Zip Co

Zip Co is an Australian BNPL service provider offering both B2C and B2B solutions. The platform’s B2C products are Zip Pay and Zip Money. Zip Pay is designed for transactions between AUD 250 and AUD 1,000 (approximately USD 185 and USD 735). Zip Money is marketed for larger ticket purchases (i.e. over AUD 1,000/USD 735) with a three-month interest-free period and flexible terms afterward. Zip Co charges merchants a transaction fee of AUD 0.3 plus GST and a fixed merchant fee. For customers, it charges a one-off establishment fee of AUD 25 (approximately USD 18) and upward at the sign-up stage, 19.9% interest after the three-month interest-free period, and an account service fee of AUD 6 (approximately USD 5) for late payments. In October 2022, the company launched the Zip Card in partnership with WebBank, where installment payment options will be available at all retail stores that accept Visa.

Zip Co offers B2B solutions via Zip Business, for transactions ranging from AUD 1,000 to AUD 3,000 (approximately USD 735 to USD 2,210), and Zip Business Trade Plus, which facilitates payment plans for larger ticket items where transactions range between AUD 3,000 to AUD 150,000 (approximately USD 2,210 to USD 110,000). It charges late payment fees including AUD 25 (around USD 18) for Zip Business and a 3% fee for Zip Business Trade Plus customers to extend financing to a four-month installment plan after the initial 60-day grace period. 

Zip Co focused on M&As for growth outside Australia and it usually makes minority investments in its targets prior to the ultimate acquisition. It acquired Spotii (May 2021) to expand to the Middle East and more recently entered South Africa through the acquisition of Payflex (September 2021). Moreover, it entered the US (its biggest market as of September 2021) by acquiring QuadPay (June 2020). Other acquisitions include Spotcap (September 2019) and Twisto (May 2021). It also had interests in the Asian BNPL market through investments in Indian player ZestMoney, and Philippines-based TendoPay.

In February 2022 , Zip announced a definitive agreement to acquire Sezzle for USD 352 million, which was later terminated in July 2022 . Zip also announced its exit from the UK and Singapore markets, which it completed during 4Q 2022. As of March 2023, Zip was in the process of closing its operations in Mexico and the Middle East and announced its exit from an additional six markets by June 2023. In January 2024 , Zip announced the shut down of its Zip Business Capital ANZ subsidiary, selling its loans operation to Prospa, an SME lender, for AUD 15.6 million (~USD 10.3 million).

Key customers and partnerships

In September 2023, Zip partnered with Primer , a global payment infrastructure provider, to enhance its payment stack and drive growth in the US market. In May 2023, ​​ Zip collaborated with New Zealand-based Centrix, a credit bureau, to develop a credit reporting system, PayWatch . In November 2021, Zip Co announced a partnership with US-based WebBank to launch Zip Card, a physical card-based BNPL solution that is linked to the customer’s debit card, enabling users to make biweekly payments automatically. Zip Co planned to roll out the card in 2021 and 2022. 

Funding and financials

In September 2015, Zip Co debuted on the Australian Securities Exchange, raising USD 5 million through a reverse takeover (SPAC) of Rubianna Resources. In February 2022, Zip announced roughly AUD 200 million (approx. USD 142 million) in funding through an AUD 148.7 million (approx. USD 106 million) fully underwritten share placement for institutional investors and a share purchase plan of AUD 50 million (approx. USD 36 million). The funds were expected to strengthen Zip’s balance sheet and provide runway capital for expansions in the future. This followed its AUD 400 million (approximately USD 308 million) financing via convertible notes to support its global expansion, particularly into Asia. Furthermore, it was also revealed that the company aims to set up in Singapore, Malaysia, Thailand, the Philippines, and India. 

In FY2023, Zip reported AUD 677.2 million (~USD 433.6 million) in revenue, reflecting a growth of 16.8% YoY. This was driven by an 8.1% YoY increase in transaction volume to AUD 8.8 billion (~USD 5.6 billion). However, Zip’s loss before tax stood at AUD 372.3 million (~USD 238.4 million) for FY2023, compared to AUD 808.1 million (~USD 517.4 million) recorded in FY2022.