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I find Zip Co Limited an interesting stock at this time. It seems many people are jumping on board with the momentum of this stock. A 300m debt deal is appetising, while racking up $71.7 million in quarterly revenue, a new record. Additionally, monthly arrears have decreased, which is a good sign. With the Christmas period quickly approaching it could be imagined that more people will use the buy now, pay later option. Covid19 has left many jobless and with less disposable income and therefore, the product may achieve our community’s estimations. I currently do not own the stock but if it comes into the $6 price range I will be jumping on board.
Zip Co Limited (ASX: Z1P) has today marked the official launch of Zip Business by partnering with eBay Australia, to offer its 40,000 Australian small and medium-sized businesses the opportunity to access working capital via the eBay marketplace.
The partnership between eBay and Zip Business is designed to give merchants the freedom to purchase inventory, cover short-term expenses such as marketing campaigns, and manage their cashflows, via access to flexible lines of credit. As part of the official launch, Zip is bringing the Spotcap brand into the Zip Business portfolio.
Zip Business will be leveraging the deep credit experience in the Spotcap business and combining it with Zip’s sophisticated risk decisioning and real-time onboarding to rapidly scale the SMB Buy Now Pay Later offering.
This partnership is the first in an exciting series of integrated products and solutions Zip will progressively roll out as it launches Zip Business, supporting both SMBs and its retail and channel partnerships.
Peter Gray, Co-founder and Chief Operating Officer, said: “Zip is extremely excited to formally launch its Zip Business platform to create a suite of products for the small business community, a segment that has been underserved by the traditional lenders in recent years. This comes at a time when Australia’s small businesses are confronting the extreme challenge of COVID-19, which has created enormous pressure on cashflow and ongoing business investment. A thriving small business community is critical to the health of the Australian economy and we are deeply committed to supporting the growth of these important businesses”.
Debt Funding Zip is also pleased to announce that it has agreed to a A$100 million debt funding facility with US firm Victory Park Capital Advisors, LLC (VPC) to fund the Zip Business receivables. Once established, the facility will give Zip the flexibility and capacity required to support the launch of Zip Business.
Zip has a strong partnership with VPC. In November 2015, Zip announced a A$108 million asset backed warehouse facility with the firm, which grew to $200m, making it one of Zip’s earliest debt facility partners.
ZIP ANNOUNCES PARTNERSHIP WITH EBAY, LAUNCHES ZIP BUSINESS
Zip Co Limited (ASX: Z1P) (“Zip” or “the Company”) has today marked the official launch of Zip Business by partnering with eBay Australia, to offer its 40,000 Australian small and medium-sized businesses the opportunity to access working capital via the eBay marketplace.
I hold ZIP shares
Z1P - QUADPAY ACHIEVES RECORD MONTH, SECURES MERCHANTS WITH OVER $3BN IN COMBINED VOLUME, FORGES NEW PARTNERSHIPS
Achieved record monthly transaction volume in excess of US$70M in July, representing a 30% increase on the June quarter average and a 600%+ increase YoY.
Added 133,000 customers in July and surpassed the 2M customer milestone in August.
Partnered with multiple Internet Retail 100 merchants including Fanatics and Mercari (TYO:4385) representing combined online volume of over US$3bn. Other notable merchant onboardings include Caleres Group (NYSE: CAL). Enterprise sales pipeline going into the holiday period continues to remain strong.
Established a strategic partnership with Fiserv (NASDAQ: FISV) to offer Buy Now Pay Later (“BNPL”) services across their US based merchant base, launching with Fanatics.
Partnered with MasterCard Vyze to enable BNPL within the Vyze alternative lending stack.
QuadPay continues to deliver industry leading net transaction margins (NTM) greater than 2%.
Secured a debt facility of up to US$200m provided by Goldman Sachs and Oaktree.
Let's try that with the right file. Financial Review Article June 8,2020
Zip Co Limited (ASX: Z1P) (Zip or the Company) is pleased to provide a trading update for the first four monthsof FY21, ended 31 October 2020.
COMPANY HIGHLIGHTS
20 October 2020
ZIP UNLOCKS EVERYDAY PAYMENTS WITH TAP & ZIP
Zip Co Limited (ASX: Z1P)(“Zip” or “the Company”)today announces the official launch of Tap & Zip, a new product feature that reimagines buy now, pay later (BNPL) instore by enabling Zip Pay users to shop effortlessly anywhere that accepts Visa.
