FinTech: Afterpay Buys European BNPL Provider Pagantis for €50M+

August 25, 2020 | FinTech, News
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Afterpay will use the acquisition to expand into four European countries and thereafter all of the EU.

ASX-listed Afterpay Limited (ASX: APT) is making moves to expand into the Continent. According to a Monday announcement, its subsidiary Clearpay (Europe) Limited has acquired the entire shareholding in Pagantis SAU and PMT Technology SLU from NBQ Corporate SLU.

The companies (collectively referred as Pagantis) provide a range of buy now, pay later (BNPL) services, as well as traditional credit services, in the EU countries of Spain, France, and Italy. Pagantis also has regulatory approval to operate in Portugal. (CISION PRNewswire)

Afterpay eyes European expansion

Afterpay estimates the size of the ecommerce market in the above four countries to be over $247 billion.

Meanwhile, the addressable EU market is about $494 billion. This market is very attractive to Afterpay due to its millennial demographics, usage of debit cards, and a vibrant fashion and beauty retail market.

The acquisition will smoothen the EU launch of Afterpay’s Clearpay branded platform, scheduled for Q3 FY 21.

Pagantis has about 1,400 active merchants and approximately 150,000 active customers.

The cost of the acquisition is €50 million. However, some excess is payable after three years if the equity value of Pagantis exceeds €45 million at that time.

Pagantis post-acquisition

The acquirer will rebrand the existing Pagantis business as Clearpay, and modify its technology to provide the core Afterpay product.

However, the current instalment and credit card products being operated by Pagantis will be discontinued. The existing loan book will be retained by the seller, NBQ Corporate SLU.

Clearpay is already an operative brand for Afterpay in the markets of New Zealand, Australia, the U.S. and the U.K.

“Our momentum to date has given us the confidence to expedite our expansion into new global regions,” said Anthony Eisen, Co-founder and CEO of Afterpay. “Entering into such internationally relevant markets like the U.S. and the UK and seeing our growth outpace what we experienced in our more mature Australian market, validates the appeal of our product on a global scale.”

“Acquiring Pagantis provides us with the necessary regulatory licensing, resourcing and infrastructure to expedite the launch of Afterpay into key countries in Southern Europe and beyond,” he added.

Related Story:  Chinese Social Media Giant Tencent Builds 5% Stake in Afterpay

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