it’s a two-exchange Tuesday, everyone. First, we’re talking fintech valuation. Next, we’re digging in Atlanta.
Last week’s news that PayPal intends to buy Japanese startup Pedi, Buy Now, Pay Later (BNPL) is the company’s second major acquisition this year. The PayPal news followed an even bigger deal by Square for Australian BNPL company Afterpay.
The multibillion-dollar exit provided hard market proof that the value of what BNPL startups are building goes beyond simple operating results; Major fintech platforms are willing to spend huge sums of money for their revenue and potential strategic value.
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Because both deals took place in 2021, they provide two data points for the value of BNPL companies operating at large scale. And because Square and PayPal both provide their investors with some information regarding their transactions, we have a little bit of comparison work to do.
Let’s do a little math and find out how much PayPal and Square investors are paying for transaction volume on both platforms. Then, we’ll see what Affirm is worth along similar lines. We’ll be taking a look at Klarna’s numbers to see if there’s anything we can dig into there.
Our goal is to find out what price level or ceiling paid and afterpay deals have, if other players in their space are matching that figure, and why. this will be fun!
What would you pay for $1 of BNPL GMV?
Square’s Afterpay deal is worth about $29 billion, which is a huge amount. It’s not hard to see why American consumer- and business-focused fintechs are willing to write such a big check – afterpay does. volume.