So Larry Diamond, please go ahead.
Thank you very much, and good morning to everyone. Welcome to the Zip investor presentation. As we talk about the exciting acquisition of QuadPay and the capital raise. Before I kick off, I'd like to make a couple of introductions. You know, speaking is Larry Diamond, CEO of Zip. In here with me today, we have Peter Gray, Co-founder and Chief Operating Officer. We also have Martin Brooke, Zip's Chief Financial Officer, and Tommy Mermelshtayn, our Chief Strategy Officer, and who is the architect behind these transactions. I'd also like to welcome Adam Ezra and Brad Lindenberg, who are the Co-founders and Co-CEO of QuadPay over in the States. So today is a very exciting day for Zip and a really transformational day for us.
And great to bring some positive news, you know, to the business and more generally. We'll go through today about the QuadPay transaction, as well as the investment from Susquehanna. So if we just race through the presentation, and then at the end, we'll also open up for questions. So if anyone wants to submit questions, you can do that, and we'll moderate at the end of the call. So just kicking off on slide two. So, you know, really for us, less than 12 months ago, we spoke about the Zip strategy. It focused on executing on our core business over here in Australia. You know, we spoke to product expansion, and we spoke to international expansion.
And so, you know, we're very excited that less than 12 months from when we announced that, we've been able to sort of demonstrate that we're continuing on that global expansion story. And very excited to announce the acquisition of U.S.-based buy now, pay later leader, QuadPay. And we'll kind of go into QuadPay. It's a really exciting and really innovative business. And we'll also talk about the investment, again, which is an innovative and really great result for shareholders, from Susquehanna, who are coming in with up to $200 million, at a premium to the price. And that's by way of convertible notes and warrants.
And I think the fourth story is, you know, post-completion, this business will be, you know, one of the world's really exciting global buy now, pay later stories. There aren't many that can talk to being able to offer buy now, pay later services in, multiple markets. And this really cements us, you know, as, as being part of that, part of that family of global payment leaders. Post-completion, we will be in five markets, obviously, Australia and New Zealand, U.K., U.S.A., and we have a strategic interest in, Payflex. The combined business will also be run rate about $3 billion based on the March quarter. And, if you kind of turn to slide three, this really talks about the scale and growth that combining Zip with QuadPay delivers for shareholders.
Post-completion, if you just look at the March run rate about three billion. Of that, QuadPay did about a billion in run rate volume, if you look at the March quarter, and it continued to grow. Similarly, on the revenue side, they're contributing to just under 30%, about 28% of revenue, and have got a really exciting revenue profile. And on the customers, I think that's probably the really exciting piece as well, is these products and services are demonstrating the ability to acquire customers at a very low cost, and build a long-term financial partnership with those customers. And it's really, for us, why the buy now, pay later sector is such an exciting sector for all of us.
Being able to, you know, access customers through this payment relationship and build a long-term partnership with them. As we combine the business as well, we will have over 400 staff. Across the Zip group, we have just over 350, and QuadPay has just north of 60 staff, operating in America, based out of New York, and they also have an operation in the Philippines as well. And I think finally, for us, you know, having a global story without the U.S. really wasn't a global story. The U.S. market is about $5 trillion in sales.
You know, well north of $500 billion is online, and that talks to a market that's 15-20 times the size of Australia. If you look at the growth and the excitement that we've been able to bring to the Australian market, you can just imagine how much we can bring together with Quad over in the U.S. In terms of summary of the transaction, you know, we've started. If you kind of cast your eye back to the history here, we acquired the PartPay technology business last year, and as part of that, inherited a stake in QuadPay. We started talking to the guys probably about six months ago, and really got pretty close to announcing something pre-COVID.
Obviously, COVID took a lot of us and boards, you know, right around the country, around the world, to really rethink how things are gonna play out, and we put a pause on the transaction as we looked at what was gonna happen, and you know, we're very, you know, pleased to see the resilience of the sector over the last couple of months. Not just in the flight to online, but also in the credit performance, and so for us, you know, that gave the board the confidence to re-engage, and we moved pretty swiftly to execute the transaction, which needed, you know, not just obviously securing terms with the QuadPay guys, but also making sure we had a strong funding partner.
