Australia's Afterpay mulls U.S. listing as 'buy now, pay later' takes off

Australian buy-now-pay-later company Afterpay said on Tuesday it is exploring a U.S. listing after more than doubling its third-quarter sales, offering U.S. investors an easier path to owning a stock that has boomed through the pandemic.

Afterpay has tapped Goldman Sachs to advise on the listing, two sources with direct knowledge of the matter told Reuters. Goldman declined to comment.

The Melbourne-based firm was last valued at nearly A$37 billion ($28.7 billion) despite never having posted a profit, thanks to the pandemic-driven surge in online shopping and rapid expansion in overseas markets including the United States.

Afterpay said its North America business saw triple-digit growth in the third quarter, helping underlying sales, or the value of transactions Afterpay processed, rise 104% to A$5.2 billion in period, or more than half of what it reported over the first six months of the fiscal year.

A U.S. listing would likely further open up the fintech firm to an investor base that lends greater weight toward growth, and also potentially provide easier access to capital to fund expansion plans.

"There is no timeline set for a Board decision on a U.S. listing and any listing would be subject to market conditions, approval by a U.S. exchange and satisfying a number of other customary listing prerequisites," the company said as it released its quarterly results.

Afterpay said it intended to remain headquartered in Australia, but did not specify if a potential U.S. market debut would be based on a dual-listing structure or result in it giving up its Australian berth.

North America is the company's biggest growth market where it is pitted against Affirm, Zip Co's Quadpay, new entrant PayPal and arch rival Klarna, which is valued at $31 billion and looking at direct listing in the United States.

Shares of Afterpay wavered through the first hour of trade, and were last up 0.3% compared with a broader market that was 0.3% lower. The stock is up more than 200% since its pre-pandemic high of around A$41 in Feb 2020.

Afterpay's growth has slowed in Australia and later this year it is likely to face pressure on margins as the country's biggest bank and PayPal launch BNPL offerings with a promise of lower fees. 

Founded in 2015, the company last month launched in parts of mainland Europe and has plans to move into Asia. Its self-branded savings accounts linked to Westpac Banking Corp are expected to go live later this year.

Active customers climbed more than 11% from the end of December to 14.6 million, led by the U.S. additions.