If you were going to make a big purchase a few years ago, you’d probably whip out your credit card. 💳
Over the last few years though, a number of startups have attempted to disrupt credit cards. You’ve probably seen them while checking out online. And now, investors are checking out the buy-now-pay-later (BNPL) industry.
Back in January, BNPL company Affirm went public. Their IPO was highly successful, gaining 90% in its debut. 🎆 Nowadays $AFRM is far off its highs, down more than 50% in the last six months. Ouch. 😬
Don’t be deceived, though. There’s a lot of evidence that BNPL services are growing spectacularly. According to research conducted by The Motley Fool, 56% of Americans have used a BNPL service. BNPL adoption among young and elderly people during the pandemic has been particularly impressive.
That growth might just be getting started. Research from Morning Consult says that only 17% of polled adults used a BNPL service in June, but 69% of polled households have a credit card. It also supports The Motley Fool’s earlier findings that BNPL has become a staple for Gen Zers, but it also goes further to show that BNPL users are traditionally lower-income and more diverse than credit card users.
That offers a lot of room for growth in BNPL firms (and a good reason to be bullish.) Maybe the results aren’t showing in the few publicly-listed companies in this space just yet, but it’s showing for companies building towards their IPOs. Klarna raised over $600M last month at a $45B valuation thanks to the newfound momentum.