Jack Dorsey’s financial services and digital payments company Square Inc is acquiring Australia’s buy now, pay later giant Afterpay for US$29 billion (A$39 billion) in an all stock deal.
The price of the deal is based on Square’s closing price on last Monday (July 30, 2021) and is expected to be paid in all stock, the companies announced in a joint statement. The transaction is expected to close in the first quarter of 2022.
“Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles,” said Jack Dorsey, Co-Founder and CEO of Square and Twitter.
“Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands,” he said.
Founded in 2015 by Nick Molnar, Anthony Eisen and Nicholas Molnar, Melbourne-headquartered Afterpay allows customers to buy products now and pay for them later with interest free re-payments.
As of July 30, it has over 16 million customers and nearly 100,000 merchants globally. Following the news, the company’s shares rose as much as 19% on Monday.
The acquisition of Afterpay will enable Square to accelerate its ‘’strategic priorities for its Seller and Cash App ecosystems,’’ the company said in the press release.
Jack Dorsey’s company plans to integrate Afterpay into its Seller and Cash app units so that it can allow ‘’even the smallest of merchants’’ to offer the buy now, pay later solution, Afterpay customers to manage their installment payments directly in the Cash App and Cash App customers to step into the world of BNPL directly in the same app.
“By combining with Square, we will further accelerate our growth in the U.S. and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers.’’ Anthony Eisen and Nick Molnar, Co-Founders and Co-CEOs of Afterpay.
‘’We are fully aligned with Square’s purpose and, together, we hope to continue redefining financial wellness and responsible spending for our customers,” they added.
In another press release shared yesterday, Square announced that its total net revenue increased by 143% year-over-year to $4.68 billion in the second quarter of 2021.
In addition, excluding the company’s Bitcoin revenue, the total net revenue was $1.96 billion which grew 87% Y/Y.
In February, Square purchased nearly 3,318 bitcoins for $170 million. Last month, CEO Dorsey said that Bitcoin will be a big part of Twitter’s future too.