Zip up 31pc on eBay partnership, SME platform

Shares in buy now, pay later provider Zip defied the broader market on Wednesday and soared by 31 per cent.

Peter Gray from Zip Co. Picture: David Geraghty, The Australian.

Shares in buy now, pay later provider Zip defied the broader market on Wednesday and soared by 31 per cent as investors lapped up the prospect of a new vertical — Zip Business — as well as a new partnership with e-commerce powerhouse eBay.

Zip told investors on Wednesday that 40,000 small and medium enterprises would be able to access its platform through eBay, which would include risk decision and real-time onboarding features. The company joins Afterpay in announcing tie-ups with eBay, after the rival announced a similar partnership in April.

“Zip is extremely excited to formally launch its Zip Business platform to create a suite of products for the small business community, a segment that has been underserved by the traditional lenders in recent years,” co-founder and chief operating officer Peter Gray said.

“This comes at a time when Australia’s small businesses are confronting the extreme challenge of COVID-19, which has created enormous pressure on cashflow and ongoing business investment. A thriving small business community is critical to the health of the Australian economy and we are deeply committed to supporting the growth of these important businesses.”

Zip shares closed up $2.08, or 27.5 per cent, at $9.65.

EBay Australia has experienced a surge in COVID-driven demand in recent months, across categories such as technology and home office supply, as well as entertainment and fitness equipment. Computer monitor sales have been up by more than 150 per cent, while dumbbell sales are up by more than 800 per cent.

Zip on Wednesday also announced a $100m debt funding facility with US outfit Victory Park Capital Advisors. “Once established, the facility will give Zip the flexibility and capacity required to support the launch of Zip Business,” the company said.

It comes two days after New York-based Zip acquisition target QuadPay recorded a record monthly transaction volume of more than $US70m ($97m) — for July, up 30 per cent month on month and up 600 per cent on July last year.

Zip and Afterpay will report their financial results on Thursday, in what will be another closely watched day for the sector.

On Wednesday fellow Australian fintech MoneyMe’s shares were up by more than 10 per cent after the company beat expectations, posting annual net profits of $1.3m, up 300 per cent year on year. MoneyMe’s market value is up nearly 40 per cent in the past month.

“The MoneyMe brand has gone from strength to strength,” chief executive Clayton Howes said. “I am truly excited about the future for this business that is well positioned to build upon its record achievements from the 2020 financial year throughout and beyond the … COVID-19 environ­ment, and be the favourite credit partner for Generation Now.”