Zopa buys BNPL platform DivideBuy

Digital bank Zopa has acquired buy now, pay later (BNPL) platform DivideBuy, having raised £75 million earlier in the month to pursue its M&A strategy.

The deal to buy DivideBuy’s point-of-sale (POS) finance technology and lending platform is expected to complete in the next few months.

It is Zopa’s first acquisition and will increase the digital bank’s revenue by at least 20% in the coming years.

Jaidev Janardana, chief executive officer of Zopa, said: “This acquisition helps us bring to life BNPL 2.0, an evolution of BNPL which we believe delivers the easy, integrated product which customers love, whilst also addressing some of the issues around affordability and responsible lending which have plagued the sector.”

Zopa’s BNPL 2.0 lending aims to offer only affordable credit by running credit checks and affordability assessments for all customers, and to share data with credit rating agencies to help other lenders build up a more accurate picture of customers’ financial profiles.

“We are proud to be entering the POS space with DivideBuy, a market-leader with a standout product and technology stack, and a culture that is closely aligned to our values of fairness and customer centricity,” added Janardana.

“Combining DivideBuy’s POS financing solution with Zopa’s best-in-class underwriting capabilities, regulatory permissions, and access to funding will enable digital-first journeys that bring new value to merchants and consistently delight customers.”

Through DivideBuy, merchants can offer interest-free payment options at checkout, allowing shoppers to spread the cost of their purchases over a two to 12-month period.

DivideBuy’s CEO Robert Flowers

Robert Flowers, chief executive officer of DivideBuy, said: “We were delighted to be approached by Zopa in its search for a POS finance provider to support its vision of building Britain’s best bank. DivideBuy’s product, technology and culture align perfectly with Zopa’s values and brand strength, making this an ideal fit for the future of lending.

“Our LendTech solution will enable Zopa to leverage its core lending capabilities and build a market-leading POS finance solution.”

Flowers added that Zopa and DivideBuy are “committed to empowering our collective teams with new upskilling and career opportunities”.

This week, the UK government launched an eight-week consultation on proposed draft legislation that will see BNPL regulated by the Financial Conduct Authority.

Main image: Zopa’s leadership team, including Jaidev Janardana, Zopa’s chief executive officer seated front and middle.