Laybuy

Laybuy was a New Zealand-founded BNPL company that ASX-listed in September 2020 to fund UK and Australian expansion. After a brutal combination of post-COVID retail decline, rising defaults, cyberattacks, and a failed sale process, it entered receivership in June 2024.

Founded in Auckland in 2017, Laybuy expanded into Australia and the UK, building a base of approximately 766,000 customers and 10,500 merchants globally. It listed on the ASX in 2020 specifically to access capital for this international expansion, raising funds from retail investors who were enthusiastic about the BNPL sector's pandemic-era boom.

• Listed at the peak of BNPL mania — The ASX IPO occurred at the exact top of the BNPL valuation cycle. Rising interest rates in 2022–23 fundamentally broke the model — Laybuy funded interest-free credit via loans, and rising borrowing costs destroyed unit economics.
• Credit losses accelerated — Consumer spending downturn increased defaults and fraud, particularly in UK operations, further draining capital.
• Failed sale process — Between December 2023 and April 2024, directors sought a buyer or new investment. A deal fell through at the last minute.
• Delisted in 2023 — Laybuy was delisted from the ASX in March 2023 — before its collapse — eliminating its ability to raise equity capital.
• Market concentration — Afterpay and Zip dominated Australian BNPL, leaving no space for a smaller, less well-capitalised regional player.

Laybuy Group Holdings, Laybuy Holdings, and Laybuy Australia Pty Ltd were all placed into receivership on 17 June 2024 by Deloitte. Klarna acquired Laybuy's customer base and technology platform from the receivers.

For operators considering Australian entry, Laybuy's experience offers a sharp cautionary template. The lessons below distil what went wrong and what foreign and domestic operators can learn from the failure mode.

• Timing market entry around funding cycles matters — IPOing a capital-hungry fintech at the top of a sector bubble creates fragility when conditions change.
• Interest rate sensitivity must be modelled for BNPL — A model that funds interest-free credit through debt is existentially vulnerable to rate hikes.
• Niche BNPL players need a defensible vertical or geography — Without a protected niche, smaller players are outspent and outcompeted by global and local giants.
• Cross-border operations amplify risk — Simultaneous Australia, NZ, and UK expansion tripled complexity and cost without tripling revenue.
• Have a secondary capital source — Sole reliance on public markets for a loss-making startup is extremely fragile.