The Australian and New Zealand arms of buy now, pay later provider Laybuy have fallen into receivership, in what its co-founder described as a “devastating time” for a fintech once valued at $358 million.
Laybuy, which paused new customer purchases and suspended its platform last week, on Monday appointed Glen Kanevsky and Jason Tracy of Deloitte Australia as receivers for Laybuy Australia Pty Limited.
Its operations in New Zealand, where the fintech was founded, are also under receivership.
Laybuy’s UK business, and other select elements of the broader Laybuy group, are not under receivership.
In a statement shared through Catalist, the New Zealand exchange where Laybuy is listed, “heartbroken” co-founder Gary Rohloff said the business struggled to reach profitability through a tough economic climate.
“We had been working incredibly hard to execute a plan to achieve profitability after years of rapid growth,” he said.
“While we have been making good progress over the last two years, the economic downturn has been longer than we expected, and this has had a significant impact on the retail sector in both New Zealand and the United Kingdom.
“As a result, we have seen reduced consumer spending, higher credit losses, and increased fraudulent activity.
“This, alongside increased financing costs, created a perfect storm that was difficult to recover from.”
Efforts to sell the Laybuy business “fell over at the last hurdle”, Rohloff continued, saying the board had no option but to place much of the business in receivership.
Laybuy’s platform remains offline, with customers unable to sign up or make new purchases through the service.
Customers are still able to make repayments on outstanding purchases.
While buy now, pay later services themselves provide upfront payment to merchants when a customer makes a purchase, questions remain over how customers can access refunds through the platform.
“We are currently assessing the situation with respect to refunds,” the Laybuy website states.
SmartCompany has contacted Kanevsky and Tracy for comment.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
