<ul><li>Australian BNPL provider Zip Co and US BNPL player Sezzle have reached a definitive agreement that will see Zip Co acquire the US player for AUD 491 million (approx. USD 352 million) in an all-share deal. The deal is a 22% premium to Sezzle's last closing price, and its shareholders will own 22% of the combined company. Sezzle’s Chief Executive Charlie Youakim will lead Zip's US business, which also includes its QuadPay business. The deal was reported to be in the initial stages in January.</ul>

• Sezzle is a BNPL platform offering consumers the ability to convert their purchases into four interest-free payments over six weeks. Shopping through the Sezzle app, users can convert transactions at checkout. The company also provides a Sezzle virtual card (launched in September 2020) for purchases online or in-store, restricted to merchants already integrated with the platform. The company currently operates in the US and Canada, while experimental operations are underway in India (beginning in July 2020), with plans to expand to Europe. The company reported a positive net transaction margin (NTM) of USD 12.4 million in FY2020; however, it is yet to reach profitability with an operating loss of USD 28 million in FY2020. The company expects its platform merchant sales to reach an annualized run rate of USD 2.5 billion in FY2021.

• Zip also 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 are expected to strengthen Zip’s balance sheet and provide runway capital for expansions in the future. 

<ul><li> Analyst QuickTake: Zip has a history of expanding geographically through acquisitions; this strikes a similar chord and positions it to compete with the likes of Affirm and Klarna in the US. The combined entity will have a total of 8.8 million customers and over 60,000 merchants in the US. Zip expects to turn profitable by 2024 from the cost savings resulting from the synergies. The industry is also undergoing a period of consolidation marked by Square’s acquisition of Afterpay last August and Latitude Group Holdings Ltd’s proposal to purchase Humm Consumer Finance in January 2022 .</ul>