Corporate Connect analyst Joh Snyman has released an updated research report on NZ-based BNPL company Laybuy (ASX: LBY).
Given its strong market positions (particularly in the UK), ongoing high growth and the extreme valuation deficit to the peer group, LBY may quickly become an attractive target for a larger and opportunistic BNPL player, or a well-capitalised new entrant (e.g. a bank). We note, for instance, that leading US BNPL player Affirm is well-capitalised, and also has no presence in the United Kingdom, Australia or in New Zealand.
We note UK start-up Zilch has recently raised US$110m venture capital in its latest round of funding, which values the company at US$2.0b. Zilch has ~1.2m customers currently, after experiencing very strong sales growth of around 30-35% per month throughout the year. On these metrics, it’s EV / Active Customer is approximately A$2,300.
Unsurprisingly, the companies with businesses that are relatively more progressed tend to trade at significantly higher multiples, reflecting greater scale, potential higher profitability, reduced risks and greater investor certainty. However, it is evident that LBY is trading at EV multiples that are by far at the lower end of the peer group, even its more direct peers in terms of scale.
To download a copy of this report, please visit the LBY company page HERE.
