Buy Now, Pay Later (BNPL) company Laybuy has initiated a process to seek potential buyers in the context of turbulent market conditions. The firm is aiming to transition from public to private ownership by delisting from New Zealand's junior stock exchange, Catalist.

This move comes after a challenging period for Laybuy, which saw a decline in its share price and the decision to switch from the Sydney stock market to Catalist in January last year. Despite raising USD 80 million on the Australian stock market in 2020 at a valuation of approximately USD 358 million, Laybuy's current market value on Catalist stands at around USD 5.3 million. The company, which once boasted 766,000 customers across the UK, Australia, and New Zealand, has experienced a decrease in active UK customers from around 610,000 in March 2022 to approximately 484,000 by the end of the same year according to Yahoo Finance.

A closer look at the BNPL sector The BNPL sector as a whole has faced challenges amid economic uncertainties, including the impact of the cost-of-living crisis, leading to a slowdown in consumer spending. Laybuy recently removed major retailers such as Amazon, Ebay, and Marks & Spencer from its platform. Competition in the BNPL space has intensified, with Swedish fintech Klarna emerging as the UK's largest BNPL provider, boasting around 18 million customers according to Yahoo.

Other significant players include Clearpay and Zilch, while traditional financial institutions such as HSBC, Natwest, and Virgin Money have also entered the market to capitalise on the growing demand for interest-free instalment loans. Moody's analysts have warned of consolidation in the BNPL industry, predicting that only a few companies will remain independent as they face regulatory pressures and increased competition. Profitability remains a key challenge for Laybuy, as it continues to operate at a loss.

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