Block, Inc., formerly known as Square, announced yesterday that it has acquired buy-now-pay-later firm Afterpay Limited by buying all outstanding shares of Afterpay. This acquisition will further expand Block’s portfolio of financial products and services and allow Square sellers in the U.S. and Australia to use Afterpay’s buy-now-pay-later features. Block also owns Cash App, Spiral (formerly Square Crypto), TIDAL and TBD54566975, an open developer platform in progress that will work with cryptocurrency.
As part of the deal, Afterpay co-founders and co-CEOs Nick Molnar and Anthony Eisen have joined Block and will assist in leading their seller and consumer businesses through Square and Cash App, respectively. Sharon Rothstein, Afterpay director and operating partner at Stripes, will serve on Block’s board of directors.
“We’re excited to welcome the Afterpay team to Block and are eager to get to work,” said Jack Dorsey, Block co-founder and CEO, in a January 31, 2022 news release. “Together, we’ll deliver even better products and services for sellers and consumers while staying true to our shared purpose of making the financial system more fair and accessible to everyone.”
“We’re excited to welcome Sharon to our Board. Sharon’s expertise in marketing and global operations make her a great fit for Block as we move into this next growth phase with Afterpay. We’d also like to thank all of the members of the Afterpay Board for their contributions to the business and the transaction,” Dorsey added.
Rothstein, who has deep leadership experience working with Sephora, Starwood Hotels and Resorts, Procter & Gamble, and Starbucks, also commented on the acquisition.
“I’ve long admired Block’s purpose to make the financial system more accessible and inclusive. I’m honored and excited to bring my global experiences to the diverse expertise of this Board,” said Rothstein.
According to Afterpay’s website, the buy-now-pay-later company:
- Is used by 14.6 million around the world
- Has more than 85,000 brands use Afterpay as a payment option
- Has over 47,000 five-star ratings on Trustpilot rate Afterpay as “excellent”
- Boasts an average App Store rating of 4.9 out of 5 with over 927,000 reviews
In our 2022 Subscription Predictions premium article, we predicted that buy-now-pay-later would continue to grow in popularity and the biggest players would get bigger, adding more users and brands to their ranks. That appears to be the case here. The acquisition of Afterpay by Block ensures that Afterpay will reach more users and brands, especially with Block’s ownership of Cash App and Square.
As of June 2021, Klarna was the biggest buy-now-pay-later provider with 90 million active users, followed by Afterpay at 16 million and Affirm at 7 million. Afterpay’s user total seems to have dropped a bit, but we believe that will be temporary. This acquisition changes everything. This acquisition also means that everyone’s suspicions that Jack Dorsey wouldn’t remain idle for long after stepping down from his role as CEO of Twitter at the end of November were spot on. Clearly, Dorsey had other plans in mind, and this was most likely already on the horizon.