Australia’s Zip looks to drive deeper in Asia, may consider US listing

Australia’s second-biggest buy now, pay later (BNPL) firm Zip Co Ltd is exploring a bigger push into Asia and a potential U.S. listing, the company told Reuters on Tuesday.

After gaining a toehold in Southeast Asia last month through a stake in Philippine firm TendoPay, Zip Chief Executive Larry Diamond said the company is now “actively looking at Singapore, Malaysia, Thailand, Philippines and India”.

Zip’s big focus remains the United States, the biggest market in BNPL space where its unit Quadpay is driving the growth.

As their home turf matures and race heats up in a sector where customers pay in installments without any interest for their online purchases, Zip and its Australia-listed rivals Afterpay and Sezzle are rushing to tap new growth markets and add investors.

“The consideration to list on the Nasdaq or have some form of dual listing makes sense and ticks quite a few boxes,” a Zip spokesperson said. However, the idea is “only at a very early stage” and there are “no hard or firm plans”.

Rivals Afterpay and Sezzle too have been keen on a U.S. debut. Swedish rival and Europe’s most valuable startup Klarna, which has also expanded beyond the continent, is also rumored to be eyeing the US equity market.

The rapid growth of these loss-making companies in a largely unregulated market has also attracted traditional financial firms, with PayPal Holdings launching its BNPL service last year and Australia’s largest bank set to enter this summer.

While the business is an attractive alternative to credit cards, concerns have been raised by consumer protection groups and some investors over the lack of regulation with many BNPLs opting for “soft” credit checks.

BNPLs in Australia, where adoption is high, are not bound by consumer lending laws since they do not charge interest in most cases. Britain is currently forming a framework around BNPL.

Zip’s plan to expand in Asia follows its decision on Monday to take full ownership of a BNPL firm each in Europe and the Middle East.