PayPal has agreed to acquire Japanese buy now, pay later (BNPL) firm Paidy in a deal worth $2.7 billion.
Paid mostly in cash, the deal drives PayPal deeper into the BNPL sector.
Founded in 2014, Paidy is one of Japan’s few fintech unicorns. It launched a zero-interest payment service in 2020.
Like its contemporaries, the Tokyo-based firm allows users to spread the cost of their purchases into equal instalments. Payments can be made in cash at convenience stores or sent by bank transfer.
The firm says it uses proprietary models and machine learning to underwrite transactions “in seconds” and guarantee payments to merchants.
Paidy raised $120 million in March, which valued it at $1.3 billion. The firm has racked up more than six million registered users.
PayPal Ventures has been an ongoing investor in Paidy, and led the company’s Series C extension round in late 2019.
Peter Kenevan, vice president and head of Japan at PayPal, says the deal creates “a strong foundation” for the firm to “accelerate its momentum” in the region.
He adds: “Paidy pioneered [BNPL] solutions tailored to the Japanese market and quickly grew to become the leading service.”
Russel Cummer, founder and executive chairman at Paidy, says there is “no better home” for his company than PayPal.
“Japan has been a vibrant environment for our growth to date and we’re honored to have our team’s hard work and potential recognised by a global leader.”
The acquisition is expected to close before the end of the year, subject to regulatory checks. Paidy will continue to work under its own brand name.
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