Zip has acquired US company QuadPay, as it tries to crack into the American market
Zip shares are soaring after the company announced it has acquired US-based company QuadPay.
Having already increased its stake to 15% of Quad last year, Zip has now bought it outright, as it looks to more aggressively expand into the US.
It will now look to raise $200 million in a new capital round to help fund the expansion.
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Australian buy now pay later (BNPL) companies are mounting an arms race in the United States.
Zip confirmed on Tuesday that it has now acquired American payment instalment company QuadPay, as it seeks to grow its share of the world's largest retail market.
"The US is a critical part of our global strategy and vital as merchaants increasingly look for a gloal payments solution," Zip co-founder Larry Diamond said in a statement to the ASX, noting Zip had been impressed by Quad's innovation.
"They were the first to market with a virtual card solution in the BNPL space and have continued to evolve and innovate their offering."
Subject to shareholder approval, the deal would see Zip acquire QuadPay after it increased its stake in the US company to 15% last year. It would see Zip grow its customer base to more than 3.5 million across the US, Australia, New Zealand, the UK and South Africa with 26,000 merchants onboard.
It will now try to raise $200 million in a new capital raise to fund further expansion. Ending its trading halt after the public announcement, Zip shares jumped more than 33% to fly past $5 on Tuesday.
It comes after Afterpay announced it had hit 5 million US users ahead of schedule, taking off on a tear of its own.
While both are based locally, the two are now looking to take a larger stake in the much larger US market and challenge larger competitors like Sweden's Klarna.
Zip's latest acquisition and capital raise should help it do just that.
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