• Zip is spending $160 million to acquire two overseas buy now, pay later partners, Twisto and Spotii, outright.
• Twisto, making up the lion’s share of the investment, operates in the more mature European market while Spotii, based out of the United Arab Emirates (UAE) is being pitched as a growth opportunity in a market yet to experience the overcrowding of BNPL players.
• It comes as both Zip and its main rival Afterpay try to maintain significant growth rates amid declining share prices.
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Australia’s second-largest buy now, pay later platform is upping the ante in its bid for international expansion, as it moves into the Europe and Middle East markets.

Zip announced on Monday it would acquire two overseas partners outright, buying Twisto in Europe and Spotii in the United Arab Emirates, in two separate sales worth a total of $160 million.

Twisto’s purchase makes up the lion’s share of that investment, with it giving Zip a potential foothold in the European Union’s 27 member states, representing the bulk of a $1.1 trillion annual ecommerce market.

“We are very much looking forward to adding this strategic geography to our growing footprint and fulfilling global merchant demand,” CEO Larry Diamond said.

Spotii in comparison marks a growth market, with Afterpay and other major competitors yet to partner up with a Middle Eastern platform. Ironically, Spotii was actually co-founded by an Afterpay analyst, Ziyaad  Ahmed, after leaving the company.

“Since founding Spotii in early 2020, we’ve seen significant uptake of the platform by merchants and customers, highlighting the appetite and need for BNPL solutions in the MENA region,” Ahmed’s co-founder Anuscha Ahmed said. “Ultimately, it highlights the Middle East as a growing region for eCommerce and BNPL offerings.”

With Zip valued at $4 billion, both platforms are relatively small in comparison to their new owner. Yet it marks another aggressive play into growth markets, as Diamond looks to acquire new platforms to maintain a rapid rate of expansion.

Accordingly, it has hinted at vague plans to move into cryptocurrency and stock trading.

Monday’s news meanwhile further cements a clear model being pursued by Zip, acquiring a stake before staging a takeover.

It has worked in the US for Zip, where it converted local-player QuadPay into the effective American arm of its operation.

In a nod to this strategy on Monday, Zip outlined why, claiming that “by initially making low-risk minority investments, Zip is well placed to validate cultural fit and management alignment, stress test the business plan and identify synergies, and plan for integration.”

The success of the strategy so far is self-evident. North American has become both the fastest-growing and largest region for Zip.

Afterpay meanwhile has made acquisitions of its own, buying Spain’s Pagantis for $82 million in August, and Clearpay in the UK back in 2018.

It has meanwhile increased its stake in its US operation as the market begins to dwarf the rest of its global footprint.

Given both Afterpay and Zip’s share prices are down 40% in recent months, both need to continue growing in order to satisfy the market’s once great expectations.

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