Twitter Cofounder Jack Dorsey’s Square To Buy Australia’s Afterpay In $29 Billion All-Stock Deal

Jack Dorsey

Square, controlled by Twitter co-founder Jack Dorsey, said Monday that it has agreed to buy Australian fintech company Afterpay for $29 billion in an all-stock deal that promises to create a global payments giant.

Under the terms of the deal, Afterpay said its shareholders would receive 0.375 shares of Square’s Class A common stock for each share of Afterpay, valuing each share of Afterpay at A$126.21 ($92.78), up 30.6 percent from last Friday’s closing price. Square can choose to pay 1% of the total transaction amount in cash.

We’ve built our business to make the financial system fairer, more accessible and more inclusive, and Afterpay has built a trusted brand consistent with those principles,” Dorsey said in a statement. “Together, we can better connect our Cash App and Seller ecosystems to provide even more compelling products and services for merchants and consumers.”

Since its founding in 2015, Afterpay has revolutionized consumer lending by allowing people to pay for small items, such as clothing, in four interest-free payments. Most of Afterpay’s revenue comes from the 4-6% fee it charges retailers for each transaction.

The “buy now, pay later” scheme gained popularity in the midst of the Covid-19 pandemic last year, when consumers stuck at home because governments imposed sales bans to curb the spread of the coronavirus turned to online shopping.

Afterpay co-founder and CEO Nick Molnar says millennials have a “complete aversion” to credit cards because they can lead to the accumulation of debt. In 2014, he joined forces with his then-neighbor Anthony Eisen, the former chief investment officer of Australian holding company Guinness Peat Group, to create his fintech startup.

They took the company public in April 2016, listing it on the Australian Stock Exchange. Afterpay claims to have more than 16 million customers and nearly 100,000 merchants worldwide using its services as of June of this year. Its platform is available in Australia, Canada, France, Italy, New Zealand, the United Kingdom, the United States and Spain.

The deal will further increase the fortunes of Afterpay’s two co-founders. With a net worth of $1.8 billion each, Eisen and Molnar ranked 28th and 29th, respectively, among Australia’s richest people when the world’s billionaires list was released in April.

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