BNPL stocks Zip and Openpay target growth, investors unimpressed

A couple of separate announcements today have moved ASX-listed BNPL stocks, Zip (ASX:Z1P) and OpenPay (ASX:OPY).

Zip’s share price briefly rose by over 1 per cent after announcing a tie-up with JB Hi-Fi (ASX:JBH) before falling, while OpenPay skidded 5 per cent after announcing a round of capital raising.

BNPL stocks on the ASX have come under pressure since the beginning of the year, as investors rotated to cyclical and away from growth stocks.

Market darling Afterpay (ASX:APT) has lost its shine this year, losing 15 per cent. Humm (ASX:HUM), which targets the health and wellbeing sector, has also dropped by the same amount.

But there have been some good performers in this segment, with Zip being the clear winner, surging by 30 per cent year-to-date. Sezzle (ASX:SZL) and Openpay have also notched gains this year, rising by 13 per cent and 3 per cent respectively.

Zip Co

Zip has today announced a partnership with ASX-listed JB Hi-Fi, which will allow customers of JB Hi-Fi and The Good Guys stores to pay with Zip’s BNPL payment solutions.

In Australia, Zip boasts nearly 2 million Australian users, which is approximately 30 per cent of the total market. It has also made inroads in the US with the Quadpay platform, boasting around 5.7 million customers.

Unlike its competitors, Zip Co doesn’t break purchases into four or six instalments, instead consolidating account balances into a single ‘wallet’ and charging a minimum monthly repayment on the total.

It has secured major partnerships, with the likes of Visa, eBay, and Facebook.

Latest results for the half show that the company delivered an EBITDA loss of $14.8 million, on the back of a $160 million revenue, which had grown by 131 per cent over the pcp.

OpenPay

Openpay today announced a $67.5 million funding package to support its growth strategies overseas.

The funding includes a $37.5 million institutional placement, $25 million debt facility, and $5 million share purchase plan to accelerate international expansion.

The package follows a major strategic partnership it signed earlier this week with global payments provider, Worldpay – a part of the NYSE-listed Fidelity Group – which will open the path to US main street markets. Under that deal, OpenPay will integrate its BNPL products with the payment gateway operated by Worldpay.

Openpay, operating under the “Buy Now, Pay Smarter” slogan, focuses on segments with higher transaction values, such as home improvement, automotive and healthcare, providing longer term plans of up to 36 months.

In the latest financial reports, the company posted a half-year net loss of $25 million, which follows a $15 million loss in the pcp.