Is there any space left for other BNPL companies other than Afterpay and Zip?

In recent months the BNPL space appears to be the rapid success of Afterpay (ASX:APT) and Zip (ASX:Z1P) and the stagnation of everyone else.

But is there a mismatch between share price movements and reality? The executives of other BNPL aspirants think so, arguing they are carving out their own unique niches that investors haven’t yet realised are advantageous yet.

One of these execs is Payright (ASX:PYR) co-CEO Myles Redward.

His company listed on the ASX and has more than halved since – remaining so despite a trading update in which it reported a 55 per cent rise in customers and a Gross Merchandise Value (GMV) increase to $16.9 million in April and May. That’s 135 per cent higher than the prior year.

Speaking with Stockhead yesterday, Redward said there is space left in the BNPL sector for other companies to take, particularly outside of retail and in higher end purchases (over $1000).

“We feel – and we’re certainly seeing it in demand, customer and merchant alike – is there’s a growing acceptance and demand for high price point BNPL offering,” Redward said.

“BNPL is a category and concept that’s been quite retail focused, but being high price point (focused, we’re) seeing increased demand and proactive approaches being made by merchants outside that profile, home improvement, health and beauty, education and automotive.

“That’s the beauty of our product – rather than competing with micro-ticket end of the market our product sits well alongside where sub-$1000 BNPL providers might be embedded, so rather than competing, our product complements a merchant’s offering.”

Laybuy ‘disappointed and frustrated’

Another BNPL company that has not seen the share price success of Afterpay and Zip is New Zealand-based Laybuy (ASX:LBY).

In a statement at last week’s shareholders meeting and since shared on the ASX, CEO Gary Rohloff acknowledged the share price hadn’t performed as well investors had hoped for.

“The board and I are as disappointed and frustrated about this as many of you will be,” he said.

But Rohloff said the key difference was his firm was targeting the UK rather than the US and the meeting was to raise $40 million to fund expansion.

“While it is true the US market might be a larger market, the UK is underestimated,” he said.

“It is more than twice the size of the Australian market and it is a market where a higher proportion of spending is done online. We know that the pandemic has only accelerated the shift to online shopping so online retail spending will not be much higher.

“And with the launch of new innovations such as our Tap to Pay technology in the UK, we expect to grow market share further by enabling consumers to more easily use Laybuy in-store and well as online.”

Rohoff also claimed to have had early success in the UK market, growing its Gross Merchandise Value up 504 per cent in the UK alone and 159 per cent across all its markets.

But he claimed more growth was to come.

“Our focus has been and will remain on accelerating growth in this market and we will use the funds raised in this capital raise to do just that by investing in technology, marketing and people,” he said.

“We will also continue to target large, influential merchants in order to drive scale, deliver network effects and lift brand recognition, while also targeting SMEs to diversify our retailer base and increase our average commissions.”