Australian B2B BNPL provider BizPay collapses into administration

BizPay, the Australian fintech offering buy now, pay later (BNPL) services for business-to-business invoices, has fallen into voluntary administration.

BizPay Group Limited appointed Jonathon Keenan and Peter Krejci of BRI Ferrier as joint administrators on Thursday, according to the Australian Securities and Investments Commission (ASIC).

“While a restructure of the business is explored, no new loans are being issued to clients,” the company website states.

A cashflow shortfall and trouble securing fresh investment drove BizPay’s decision to enter administration, said Jonathon Keenan, joint administrator and partner at BRI Ferrier.

Speaking to SmartCompany, Keenan said the administrators are now exploring opportunities to sell or restructure the venture.

“The infrastructure is there, and we are looking for a new partner,” he said.

While acknowledging a “squeeze” caused by the increased cost of capital, Keenan said the demand for invoice financing and BNPL services remains strong.

“The BizPay model, which has a functioning platform, provides a fairly seamless offering to customers, providing that finance outcome,” Keenan added.

Approximately 15 staff have been affected by the administration process.

On the merchant side, the administrators believe payments to the businesses honouring invoices are up to date.

The first meeting of creditors will take place on December 5 at the offices of BRI Ferrier in Sydney.

Administration after BNPL boom

Founded in 2019 by David Price and Sylvia Huang, BizPay (formerly HirePay) promises small businesses a tailored version of the buy now, pay later functions popularised by consumer-facing startups like Afterpay and Zip.

Like other BNPL services, BizPay pays the upfront cost of an invoice and asks the small business buyer to repay the cost of the invoice, plus transaction fees, over a series of monthly or fortnightly instalments.

The company says it can help small businesses smooth out their cash flow, echoing other fintechs that say BNPL can help households manage their budgets.

On the merchant side, BizPay pledges to pay suppliers within 24 hours of the customer making an order.

The company also assumes credit risk on bad debts, shielding merchants from small businesses that cannot pay their invoices in full.

BizPay made headlines in early 2021 over its reported plans to raise $100 million ahead of an ASX listing and a projected $400 million valuation.

The market for BNPL services appeared buoyant further into 2021, as Square inked its $39 billion acquisition of Afterpay, and rock-bottom interest rates ensured low borrowing costs for BNPL providers themselves.

The company reported 1,000 customers in early 2022 and projected further growth through the year.

Yet the company faced fresh hardship in May 2022, when it laid off approximately 30% of its staff.

At the time, Price told News.com.au it was a “strategic decision” to cut costs through a worsening economic environment.

Hardship continued for BizPay further through 2022, with the Australian Financial Review reporting a fresh fundraising efforts valued the company at around $3.4 million.

The publication said Price stepped down as CEO in July 2022.

Since then, trading conditions have worsened in the small business sector that BizPay serves.

This month, credit monitoring service CreditorWatch reported the average B2B invoice value has fallen to its lowest point since January 2015, when CreditorWatch first started tracking average invoice values.

SmartCompany has contacted BizPay for comment.