Zip Co Limited. providing choice and flexibilityTeam Veye | 27 Oct 2020 ASX - Z1P
Zip Co Limited (ASX: Z1P)
Acquisition of the Urge
Zip Co Limited (ASX: Z1P) (“Zip” or “the Company”) on 26 October 2020 announced that it had acquired all of the shares in Sydney-based technology company, Urge Holdings Pty Ltd (“Urge”) (the “Urge Acquisition”). Since inception in 2018, the Urge had been helping shoppers find and buy the items they’re looking for, driving increased sales, reach and exposure for its retail partners. The Urge’s team and its capabilities include expertise in search functionality, optimisation and indexation, all of which will be integrated into Zip’s platform globally, beginning with the QuadPay app in the US.
The Urge Acquisition involves total upfront consideration of approximately $3 million, to be settled through the issue of 432,516 fully paid ordinary shares in Zip to the shareholders of Urge. A further $5.5 million of deferred consideration may be received by Urge’s shareholders subject to certain prescribed performance milestones being achieved within the next 3.5 years (the “Milestone Consideration”).
(Chart source: TradingView)
Zip unlocks everyday payments with Tap & Zip
Zip Co Limited (ASX: Z1P) (“Zip” or “the Company”) on 20 October 2020 announced the official launch of Tap & Zip, a new product feature that reimagines buy now, pay later (BNPL) instore by enabling Zip Pay users to shop effortlessly anywhere that accepts Visa.
Tap & Zip builds on Zip’s mission to be the first payment choice everywhere and every day. It will see Zip expand into more everyday spend categories and capitalise on the significant instore payments opportunity. Currently, just 13%2 of stores in Australia are able to accept buy now, pay later options. Tap & Zip addresses this significant and untapped customer need.
Tap & Zip follows a strategic product review of Zip’s instore payments experience, which to date has been based on barcode and QR technology, which requires complex point-of-sale integrations. Ever since contactless payments were introduced in Australia in 20063 Australians have universally accepted tapping as the preferred experience. With 24% of Zip transactions occurring in physical stores compared with the broader Australian retail data, which sees approximately 87% of payments instore – the opportunity to grow the BNPL share is significant. (Data Source – Company Reports)
Although BNPL has seen phenomenal growth over the last few years, until now that growth has been restricted by a clunky instore checkout experience and limited acceptance. Tap & Zip, completely change this game, enabling Zip to compete with the credit card at every checkout in Australia. Everywhere Australians can pay with a Visa contactless card, they’ll now also be able to Tap & Zip, interest-free. Tap & Zip is a new way for customers to pay that will dramatically increase instore transactions and conversion rates for thousands of retailers and merchants around the country. The stock had formed head & shoulder pattern indicating some fall in prices. The company partnering with Apple and Google pay changed the sentiment. It can though, face correction up to its strong support at $5.92 but expected to return to the upper end of the channel soon where another buy could be considered. Veye maintains a "Hold" on “Zip Co Limited” at the current price of $6.36
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.