Sydney buy now pay later provider BizPay cuts 30 per cent of workforce

The buy now, pay later provider is saying goodbye to a large part of their workforce but continues to seek out $25 million in funding.

A buy now, pay later provider with offices in Sydney has made 30 per cent of its workforce redundant blaming market conditions for the huge cut to staffing.

Yet, the company called BizPay is currently in the process of trying to raise $25 million in funding and has partially completed it.

It has already attracted $45 million in funding since its launch in late 2019, according to reports.

Impacted staff are required to finish up at the company by Friday, although the company did not reveal how many people were laid off.

BizPay is a form of BNPL used by other businesses to pay invoices for providers such as lawyers, accountants or advisers over four monthly instalments and it charges companies a fee.

BizPay co-founder David Price. Picture: Twitter

Its co-founder and chief executive David Price said the job cuts were a “strategic decision”.

“Due to the uncertainty in the global markets, particularly the tech sector, and current market conditions, we’ve made the strategic decision to streamline operations and our workforce to support BizPay’s next growth phase,” he told news.com.au.

He added that new automated processes had improved efficiency requiring a “leaner and more agile workforce” to improve its competitiveness in the space.

“Unfortunately, as part of this process, we’ve had to make some reductions to our staff level to adapt to these changes,” he said.

Earlier this year, experts predicted potential “carnage” for the buy now, pay later sector as providers burn through cash, bad debts balloon and customers retreat from using the service – a model which they say isn’t sustainable.

In April, Australian buy now pay later tech giant Afterpay posted a staggering mid-year loss haemorrhaging $345.5 million over the six months to December 31, 2021.

Afterpay reported a $345.5 million loss for the last six months of the year. Picture: John Gass/NCA NewsWire

It was a considerable decline from its previous half-yearly results, where it shed $79.2 million in the first half of 2021, meaning the company’s losses ballooned by 336 per cent.

Meanwhile, shares in Zip Co have dropped by a whopping 72 per cent this year.

BizPay had previously raised the possibility of floating on the Australian stock market in an initial public offering (IPO) and in April last year it was estimated to achieve a market capitalisation of $400 million, the Australian Financial Review reported.

Mr Price said the it was working on the timing and size of its current raise.

“In terms of our capital raise, we are working closely with our investment bankers on the timings and size of the raise,” he said.

“We’ve successfully raised a portion of funds; however, it is a challenging market, especially for fintechs. We believe the measures that we have put in place and the automation capabilities will be well received by the market and support us in scaling the business.”

Zip’s shares are down 72 per cent this year. Picture: John Gass/NCA NewsWire

Back in March, BizPay said it had achieved significant growth with more than 10 times increase in revenue over the last year, reported Retail Biz.

“The payments ecosystem is accelerating at lightning speed, and we’re excited to tap into this growth in 2022 …”, Mr Price told the publication.

“By offering a unique and disruptive product to an untapped market, we’ve set up the business for success both locally and globally. With an innovative AI-led approach, supported by a talented team we’re keen to keep delivering outstanding results on our way to IPO.”