My Startup: Laybuy

Charlie Spargo's picture
by Charlie Spargo

Laybuy lets consumers make purchases online or in-store, then make payments over the course of six weeks on an interest-free basis.

Father and son duo Gary and Alex founded Laybuy in New Zealand just a couple of years ago, and officially launched in London earlier in 2019 with an official partnership with Footasylum.

The integrated payment platform spreads the cost of purchases for consumers, and helps sellers get better returns.

Founded: 2017

Founders: Gary Rohloff and Alex Rohloff


Alex and Gary Rohloff
Alex and Gary co-founded Laybuy

We talked to Gary (above, right) about the basis of Laybuy and its future plans.

Why did you start Laybuy? 

Laybuy was created to digitise a traditional model known as “layby”, in which customers reserve a shop item, pay for it in instalments, and collect it once it’s been paid off. This kind of layby is common in Australasia, and sometimes known as “layaway” in the UK.

As good as it was at the time however, the traditional model had its drawbacks. Namely, the consumer had to wait until they’d paid in full to receive their purchase, and retailers were forced to dedicate store space to the reserved items and administer payment schedules for their customers.

We wanted to flip this model on its head and make it even more beneficial for customers and retailers alike. 

Laybuy enables customers to pay one-sixth of the total cost upfront, and settle the rest in interest-free instalments over the next five weeks, both for in-store and online purchases. Consumers can take home their items straight away, while retailers can continue to make sales as normal. 

Tell us more about (the tech behind) the product.

Laybuy's platform infrastructure is built on cloud scalable technologies - the same tools and frameworks used by the world’s best-known technology companies. 

Our platform is hosted in the cloud on Amazon Web Services, and in our short lifespan, we have already iterated our technologies multiple times to evolve with our growing business and scale. 

We’re building our product very quickly with an in-house technical team and will be rolling out our new native mobile app later this year, which will be available on both iOS and Android. 

Where are you at right now?

Two years on from co-founding Laybuy with my son Alex, we have since become the number one buy now, pay later provider in New Zealand. 

Having achieved a great deal of success in our home country in our first 18 months, we felt the time was right to relocate to the UK. Though we’re still very much growing and learning down under, realising our vision for creating a global payments platform naturally meant expanding our operations internationally. 

We have since set up shop in Australia and have our sights on mainland Europe and the US too. 

What are your aims for the next year?

The next 12 months are going to be very exciting for Laybuy. We’ve already launched in the UK and secured key partnerships with Footasylum and ALEXACHUNG, so our primary focus is on continuing to grow our retailer base here.

We will then aim to expand to other European countries and to ultimately become the go-to buy now, pay later option in these territories. We’re also going to invest the same level of energy to continue expanding in Australasia. The next few months will no doubt be incredibly busy and challenging, but I’m excited for what the future holds.

What's been the hardest thing about getting Laybuy off the ground?

When we first launched in New Zealand in 2017, our initial plan was to have signed 200 retailers by June 2019. Within the first three months, we managed to hit this target, which we didn’t anticipate. This blew our forecasts out of the water, which, in many respects, was a great problem to have. We basically just grew so fast that we were running out of runway.

For any early stage, fast-paced business, the ability to access capital when you don’t have a longstanding track record is a perennial issue. We therefore had to ensure we met liquidity requirements to cope with that growth. 

Why should more people be using Laybuy?

For shoppers who opt to pay by Laybuy, they can receive their desired goods or services at the point of sale, pay them off to us directly over a six-week period and are never charged any interest. Ever. 

Our payment model has been designed entirely around consumer budgeting habits. In fact, research we’ve conducted in New Zealand, Australia and in the UK when we first arrived here highlights overwhelmingly that consumers like to budget on a weekly basis, as opposed to on a monthly basis in line with conventional payment cycles. 

Ultimately, Laybuy provides people with a flexible payment option, which means they can accommodate purchases into their discretionary spending, without the interest-bearing element of credit cards. 

How much will it cost users - and why is it worth the investment?

It costs retailers absolutely nothing to integrate Laybuy at checkout. Should they want to remove us as a payment option, they can also do so any time for absolutely no cost. 

We make our money when retailers pay a small commission as a percentage of the cost on each purchase made via Laybuy. We absorb all the consumer credit, default risk, chargeback risk and pay all transaction fees.

Across our customer portfolio, our retail partners have seen a 50% increase in shoppers’ average order values, an increase in online and in-store conversion rates of 50%, and an increase of 30% in new customer acquisitions. For retailers, integrating Laybuy feels like a no brainer.