Zip founder Larry Diamond is heading home as new US CEO steps in

Zip cofounder Larry Diamond will return to Australia with his family in the second half of 2024 after nearly two years based in the US as CEO of the buy-now-pay-later (BNPL) fintech there.

ASX-listed Zip Co (ASX: ZIP) has named Joseph (Joe) Heck has been appointed as Zip’s new US CEO, stepping into the role in July, from his current position as CEO of US fintech Happy Money.

Diamond will assume the role of US Chairman and remain an executive director of the Zip Board.

The company has also added Wells Fargo veteran Kevin Moss to the board as an independent non-executive director from this week. He will also be on the audit and risk committee and remuneration, people and culture committee.

Cofounder Peter Gray continues as the Australian CEO.

Zip, founded in 2013, has seen its share price doubled in value over the past 12 months to $1.29, rebounding following a concerted cost-cutting campaign in early 2023 that saw the fintech sell off Twisto, the European BNPL it acquired in 2021, as well as its South African business, Payflex, alongside a wind down of its Middle Eastern operations. The shrinkage saw it pull out of 11 markets and cut staffing, as well as restructuring debt to reduce it by $192 million in a push to stop cash burn and reach profitability.

The company raised $24.7 million at $0.47 per share in June last year as part of the restructure.

Zip landed on the ASX in 2015 after raising $5 million in a reverse takeover of mineral exploration company Rubianna Resources.

Diamond headed to the US in October 2022 to drive the US arm of the business at a point where the BNPL sector more broadly was struggling after a purple patch where it seemed like your Uber driver was launching a BNPL. It was best embodied by CBA, which invested US$300m (A$470m) in Swedish BNPL Klarna, writing down the value of that investment in its 2022 annual report by $2.3 billion to just A$408 million on June 30 that year.

Klarna was the world’s second most valuable fintech before its valuation falling 85% in just 12 months from US$45.6 billion in June 2021 to US$6.7 billion following a US$800 million raise in July. The business has been on a similar path to Zip towards profitability and is now eyeing off a potential IPO.

Zip Group CEO Cynthia Scott welcomed the Heck as the incoming US CEO.

“Our US business has demonstrated consistently strong performance and is very well-positioned to deliver on its growth opportunity,” she said.

“I would like to acknowledge and thank Larry for his significant contribution as US CEO and continued role in ensuring Zip delivers on its strategic priorities.”

Releasing its half-year results for FY24 in February, Zip saw 28.9% increase in group revenue on 12 months ago to A$430 million with a cash gross profit of $176.2m (up 45.9% vs 1H23)

Zip Americas saw total transaction volume grow up 33.3% with revenue rising by 40.3% to $214.7m and surpassing ANZ revenue for the first time.

Group cash EBTDA was $30.8m.