PayPal Acquires Paidy, a “Buy Now, Pay Later” provider for US$2.7 billion

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M&A Update

American online payment company PayPal has agreed to acquire Paidy, a Tokyo-based “buy before pay” group, for 300 billion yen (US$2.7 billion). This is the latest restructuring of the industry.

The transaction, announced late on Tuesday, will be paid mainly in cash, deepening PayPal’s push in the crowded BNPL field, where consumers amortize the cost of goods into small payments, usually without interest, and often No credit check required.

Last month, Square, a payment company led by Twitter CEO Jack Dorsey, get BNPL Group Afterpay acquired for US$29 billion, which is the largest acquisition in Australian history.

The share price of Affirm, another BNPL company based in San Francisco, was announced last month Cooperation with Amazon Shoppers who spend more than $50 are allowed to pay in monthly installments.

Paidy was founded in 2008 and is one of the few “unicorns” or start-ups worth more than $1 billion in Japan. The company launched the country’s first zero-interest post-payment service last year.

Although the global BNPL market is very popular due to the pandemic-driven online shopping boom, this trend has only just begun to become popular in Japan, and consumers there are still Heavy reliance on cash Payment.

Paidy allows its 6 million registered users to divide the cost of goods into three equal parts without interest. The user can pay the balance using cash or bank transfer at a convenience store.

According to Yano Research Institute, the volume of transactions conducted through post-payment services in Japan is expected to increase from 882 billion yen in fiscal year 2020 to 188 million yen in fiscal year 2024.

Paidy was valued at $1.3 billion when it raised $120 million in March and is expected to be listed in Tokyo later this year. It is supported by ITOCHU Trading Company, Goldman Sachs and Soros Capital Management, and PayPal.

Russell Cummer, the founder of Japanese fintech, recently Tell the financial times Public listing “makes sense”-although there is no set timetable. Instead, the company is now expected to become part of PayPal in the fourth quarter of this year.

Peter Kenevan, Vice President and Head of Business of PayPal, said: “Paidy pioneered a’buy first, pay later’ solution tailored for the Japanese market, and it has quickly grown into a leading service, developing a huge two-way relationship between consumers and merchants. Platform.” In Japan.

“Combining Paidy’s brand, capabilities, and talented team with PayPal’s expertise, resources, and global scale will lay a solid foundation for us to accelerate development in this strategically important market.”

PayPal stated that Paidy will “continue to operate its existing business, maintain its brand and support various consumer wallets and markets.” According to a statement, Riku Sugie, President and CEO of Cummer and Paidy, will continue to lead the company.

“Paidy is just the beginning of our journey. Joining PayPal will accelerate our plan to expand our business beyond e-commerce and establish unique services as the new shopping standard,” Sugie said. “PayPal is the founding partner of Paidy Link, and we look forward to creating more value together.”

This acquisition coincides with PayPal’s launch of its Broader strategy Become a “super app”—a combination of payment, cryptocurrency investment and savings—drawing inspiration from local Chinese apps such as WeChat.

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