Square Is Paying $29 Billion for This?
The fintech platform is spending a lot of capital to acquire a buy-now, pay-later feature that it could develop and market in house at a far lower cost.
Square investors seem to love this $29 billion Afterpay deal. Why?
Photographer: Afterpay
Square Inc. Chief Executive Officer Jack Dorsey is making his biggest bet: an acquisition worth tens of billions of dollars to expand the company’s fintech platform into the buy-now, pay-later market. But given Square’s strong track record of developing its own innovative products, the price tag — for what is essentially a feature — seems exorbitant.
Square agreed to acquire Australia-based Afterpay Ltd. for $29 billion in an all-stock deal it announced on Sunday afternoon. In the news release, the company’s management said it plans to integrate Afterpay’s service, which enables consumers to buy products in four interest-free installments, into its payments app and its checkout solution for physical stores. Investors applauded the combination, sending Square shares up by more than 7% on Monday morning.