Afterpay takes a hit as it chases US and UK growth

Buy now, pay later specialist Afterpay has announced its results for the six-month period ended 31st December 2019.

The Australian company posted a $35 million loss, a 66% wider loss than the same period a year ago, as it pursued growth in the US and UK markets.

It now has more than seven million consumers using its service at 43,000+ retailers globally, which helped the PayTech firm deliver underlying sales growth of 109% YoY. The plan is to reach 9.5 million active customers by the end of FY20.

“I’m particularly thrilled by the progress we’ve made in each of our markets. Specifically, in Australia/New Zealand, we have an amazing customer frequency rate of 23x per year for those customers who joined between 2015 and 2017. And our in-store business now represents 24% of our underlying sales in these markets,” Nick Molnar, Co-founder and US CEO, Afterpay, said in a LinkedIn post.

“In the US, after launching less than two years ago, we now have more US consumers than in Australia - almost four million, a result of adding one million during November and December. Our newest market, the UK, is also showing great momentum, with more than 600,000 active customers and is already offered by three of the UK’s largest e-commerce retailers - Boohoo, JD Sports and Asos.”

Klarna

Rival venture Klarna, whose boss recently slammed Afterpay for its ‘unsustainable’ business model, has also just reported a loss. In this case, $113 million on revenues of $740 million in 2019. This is its first loss since the company was founded 15 years ago. Further details here.