Laybuy is back, this time backed by Swedish giant Klarna

Wednesday, 2 April 2025

Buy now, pay later lending brand Laybuy has officially “relaunched” as Laybuy by Klarna, nine months after the company that operated it went bust.

Laybuy called in receivers in June last year a week after suspending payments leaving its 500,000 users unable to make new purchases using Laybuy buy now, pay later loans.

Despite a major restructuring in 2022, it struggled to become profitable, exiting the market along with other buy now, pay later operations.

But in August, Laybuy’s New Zealand database and brand was bought by Swedish shop now, pay later shopping app provider Klarna. And it hired Laybuy founder and managing director Gary Rohloff to manage it.

Klarna’s app amounts to an open-all-hours mall and brand marketing service, though Klarna also operates a bank overseas, and provides interest-free instalment lending for shoppers tempted by luxury purchases they haven’t saved for.

Klarna bought Laybuy’s brand and database of 500,000 customers to help it build a shop now, pay later operation using the well-known Laybuy brand.

“It’s really exciting to be able to see the brand live on, so to speak, and to have the backing of a company the size of Klarna is awesome,” Rohloff said.

While Klarna’s focus overseas has been on online shopping, in New Zealand Laybuy by Klarna would be available in many brick and mortar stores from later this year.

Rohloff said Laybuy had good relationships with major retailers, and Laybuy by Klarna would leverage those.

While Laybuy was unable to achieve sustainable profitability, Laybuy by Klarna would benefit from a lower cost of funds and from many other aspects of Klarna’s massive global scale and resources.

Klarna is a global tech “unicorn” worth more than US$1 billion claiming approximately 93 million active consumers and more than 675,000 merchants across 26 countries, and in its 2023 financial year, $172b of goods were sold through its app.

Despite the exit of several buy now, pay later lenders from the market, it remains a popular form of consumer finance, especially for younger people.

About a quarter of adults have a buy now, pay later revolving credit account, and four in 10 of those people have accounts with more than one buy now, pay later lender.

Credit reporting company Centrix said there were currently 940,000 people with buy now, pay later accounts, and at the end of February 8.4% of them were behind in their repayments.

That skewed young compared with other forms of lending like credit cards. The average age of the typical buy now, pay later customer was 36 years old, Centrix said.

It’s a form of lending that has its critics, and when law reforms were proposed to try to regulate buy now, pay later lending in 2023, community organisations told the Government that it was cropping up again and again among the debts of people who had fallen into financial hardship.

In 2023, AUT researchers published research involving young adults aged 18 to 34, who are already at greater risk of problem debt due to low and volatile incomes, which found “strong evidence” that indicators of over-indebtedness were more prevalent among those who used by now, pay later loans.