major banks such as HSBC, Natwest and Virgin Money have also tried to capitalize on the huge demand for interest-free installment loans.
Analysts at Moody’s warned in a report last November that “few BNPL companies will remain independent,” as some are acquired and others cease operations amid mounting headwinds.