Zip lines up purchase of BNPL rival Sezzle

Zip, an Australian provider of Buy Now Pay Later services, has agreed to buy Minneapolis rival Sezzle.

Zip said in a press release that it will pay $356 million for Sezzle. The deal is expected to close in the third quarter. 

“We are delighted to be bringing Zip and Sezzle together under a transformational transaction that is expected to deliver immediate scale and enhanced growth, which will support our path to profitability,” Larry Diamond, Zip’s CEO, said in a press release. 

Zip said in the release that the U.S. is its fastest-growing market. By acquiring Sezzle, Zip said the United States will account for about 60% of its total transaction volume. 

Sezzle, meanwhile, has agreements with Discover Financial Services, Ally Financial and Alliance Data Systems. Discover has also invested $30 million in the BNPL provider. 

The Zip deal “will be a great cultural fit for both our organizations and we’re excited to be part of Zip’s next chapter,” Charlie Youakim, Sezzle’s CEO, said in the release. 

The deal is coming at a time when BNPL providers are facing scrutiny from the Consumer Financial Protection Bureau.