Tap & Zip builds on Zip’s mission to be the first payment choice everywhere and everyday. It will see Zip expand into more everyday spend categories and capitalise on the significant instore payments opportunity. Currently, just 13%2 of stores in Australia are able to accept buy now, pay later options. Tap & Zip addresses this significant and untapped customer need.
Today’s announcement underscores Zip’s obsession with providing merchants and customers the best possible payment experiences. For merchants, this initiative greatly increases access to new customers, bigger basket values and increased sales volumes. For customers, it means they can use Zip Pay to shop everywhere and pay later, always interest-free. Customers can also continue to check-out using Zip’s existing instore solutions, if that is what they prefer.
Tap & Zip follows a strategic product review of Zip’s instore payments experience, which to date has been based on barcode and QR technology, which requires complex point-of-sale integrations. Ever since contactless payments were introduced in Australia in 2006 Australians have universally accepted tapping as the preferred experience. With 24% of Zip transactions occurring in physical stores compared with the broader Australian retail data, which sees approximately 87% of payments instore –the opportunity to grow the BNPL share is significant.
11am Webcast
Zip Announces Partnership with Ebay, Launches Zip Business
https://www.asx.com.au/asxpdf/20200826/pdf/44lxm2c5ycy4yf.pdf
The announcement of a partnership with eBay Australia and the launch of Zip Business saw a massive jump in the SP today, up 27.48%. I don't hold Z1P, but I did a bit of quick maths out of general interest.
With the SP rising by $2.08 and 390,403,189 shares on issue, Z1P's market cap increased by $812,038,633.12. The announcement mentions "40,000 Australian small and medium-sized businesses the opportunity to access working capital", which equates to an increase in market cap of $20,300.97 per business.
The announcement makes no mention of how Zip Business intends to profit from the partnership; perhaps this will be mentioned tomorrow if Zip provides guidance in its FY20 Full Year Results.
Respiri Signs Agreement with BNPL Provider ZIP
Respiri Limited (ASX:RSH)(“Respiri” or the “Company”), an eHealth SaaS Company supporting respiratory health management, is pleased to announce that it has executed a merchant services agreement with a leading Buy Now Pay Later (BNPL) provider Zip Money Payments Pty Ltd, a wholly owned subsidiary of Zip Co Limited (ASX:Z1P). BNPL services are growing rapidly within the Australian pharmacy segment, with approximately one in ten of the general population now utilising such payment options.
Mr Marjan Mikel, CEO of Respiri Limited said “The recently announced Pharmacy Sales/Marketing, Distribution and Logistics Agreement with Cipla Australia is expected to significantly increase both pharmacy awareness and patient access to our proprietary wheezo® device alongside our training and education initiatives with the Pharmacy Guild of Australia. Our Agreement with ZIP provides asthmatic patients seeking access to our platform additional financial flexibility when making these important healthcare decisions relating to improvements in the management of their disease.”
ZIP DELIVERS DURING COVID AND ACCELERATES GLOBAL GROWTH STRATEGY
* Achieved full year FY20 revenue of $161.2m (up 91% on FY19), with record quarterly revenue of $46.4m (up 72% YoY).
* Achieved $2.3bn in annualised transaction volume1 (vs target $2.2bn) in FY20, with quarterly volume of $570.7m (up 62% YoY). Transaction numbers were up 120% YoY.
* Receivables increased to $1.2bn, up 73% YoY.
* Customers increased to 2.1 million, up 63% YoY (197k added in quarter).
* Merchants on the platform increased to 24.5k, up 51% YoY.
* Strong credit performance notwithstanding COVID-19 with net bad debts of 2.24% at the end of Q4, in line with expectations and significantly outperforming the market.
* Monthly arrears, a forward indicator of future losses, reduced from 1.55% in March to 1.33% in June – an outstanding result in the current climate.
* Announced the acquisition of US-based BNPL company QuadPay together with an investment of up to $200m from Susquehanna Investment Group (SIG) to accelerate Zip’s global expansion strategy and drive growth. The transaction is subject to a number of closing conditions, including shareholder approval at the EGM expected to be next month.
* QuadPay delivered a very strong Q4 across its core metrics, benefiting from the surge to online – $233m2 in TTV (annualising at $0.9bn), $16.4m2 in revenue (annualising at $66m) and 1.8m customers.
* Post completion, Zip will emerge as a global BNPL leader across 5 markets (AU, NZ, US, UK and SA) with pro-forma annualised TTV of $3.2bn3, annualised revenue of $252m and 3.9m customers4.
