Square's plan to acquire Afterpay, an Australian "buy-now-pay-later" company, for approximately US$29 billion in stock is both large and symbolic. It is the most vivid signal yet that greater M&A and activity is coming for the consumer lending space, one of the hottest fintech verticals.
As discussed in our report, published just last week, we see increased M&A and consolidation activity in the remainder of 2021 and 2022. The COVID-19 pandemic has accelerated the demand for digital products and services in profound ways, putting in sharp relief the extent to which many younger consumers are eschewing traditional credit products and providers.
Fintechs will be both acquirers and targets in the years ahead. Our report highlights the top 10 issues that should be considered before signing up a deal.
Two financial technology giants that are taking on the traditional banking industry are joining forces to build their alternative to credit cards. Square said on Sunday that it planned to acquire the Australian “buy now, pay later” company Afterpay in an all-stock deal that values Afterpay at about $29 billion. The deal introduces Afterpay’s service, which allows users to stagger the cost of their purchases over interest-free installments, to U.S. consumers and the millions of small businesses that process their credit card transactions on the Square app. It will also help the San Francisco-based Square further expand in Australia, its second-biggest market after the United States.