Afterpay: A record-breaking deal for Australia based on the simplest of ideas
Afterpay’s out-of-nowhere success has captivated Australia for some time, dividing the nation into fans and critics of the pay-later fintech. Now it is part of Australia’s biggest-ever M&A deal.
When journalists James Eyers and Jonathan Shapiro set about writing a book on Australian payments phenomenon Afterpay, they recognized there was a danger of being overtaken by events.
“We knew writing a book about such a rapidly evolving subject was always going to leave us exposed to the risk that we’d be caught out by a dramatic plot twist,” they wrote on Saturday to mark the launch of their book this week.
They got that right.
On Monday morning, Afterpay announced it was being acquired by Square, the US payments business founded by Twitter’s Jack Dorsey, in a A$39 billion ($29 billion) deal, the largest transaction in Australian M&A history. Forty-eight hours is a long time in the world of fintech biographies, it seems.
Afterpay was launched by Anthony Eisen and Nick Molnar in 2015, backed by some – now very wealthy – early investors, many of them non-professional friends and associates, who were really just supporting a broad idea around try-before-you-buy customer empowerment.
Over time, that evolved into a simple business structure: buying things in four instalments, interest-free, with Afterpay making its money from merchants who use the company’s e-commerce platform.