Zip, a global Buy Now, Pay Later (BNPL) company has a clear mission: to be the number one payment choice, everywhere and every day. Founded in Australia in 2013, they now have more than 86,000 retailers around the world and over 11.4 million growing active customers globally.
With further expansion in the pipeline, ambitious growth goals and demand for BNPL services increasing, Zip was looking to acquire rival US BNPL fintech Sezzle in early 2022. The move would boost Zip’s global expansion strategy, expanding its services to 15 international markets by supporting entry into the US market.
As part of this high-profile acquisition venture, Zip engaged ClearPoint to conduct a high-level technical due diligence (TDD) assessment. This process to assess the technology and related aspects of Sezzle provided Zip with the insights necessary to inform them on how to move forward.
Typically carried out over several weeks or months, TDDs provide both parties with a clear technical evaluation, supporting large-scale investment decisions that influence the technology roadmap for an organisation. TDDs can provide a foundation for potential restructures, so it’s crucial that an investor has a firm grasp of the platforms and how they’re used.
The deliverables of a TDD will vary from business to business depending on the nature of the merger, acquisition or level of capital investment, but generally include a structured and in-depth assessment of a company’s technical architecture, technology staff, infrastructure, processes and software products. TDDs are a complex, but necessary, procedure to identify the ability of a target business to handle scale and growth.
The benefits Zip attained from conducting a TDD included:
- Identifying the strengths and weaknesses of the company being assessed
- A deeper understanding of engineering maturity and technological systems and processes
- An assessment of compatibility, security and potential risks
- Identifying key deliverables and prioritising areas of focus.
With discussions moving at pace, Sam McGoldrick, Engineering Director at Zip, provided a comprehensive brief and tight deadline – owing to the rapid nature of the deal on the table.
We engaged ClearPoint based on their strength, expertise and capability in this field including their significant experience completing other TDDs. We knew they could provide us with the deep technical knowledge we required for this acquisition and have full confidence they could turn it around swiftly.”
Sam McGoldrick, Engineering Director, Zip
The assessment focused on top-level findings and key recommendations based on the below key themes:
- System and Technologies
- People and Interactions
- Modern Engineering Practices
The ClearPoint team set about collaborating with the Zip team to evaluate the tech stack, cloud data architecture and monitoring systems, while considering stress points, areas of capability, CICD approaches and the technical roadmap. By focusing on specific details within the technology landscape, the team was able to assess the potential for integration and effectiveness, and explore the rationale for particular software or processes.
For Sam, the TDD also provided a window into industry standards and areas that need investment or improvement.
The accelerated nature of the deal at the time enabled ClearPoint to deploy a dedicated team to focus on the interplay in the current tech stack, with a high-risk-only lens guiding their assessment.
The less is more approach allowed the ClearPoint TDD team to quickly conduct relevant workshop interviews, providing high-level insight into engineering maturity and an in-depth assessment of software code. This analysis produced a final report on the findings with key deliverables over an 8-day period, in a highly targeted approach. The insights and outlined deliverables gained through the TDD findings report, gave Zip the confidence in making informed technology decisions.
ClearPoint understood the criticality of providing Zip with executive-level findings, within a tight timeframe. We configured our lines of questioning with Sezzle to narrow in on what Zip urgently needed, focusing on technical or organisational risks to scalability. With a range of engineering viewpoints, we could rapidly highlight their strengths and where potential challenges might arise.”
Mike Gatman, Chief of Transformation, ClearPoint
ClearPoint was able to maintain critical timelines because of a highly capable, experienced team and strong existing relationships with the Zip team – based on trust, reliability and the ability to always deliver.
At ClearPoint, we’re here to take you on your digital journey so you can develop your capabilities and achieve business goals. Transformation isn’t just about introducing new technology, it’s a business-wide change that disrupts every part of an organisation. Our job is to help guide you through that process to give you the support you need to succeed. Take a further look into how ClearPoint can help your business’s digital future.