Buy-now-pay-later provider Laybuy has announced the appointment of receivers, marking the end of its long battle to achieve profitability.
Founder Gary Rohloff told state media he was devastated by the decision, saying he had exhausted all efforts to make the business viable.
Laybuy, part of a sector that allows consumers to spread the cost of purchases interest-free, saw significant growth and high valuations during the pandemic. However, despite initial investor optimism, Laybuy has never reported a profit. The current economic downturn, prolonged beyond expectations, has severely impacted the company’s performance, with reduced consumer spending, increased defaults, higher fraud incidents, and rising finance costs.
The broader buy-now-pay-later sector has faced similar challenges, with high-profile players like Afterpay being acquired by Block and others such as Oxipay (now Humm) and OpenPay shutting down. Increased regulation and heightened online competition from platforms like Temu have further pressured the industry.
Greg Smith, head of retail at Devon Funds Management told state media there had been a drastic shift from the sector’s boom during COVID-19 to its current struggles, citing tougher economic conditions, higher interest rates, and cost-of-living pressures.
Receivers Deloitte stated that Laybuy is not accepting new transactions but advised customers to continue making repayments. The receivers are exploring potential business sales to possibly resume operations.