So, you know, this was designed very much as a merger ratio, and post-completion, you know, the vendors of QuadPay will have about 23.3% of the combined group at an implied enterprise value pleasingly as well, you know, this is a win-win result for both sides. It rewards value that's being created by the QuadPay team over in the States, and equally for Zip shareholders on both a revenue and transaction multiple basis is accretive. As we look at QuadPay, you know, the business, really exciting business, started out in 2017, so really only three years ago. But if you just look at what's happened in America with buy now, pay later, three years ago, it really didn't exist. It was traditional consumer finance models.
And so what we've seen happen in three years is quite remarkable. But again, I'm sure the guys will say really only getting started. It was founded by two Australians, actually, Brad Lindenberg and Adam Ezra. And later in the presentation, we'll ask them to introduce themselves and tell a little bit about their history. They're based in New York, and really one of the top four, top five consumer finance buy now, pay later models over in the States. But what really has been attractive to us is just they're focused on innovation, really leading the pack here in terms of innovation on the product and customer side. And we'll talk about that shortly with their virtual card technology.
The rationale, as I've touched on, is Zip being able to execute quickly on its global expansion story. The buy now, pay later phenomenon that we've seen here in Australia, and the aversion to credit cards, and the shift away from interest-bearing credit cards towards interest-free installments, we see as rapidly evolving. It was really important for us to have an exposure to that market. This, you know, we felt was the quickest way to enter the market by partnering with a really solid business that was on a really great growth curve. You know, the other important piece of the acquisition rationale is, obviously, as we go for growth, partnering with a business that has really strong economic fundamentals.
And then, if you look at this, at the QuadPay business, how they derive income, the cost of goods sold, and the unit economics, it's a very exciting business. And if you look at their net transaction margins, they would be at the top of the pack there with, around 2%. So really strong unit economics, which provides a great foundation for us to scale in the U.S. and drive operating leverage to drive profitability over time. The other feature that we saw as really exciting for us was, you know, we did see them as a category innovator in the payment space. And they were really one of the first to leverage virtual card technology in partnership with Stripe to issue credentials and allow customers to transact anywhere in installments, online and in-store.
You know, since then, we've seen a number of players adopt some of that technology. But at the foundation of this business are founders that are all about innovation. You know, what we have today is not necessarily what we're gonna have tomorrow, and being ahead of the pack to compete is really, really important. And I think the other attractive feature about this transaction is the world of payments is large. There are some big players out there, the likes of PayPal and so forth. And really, it was important for us as we take on the payment elephants, to build a coalition of founders. A team that can wake up in the morning and energize, and really wanna drive growth.
And so really pleased that we're able to partner with Adam and Brad, founder-led. They have a great team over there. We spent a lot of time working with them during this process and as we think about integration post-transaction, and are really excited about the caliber of individuals they've brought across their management team, marketing, product technology, but also the founders themselves. The other piece of the transaction is the Susquehanna investment, and we'll talk about that a little bit later, but the highlights really are, you know, a partner that has come on board is a you know U.S. growth equity investor who are able to work creatively with us to deliver flexible capital at a low cost, at a significant premium to the current share price relative to a traditional institutional placement.
Documents are signed, of course, but the transaction is subject to, you know, a number of conditions and largely shareholder approval, which will happen at the EGM in the next short while, so we'll now jump onto the QuadPay business, and we'll spend a bit of time just understanding the QuadPay business and why it's so attractive for Zip and for Zip shareholders. You know, first and foremost, you know, this is a business that has proven they can scale, proven they've got the ability to move quickly, and if you look at their growth, it's been really phenomenal. Quick summary of the business. At the end of March, they had 1.5 million customers on the platform. They're now well north of that number.
