Square-Afterpay Can Create Key Global Payments Network, Early Investor Says
By Stuart Condie
SYDNEY--Square Inc.'s US$29 billion acquisition of Afterpay Ltd.
could create one of the world's most important payments network, an
early investor in the Australian buy-now-pay-later provider
The addition of installment payment functionality to Square's
Cash App should help integrate the U.S. company's merchant payment
network and its consumer service, said Dana Stalder, general
partner at U.S.-based venture-capital firm Matrix Partners.
"I've never seen a combination that has such potential to
deliver extraordinary value to both consumers and merchants. Even
more so than eBay + PayPal," Mr. Stalder said in a post on Matrix's
website following the deal's announcement.
Mr. Stalder, a PayPal Holdings Inc. senior vice president from
2004 to 2008, has been an Afterpay board member since 2018, when
Matrix invested US$15.0 million in what was then known as Afterpay
Touch. The cash helped fund the Australian company's expansion into
the burgeoning U.S. payments market, which now accounts for 65% of
Afterpay's users and 46% of its underlying sales volumes.
Matrix this year waived 35% of the underlying interest it held
in Afterpay's U.S. unit for about 373 million Australian dollars
(US$273.9 million) in cash, while the 0.9% stake it holds in the
overall company is valued at A$343.0 million by Square's offer of
A$126.21 a share.
Mr. Stalder said Matrix had been thrilled but unsurprised by
Afterpay's meteoric rise, which has made it Australia's largest
locally listed technology company by market capitalization. He said
Afterpay had executed on younger consumers' desire to avoid
interest-accruing debt, such as through traditional credit
"Afterpay and Cash App each have double-digit millions of
consumers, and Square's seller ecosystem and Afterpay's merchant
network both do double-digit billions of payment volume per year,"
Mr. Stalder wrote.
"From the offline register to the online checkout flow to
sending money to a friend in just a few taps, Square and Afterpay
will tell a complete story of next-generation economic
Write to Stuart Condie at email@example.com
(END) Dow Jones Newswires
August 02, 2021 01:19 ET (05:19 GMT)
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