BNPL Firm Zip Teams With eBay Australia For SMB Financing

To provide small- to medium-sized businesses (SMBs) with access to working capital, buy now, pay later (BNPL) provider Zip Co. Limited has teamed with eBay Australia as it officially rolls out Zip Business.

The collaboration is meant to let merchants pay for short-term expenditures, buy inventory and control their cash flow through flexible lines of credit, according to a Wednesday (Aug. 26) announcement.

“Zip is extremely excited to formally launch its Zip Business platform to create a suite of products for the small business community, a segment that has been underserved by the traditional lenders in recent years,” Zip Co-Founder and Chief Operating Officer Peter Gray said in the announcement. “This comes at a time when Australia’s small businesses are confronting the extreme challenge of COVID-19, which has created enormous pressure on cash flow and ongoing business investment.”

Zip said it is bringing the Spotcap brand into the Zip Business collection as part of the rollout. The collaboration is the first in a line of offerings that it will gradually launch as it rolls out Zip Business.

Zip Business will harness Spotcap’s in-depth credit experience and bring it together with the complex risk decisioning and onboarding of Zip to quickly grow the SMB BNPL product, according to the company.

In November, news surfaced that Amazon Australia was teaming with Zip. News of the deal brought about a 24.1 percent jump in the share price of Zip. The arrangement also provides Zip with a competitive advantage in the busy but healthy BNLP sector.

An affiliate of Amazon will possess a seven-year option of purchasing as much as 14.6 million shares of Zip at a fixed price with the deal.

Tribeca Investment Partners Portfolio Manager Jun Bei Liu said at the time that BNPL offerings have “very strong purpose, particularly in a slower retail environment.” She called the arrangement a positive development for both firms.