BNPL: Fintech IPO Opportunity Before $99 Billion
Visa. American Express. Discover … beware!
Fintech is coming for you!
There’s a rising new market in the fintech IPO world called BNPL — buy now, pay later.
In a way, BNPL is a modern take on the credit card.
It’s one of the fastest-growing fintech trends among millennials and gen z, creating true staying power.
And the market has explosive growth. I mean $99 billion by 2024.
Your way in: IPOs. These new America 2.0 fintech companies are coming to the market, and it’s a great way to invest for big GROWTH gains.
Check out the full story, get a leading fintech ticker to buy and see how to jump on the IPO train today:
Amber Lancaster: American Express, Capital One, Discover, beware. Fintech’s growing and popular buy now, pay later — BNPL — financing option is coming for your business. The market size is projected to catapult 350% by 2024. Investing in this fintech opportunity is one to watch.
Hello. Welcome to Market Talk Monday on the Paul Mampilly YouTube channel, home of Bold Profits Strong Hands Nation. I am Amber Lancaster. Thank you for tuning in.
Today, Patrick Goodrich — Investment Analyst and initial public offering (IPO) expert — is joining us to discuss the growing opportunity in the BNPL fintech market and IPOs aiming to cash in on this trend.
Plus, I will reveal the top ETF to play this market and share details on how Paul recommended his top pick for this trend in his IPO Speculator service, which gained up to 96% pre-IPO, and the steps you can take to be prepared for this in the future. Hello, Patrick. Good to see you.
Patrick Goodrich: Hey Amber. Thank you for having me on.
Amber: It’s always good to see you, Patrick. Before we begin. Of course you can visit us at BoldProfitsDaily.com to sign up for our free investment e-letter. Let’s get started.
Buy Now, Pay Later
Before we hear from Patrick, let me give you a brief primer on the buy now, pay later market. BNPL is an acronym we should all get used to hearing. For those who may not know, BNPL is a financing arrangement that allows consumers to make purchases without paying for them all at once, especially when shopping online.
“Consumers can make a purchase at a participating retailer and opt for BNPL at checkout. If approved, it takes seconds and consumers make a small down payment such as 25% of the overall purchase amount.
They pay off the remaining amount due in a series of interest-free installments. Consumers can pay via a check or bank transfer. Payments can also be deducted from debit cards or bank accounts automatically.”
Bloomberg Intelligence forecasts BNPL’s market growth may accelerate upwards of 46% annually, growing from a $22 billion market today to $99 billion by 2024. That’s a 350% rise.
Per their research, drivers of the BNPL remain strong, including easier budgeting and lower or no interest for consumers.
Plus, there’s 30% better cart conversion. Millennial and Gen Z app adoption brings loyalty to both. The BNPL market is one of the fastest-growing online payment methods in the U.S. and other countries. BNPL products are beginning to replace traditional credit cards among millennials and Gen Z.
As this chart shows, the penetration of BNPL is extremely high among younger consumers.
50% of Gen Z and 40% of millennials embrace BNPL. It means this concept has staying power. Retailers of all sizes, including Amazon and Walmart are casting their net into the BNPL market.
Leading BNPL fintechs are now starting to take market share from traditional credit card issuers. Of course traditional credit card issuers are not going to take this lying down. They are beginning to come up with their own BNPL plans. The floodgates are opening on this market.
I can tell you that having Patrick on today to talk about it from an IPO perspective is great for all of us. Hello again, Patrick. Thanks for bearing with me through that intro. I just wanted to lay the groundwork for this concept. I think it’s fascinating. I have three questions for you today.
Why Is The BNPL Market Popular?
My first question is, from your perspective, why is the BNPL market becoming so popular right now?
Patrick: Great question and great introduction. I think it shows your viewers that it’s an explosive megatrend. This facet of the fintech megatrend is incredible. 46% compounding annual growth rate for the foreseeable future is explosive growth. The thing about it is, it’s very keen on younger demographics.
They love this stuff. They are hip on shopping for things on e-commerce, however a lot of them are not flush with cash. Sometimes breaking up those installment payments is great. I personally haven’t used it, but it’s something I would be keen on doing for large purchases.
To your point about the IPO market, this is great. The reason it’s heating up when it comes to new companies that do BNPL coming to the market is because they want to raise capital. With a hot market and a growing trend, they want to raise the capital right now with new investors who see this trend is going to explode and take market share.
Right now they think this is a good time to raise capital by selling a portion of their company on the stock market. They’ll use that for further expansion and growth in this megatrend. That’s why it’s hot right now in the IPO market.
How Many IPOs are aiming to crash in on BNPL Market?
Amber: I like how you concur with these explosive statistics. So my second question is, how many U.S. IPOs have come aiming to cash in on this BNPL market?
Patrick: What I have seen over the past year or so is there have been four IPOs. I say that with an asterisk because these companies are mostly listed on the over-the-counter market (OTC). They start their debuts there because this is such a new industry and there haven’t been a lot of firm players yet in the field.
They start on these lower-tier exchanges, but the silver lining is they can uplist and do a more traditional IPO on the Nasdaq or NYSE. Four for now, but three of those are on the OTC. The silver lining to that is readers and viewers can wait until they get that uplisting, which I am confident they will.
Then they can play the pop between the uplsting. There’s a lot of explosive growth from that.
Amber: I like how you mentioned silver linings. There’s always silver linings, especially in the IPO market. There are always opportunities for gains.
How Have The BNPL IPOs Performed?
My third question to you is, on average, how they have BNPL IPOs performed? I’d like to get some hard stats on performance numbers.
And, are there more BNPL IPOs forthcoming that we can look forward to?
Patrick: The four companies I mentioned, two of them have gone up 150% from their debut. Then one of them, Afterpay, which is being acquired by Square, went up 370%. It was an incredible opportunity there in those stocks.
Companies that are looking to go IPO that aren’t trading, one particular one is Klarna. It’s a Swedish BNPL company. Great statistics there. They said in Sweden they take up about 40% of the market share of all e-commerce. It’s incredible that they are doing so well.
It’s a great feature for consumers. I do expect we will see more IPOs, particularly in the BNPL space in the next several months to a year.
Amber: Patrick, that was chock full of information. Thank you so much for stopping by this morning and sharing your insights on BNPL.
Patrick: Thank you. Look forward to being on again.
Amber: Look forward to seeing you soon. Thank you again to Patrick for joining us today. Always good to hear from him. Here are two ways to take part in the BNPL trend. First, consider buying shares in the ARK Fintech Innovation ETF (NYSEArca: ARKF). ARKF holdings include key players is in the BNPL market and give you a broad way in.
Second, check out Paul’s IPO Speculator service. Paul recognized a growing promise of the BNPL market earlier this year. He recommended his BNPL pre-IPO to IPO Speculator members. They were able to capture a 96% gain by being in this IPO.
Just know that Paul can and will probably recommend companies like this in the future.
You can follow Paul, Patrick and me on Twitter: @MampillyGuru, @PGoodrich6 and @ALancasterGuru. Throughout the trading week I aim to post results of these releases that are #BOP in nature. Remember, keep that acronym in your mind — BNPL — it’s something to watch going forward.
Until next time, have a great week ahead. Take care.
Editor, Profits Unlimited