The Laybuy Holdings Ltd (ASX: LBY) share price is up after giving investors an update in its presentation.
Laybuy is a buy now, pay later business that has partnered with over 9,000 retail merchants. It’s available in New Zealand, Australia, the UK and the USA. Consumers pay for their goods after six weekly payments without paying interest.
The company aims to be the leading weekly BNPL provider, It also offers ‘Laybuy Boost’, which allows customers to increase the value of their purchase by providing a larger first payment in one seamless transaction. This lifts the return on investment (ROI) as it charges commission on the total value of the transaction.
What was the update?
The business reported that it generated annualised gross merchandise value (GMV) of NZ$704 million and the addition of 479 active merchants and 23,000 active customers during the month.
Based on the above performance, FY21 GMV has increased 159% to NZ$589 million, above the forecast given on 8 March 2021 of NZ$581 million to NZ$586 million. This includes “significant” UK GMV growth of 504% year on year to NZ$296 million.
The second half of FY21 represents annualised GMV of NZ$688 million, an increase of 155% on the second half of FY20 and 40% on the first half of FY21.
Laybuy said that it has an attractive merchant position with 9,126 active merchants with 75% growth since FY20. Its customer numbers have grown 87% since FY20 to 756,000.
The buy now, pay later business said that its funding options and capital efficient business model can facilitate future growth up to NZ$4 billion GMV.
Summary thoughts
Laybuy could be one of the BNPL operators to watch. It runs credit checks via third parties including Experian and Centrix and utilises advanced fraud mitigation technologies. It imposes strict credit limits and automatic suspensions on accounts if they miss a payment. Late fees are capped and 97% of customers never pay a late fee. Laybuy is doing things you’d want it to.
It’s growing quickly, but I don’t know if it’s one of the ASX growth shares that I’d buy for my portfolio with so much competition in the industry.