08-May-2020: April Trading Update - Z1P Continues to Perform Strongly
Zip Co Limited (ASX: Z1P) (Zip) is pleased to provide a trading update for the month ending 30 April 2020.
GROUP HIGHLIGHTS:
Managing Director and CEO Larry Diamond said: “April was another very strong month for Zip, and in particular when considering the shutdown of a large portion of the economy. Our product differentiation and penetration into purchases for online, the home, and everyday spend categories, delivered robust transaction volume. Our revenue model has continued to deliver a strong result in the face of a challenging economic environment for retail more generally. The start of May looks to be considerably stronger again relative to April, and we look forward to supporting our retail partners as social restrictions gradually ease and brick and mortar stores begin to re-open.”
Executive Director and COO Peter Gray said: “The investments we have made in our credit and decision technology platform over the last 7 years, our flexible wallet product, and the unique levels of engagement we have with our customers are paying off. We have seen Zip continue to deliver market leading receivables performance. The increased repayment metrics were extremely pleasing, and we are well placed to continue to successfully manage our portfolio in this challenging time.”
--- click on link above for more ---
Also, one month ago: 08-Apr-2020: March 2020 Quarterly Update
I can't help but feel that Z1P is like the old Betamax video cassette system, which was superior in every way to the VHS system yet got killed by VHS anyway - because VHS was more popular and it had a positive feedback loop. The more stuff that was available on VHS, the more people used VHS, the more stuff became available for VHS, and so it went - until Betamax just died. Of course so did VHS eventually, but not before becoming the dominant format globally. VHS was itself eventually replaced by DVDs and Blu Ray. Afterpay is the VHS of Australia and zipPay seems to be the Betamax of Australia. IMHO. Z1P appears to have better client/customer screening processes, so will have less bad and doubtful debts, and there are other advantage to their business model as well, but APT has the first mover advantage, and the momentum, and they're going to be the winners, with the vast majority of market share - particularly here in Australia (they've already achieved that, but I think their market share will just increase further from here) unless they implode under a mountain of debt. I don't have good visibility of the competitive landscape for them in other countries. I know that if people view their business model as innovative and advantageous, others will try to copy them, with a few tweaks, to get in on that market and grab a slice of that pie. I don't invest in either company. I'm very wary of 2nd tier and lower tier lenders. As many have said, APT and Z1P have NOT had their business models properly stress-tested through the full economic cycle. That is probably starting to occur now, and it might expose some cracks. Lower tier lenders are fraught with risks in my opinion and there are also some questionable practises employed by some of them. I have avoided TGA (Thorn Group) and CCV (Cash Converters) over the years for similar reasons, and look what has happened to them! While I see the stake that Tencent has just bought in APT as a big plus, I'm still not tempted to jump onboard that runaway train.
ZIP UNLOCKS EVERYDAY PAYMENTS WITH TAP & ZIP
Zip Co Limited (ASX: Z1P) (“Zip” or “the Company”) today announces the official launch of Tap & Zip, a new product feature that reimagines buy now, pay later (BNPL) instore by enabling Zip Pay users to shop effortlessly anywhere that accepts Visa.
Tap & Zip builds on Zip’s mission to be the first payment choice everywhere and every day. It will see Zip expand into more everyday spend categories and capitalise on the significant instore payments opportunity. Currently, just 13% of stores in Australia are able to accept buy now, pay later options.
Tap & Zip addresses this significant and untapped customer need. Today’s announcement underscores Zip’s obsession with providing merchants and customers the best possible payment experiences. For merchants, this initiative greatly increases access to new customers, bigger basket values and increased sales volumes. For customers, it means they can use Zip Pay to shop everywhere and pay later, always interest-free. Customers can also continue to check-out using Zip’s existing instore solutions, if that is what they prefer.
Tap & Zip follows a strategic product review of Zip’s instore payments experience, which to date has been based on barcode and QR technology, which requires complex point-of-sale integrations. Ever since contactless payments were introduced in Australia in 20063 Australians have universally
accepted tapping as the preferred experience. With 24% of Zip transactions occurring in physical stores compared with the broader Australian retail data, which sees approximately 87% of payments instore – the opportunity to grow the BNPL share is significant.
Financial Review Article June 8,2020
"Q1 FY21 TRADING UPDATE ZIP.
BECOMES GLOBAL BNPL PLAYER, DELIVERS RECORD RESULTS
Zip Co Limited (ASX: Z1P) (Zip or the Company) is pleased to provide a trading update for the quarter ended 30 September 2020 (Q1 FY21)."
Refer attached
ZIP Quarterly Report