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The heat is on in the battle between the Australian buy-now pay-later (BNPL) darlings of the ASX, Zip Co (ASX: Z1P) and Afterpay.
Zip Co seems to be making some ground on Afterpay with its 1H19 results (the latter has been ahead of Zip Co from day dot).
The company reported record revenue during the first half, up 114 per cent to $34.2 million, and record transaction volume, up 110 per cent to $495.2 million.
It also reduced its losses by over half, reporting a loss of $6.8 million in 1H19 an improvement from 1H18's loss of $14.6 million.
Zip Co now has more than 1 million customers using its two platforms Zip Money (a regulated product) and Zip Pay (Zip's BNPL play). It still has a while to go to catch up to Afterpay's mammoth 3.1 million active customers.
Major Australian retailers joined the platform in 1H19 with Bunnings Warehouse, Target, Officeworks and Super Retail Group joining the 12,500+ merchants offering the payment service to customers.
Zip Co Managing director and co-founder Larry Diamond says the record results are testament to the hard work of the entire team.
"We saw record results across all key drivers: customer engagement, transactions, in-store volumes, revenue and bad debts," says Diamond.
"We are pleased to report that we are ahead of our expectations for FY19 and see significant growth ahead as our market penetration increases across the target verticals."
"Our investment in our credit technology, big data and strategic choices around upfront customer due diligence, has ensured we continue to build a robust and sustainable platform in the BNPL sector."
Diamond founded Zip Co with Peter Gray, and was named the number five Young Entrepreneur in Business News Australia's Top 100 list last year.
The company says it is on track to beat FY19 expectations set at the beginning of the financial year thanks to its healthy pipeline at the end of the half and "major" partnerships it is set to announce in the second half.
Shares in Zip Co are up 3.5 per cent to $1.33 per share at 11.23am AEDT.
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