Afterpay deal with Square ‘a proud moment for Australian technology’

Nick Molnar says all Australians should welcome his company’s multibillion-dollar deal with US payments giant Square.

Afterpay CEO Nick Molnar at Bondi Beach. Picture: John Feder

Afterpay’s multibillion-dollar exit to US tech giant Square has the potential to supercharge the trajectory of the Australian technology ecosystem, according to local industry insiders and analysts, who are confident the deal will be a boon for local start-ups and their employees across the country.

Tech executives across the country have heralded the proposed $39bn acquisition, announced on Monday, as one of the most significant for Australia’s tech industry in its history.

The S&P/ASX 200 Information Technology Index shot up 6.5 per cent as valuations for companies across the sector were boosted by Afterpay’s success.

Luke Fossett, an executive for Melbourne payments start-up GoCardless, said the result was an “unbelievable” one for many entrepreneurs who would take inspiration from the move.

“Thanks to Nick (Molner), Ant (Anthony Eisen) and their team, they now have the ultimate gold standard to benchmark themselves against,” he said.

“Whether you’re a high school student, an early stage start-up founder, or a scale-up CEO, the acquisition is living proof that if you’re passionate, driven and build a business that puts customers of all shapes and sizes at the centre of everything, there is a pot of gold at the end of the rainbow.”

Afterpay’s 31-year-old co-founder Mr Molnar, who started the company after running Australia’s top jewellery store on eBay, said all Australians should take pride from the proposed deal.

“I’m really proud of what this moment represents for Australian technology,” he said in an interview on Monday from Los Angeles. “To have the ability for talent locally to continue to make the impact it deserves to … If we have contributed a small amount to that outcome, it’s a really exciting future.”

Catch of the Day co-founder Gabby Leibovich, who sold his tech business to Wesfarmers in 2019 for $230m, said the “gold medal for best ever Australian entrepreneurial pair” should go to Afterpay’s co-founders for building the buy now, pay later provider from a small company of just a handful of people to a market titan worth billions of dollars.

“What a story that makes all of us so proud, with Afterpay coming from nowhere and within six years building one of the strongest brands around,” he said.

“Nick and Anthony are the biggest mensches going around and deserve every bit of this. Looking forward to seeing the story unfold with the help of (Square CEO Jack) Dorsey and Square.”

Square Peg Capital co-founder Paul Bassat, who started online job website Seek with brother Andrew in 1997, a business that is now worth about $10bn, described the deal as proof of a dramatic transformation under way in Australia’s economy.

Some of Australia’s biggest employers now are tech companies, including Seek, TechnologyOne and Atlassian, which between them employ thousands of people across the nation.

“Afterpay is our biggest ever takeover, Atlassian’s market capitalisation exceeds $US80bn ($109bn) and Canva is reportedly (worth) $US30bn,” Mr Bassat said.

“Throw in the emerging group of Airwallex, Deputy, Rokt, Culture Amp plus thousands more start-ups with big dreams … (it’s) so exciting. It is worth reflecting on the fact that the biggest takeover in Australian history is of a seven-year old company with a co-founder who was 23 at the time … Ant and Nick have achieved something quite extraordinary.”

Square chief executive Mr Dorsey previously has spoken of his high regard for Australia’s tech innovators, telling The Australian in an interview that some of his company’s best engineers were in Melbourne. Australia is Square’s largest international market and is where it built its first engineering hub outside of North America.

“We continue to see a lot of talent come through,” Mr Dorsey said. “We’ve found resonance within the market and within the community here, and there’s a level of entrepreneurship you can see here.”

FinTech Australia chief executive Rebecca Schot-Guppy described the global deal as fantastic news for Afterpay and for the local fintech industry more broadly.

“It’s a testament to the strength of the Australian ecosystem and the progress to the digital lead economy we are striving for,” she said.

“We expect to see activity and interest in our industry continue to skyrocket on the back of this transaction. It’s a global story that once again puts us on the map and will see renewed global interest from both overseas investors and other global fintechs in our ecosystem.”

Originally published as Afterpay deal with Square ‘a proud moment for Australian technology’