Just like initial Quadpay strategic investment, Zip made...

Just like initial Quadpay strategic investment, Zip made relatively small amount of investments then sat back and monitor how these start ups growing at its own pace. If they are showing exponentially growth, then acquisition is the card to play.

Just like to scout the next soccer star, when Dortmund bought Erling Haaland back to 2019 cost the club 20M Euro, and a year later as at today, other club has to put at least 100M for a transfer request. All these global investment candidate no different as youth soccer player, if your DD tells you they have huge potential, then get in earlier so potentially maximise the ROI.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source from AFR

‘Doubling down’ on the US

Zip chief executive Larry Diamond is alive to the challenge. “It’s a very good question and we obviously debate it extensively at board level.“

He says what gives him and the board comfort is what he calls the “coalition of founders” – these are the founders of the businesses that Zip has bought, QuadPay being a prime example – who have joined the group and bolstered its capacity to handle growth.

Diamond and his Australian-based executives are keenly aware they can’t run the empire from Australia so have taken the approach that where they can “make the boat go faster” by becoming involved in the management of an overseas business they will. But where the team on the ground is doing a good job, Diamond and his Australian executives step back and let them go.

He argues that the investment in the US, which will mainly go towards customer and merchant acquisition and technology, is all about capturing the clear momentum that QuadPay has built up in recent months, which he says is built around strong efficiency and unit economics. “We just need to double down on the US.”

Diamond also says the new growth business unit isn’t perhaps as grand as it might sound. The idea here is not that Zip itself will try to expand into a range of geographies, but that this division will act as an “investment committee that’s made a few minority investments that could pay over 24 to 48 months”.

Zip will have no day-to-day involvement in the Middle East or European minnows it’s bought into, and for now won’t even provide them with any technology, as they have their own platforms. For now, these equity investments are about assessing the opportunities in these markets, building up global retail relationships and sharing knowledge.