Fintech Zip, headquartered in Sydney, has acquired the Spotii platform for purchase in the Middle East for an enterprise value of $ 20 million. The money will be paid out in Zip common stock, cash, or a combination of both. As part of the deal, Spotii shareholders (apparently founders) will receive an additional $ 15 million if performance milestones in terms of total transaction value, active customers and gross profit margin are met over the next three years.
Zip already held a 20 percent stake in the Dubai-based startup and is now acquiring the remaining 80 percent from founders and other shareholders. Australian company Buy Now Pay Later had previously invested an undisclosed amount of money in Spotii in December 2020. In addition to its co-founders and Zip, Spotii had Daman Investments based in Dubai on its cap table.
Spotii was founded in 2019 by a former Abraaj executive and Anuscha Iqbal and her brother Ziyaad Ahmed. In May 2020, Spotii launched its platform for the purchase of Pay-Now-Pay-Later in the United Arab Emirates and expanded it to Saudi Arabia six months later. The startup enables merchants in both countries to offer their customers interest-free purchase options during online checkout (and for in-store purchases) and to pay for payment options later.
It is very rare for a startup to look for a major sales opportunity within a year of its creation. We reached out to the Spotii founders to see why they decided to sell so early and will update the story when we hear from them. One possible explanation could be that the purchase price has become very competitive later in the Middle East within the past six months and it has become difficult to raise external capital with players like Tabby (which has raised over $ 30 million) and Checkout – supported Tamara around.
According to a statement from Zip, Spotii currently has 650 merchants integrated into its platform in the United Arab Emirates and Saudi Arabia, with total transaction volume on the platform increasing an average of 90 percent since its launch compared to the previous month.
“Spotii’s proprietary risk algorithm has enabled the company to grow rapidly while maintaining low loss rates. It has also been able to integrate into a wide range of industries in a market with limited access to centralized third-party data sources,” the statement added.
Commenting on the acquisition, Anuscha Ahmed, Co-Founder and CEO of Spotii: “Since Spotii was founded in early 2020, dealers and customers have made significant use of the platform, underscoring the appetite and need for BNPL solutions in the MENA region. By working with Zip – a global leader in BNPL – we can drive further growth by leveraging the company’s advanced technology and expertise. “
“For dealers, this means better access to customers outside the MENA region, while BNPL customers in the regional markets will have better access to international dealers. Ultimately, the Middle East is highlighted as a growing region for e-commerce and BNPL offerings, ”she added.
Larry Diamond, Zip Co-Founder and CEO, said, “The Spotii acquisition is an important step in Zip’s global expansion and international strategy. Ecommerce in the Middle East is on a significant upward trend. We have been working with Spotii since our first investment in December 2020 to expand our understanding of the BNPL opportunities in the region and to have a number of exciting global distributors that we look forward to activating in the months ahead. We also believe there is a big untapped opportunity to bring BNPL to emerging markets, where cash on delivery remains a significant challenge for retailers and retail digitization is accelerating. “
Zip also today announced the acquisition of a European buy-now-pay-later platform Twisto for just over $ 120 million. The Australian company, which currently has a market capitalization of over $ 3 billion, also previously acquired US buy-now pay-later player QuadPay for around $ 300 million.