New Zealand’s BNPL Laybuy Enters Receivership After Failing to Find a Buyer

Laybuy, a Buy Now, Pay Later (BNPL) lender headquartered in New Zealand, has officially entered receivership after failing to find a buyer for the ailing business.

Three Laybuy Entities Enter Receivership Due To Market Challenges

Laybuy initially emerged on the Australian stock exchange four years ago, in 2020. At the time, it was a huge success, with its shares reaching up to A$2.30 apiece. However, by 2023, the company’s share price plummeted to barely A0.6 cents, resulting in the company getting delisted.

The firm struggled even before that, failing to raise fresh capital, which resulted in it having to lay off a third of its workforce. Initially, Laybuy also intended to hive off its UK arm, but those plans also fell through due to its financial struggles.

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Its founder, Gary Rohloff, commented on the situation by saying that Laybuy has made some good progress over the last two years. However, the economic downturn has been longer than initially anticipated. That severely affected the retail sector in both the UK and New Zealand, leading to reduced consumer spending, high credit losses, and increased fraudulent activity.

This, alongside increased financial costs, created a situation from which the company found it difficult to recover from.

With no other choice, the company appointed Deloitte to oversee the process and help it wind down in a controlled fashion. It also issued a warning to its customers that they might experience temporary interruptions to some systems, as the company might need to go offline for short periods of time.

A Devastating Time For Laybuy Teams

It is an unfortunate situation for Laybuy, especially since it started off quite strongly. After being listed on the Australian stock exchange, the company also raised A$35 million in 2021, when it started raising the money for its push into the UK market.

It is also worth noting that only Laybuy Group Holdings Limited, Laybuy Holdings Limited, and Laybuy Australia Pty Ltd were placed into receivership.  UK-based entities in the Laybuy Group continue to trade as normal and were not placed in receivership.

Rohloff added that this is a devastating time for the Laybuy team and that he plans to do everything in his power to support them as the process continues to take its course.

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Laybuy developed a business model that allowed customers to borrow a fixed amount of credit, which they could use to pay for a purchase in six weekly installments. The BNPL model blew up during COVID-19, but as it expanded, rivals such as Temu, coupled with regulation, consolidation, and a slowing economy presented significant challenges that eventually proved to be too much for the company.