Over three and a half thousand merchants, and you know, really a strong app. If you look in the App Store, you know, towards December, they were bumping up with the likes of, you know, Klarna, Affirm, and Afterpay. They're now a top 100 app, and that's really a big focus for them. The app experience is everything, and we've been pleased by the customer experience that these guys have been able to deliver. At the end of March, they were run rating about AUD 70 million for the quarter, and when you add that to Zip's 180, takes us to about a 250 number, which is a really great number for the business.
And we're annualizing at just under $1 billion since then. And the other big piece is around differentiation. You know, this business for us was different, and it was better. They are unique when you look at some of the peers out there. As I said, the focus on innovation. The ability to pay installments anywhere, not just online, but also in-store, by adding Quad into Apple Pay and Google Pay, have been able to demonstrate really strong customer engagement metrics from this product... If you look on slide 10, you can just see here really how, you know, the last 12 months have been really incredible. Month-to-month growth rates of 10 to 20, 20%.
As they keep telling us that they are only getting started and the pipeline is looking very strong. It's a very large market, and we need to continue to kind of drive growth here. At the end of December, shopping period, you can kind of see there, they were doing about 90-100 million AUD. And if you look at Zip, at the time, we were doing about just under 220 million AUD. So really exciting there. On the merchant side, they have 3,500 merchants. Their model has been a little bit different to, you know, perhaps some of the others out there. Probably less focused on the SMB channel and more focused on quality merchants with TTV, mid-market, and enterprise, and they have some really strong merchants there.
Really excited by the pipeline as well. And as we come together as a global business, the ability to sign merchants to a single integration and offer them a, you know, exposure to multiple markets, we see as a really big draw card. Certainly, one of the reasons we were able to transact with Cotton On recently, being able to offer them a service, not just in Australia, but in New Zealand, US, South Africa, and the UK. And we think that's a really important piece to the merchant proposition. In terms of the product construct, this is a Pay i n 4 . It's interest-free. You pay installments over six weeks. All terms are interest-free. Merchants are paid upfront, and then customers pay back over time.
You know, very similar to the Zip product over in New Zealand, paying in 4. Again, a product that we see as a fantastic product for scaling globally, entering new markets, acquiring customers very seamlessly and frictionlessly. But as you can see in Australia, we are, you know, our mindset around the types of products that we can offer are not static, and we see an opportunity really to extend product services, you know, over in the States. Now, there are three ways to pay with QuadPay. They have merchant integrations online. You know, again, leading the way in just the integration technology, where you have the widget on the product page and ability to check out next to Visa, Mastercard, PayPal. That's on the left for an online integration.
In the middle there, you can see the app, and that really is where they pioneered Shop Anywhere, which is the ability to, from within the app, reach out and, you know, go to Walmart, Amazon, any of these other merchants, and pay in installments through a really neat customer experience. Interestingly, you know, in Australia, we delivered a similar service just in the last couple of months for customers during the COVID period. These guys rolled that out in early two thousand and nineteen. And also in-store, again, ahead of the pack here, integrated into Apple Pay, Google Pay, and without the need for POS integration, customers can essentially tap and pay after being onboarded. And so with these three models, they've been able to demonstrate really strong acquisition across all of these channels, but also really strong engagement.
Really pleased by the conversion we've seen across the business, from onboarding through to these different payment journeys. As we touched on earlier, these guys really pioneered the QuadPay Anywhere, or in Australia, what we call the Shop Anywhere solution. We're one of the first to market, and we've got a really strong partnership with Stripe, issuing over in New York, and do a lot of work to bring this to life. It as I said earlier, allows you to pay in installments anywhere online or in store. It's very scalable. It's also allowing them to integrate much faster into merchants. Leveraging the Visa network is a really smart way to scale.
Here in Australia, we adopted a bit of a similar, a different approach, where we spent the last six, seven years integrating into a lot of retailers, which required us to invest a lot upfront in CapEx around plugin integration, POS integration. We definitely view this as a smarter and much faster way to scale. And then finally, on the tech. I mean, tech is really important, and tech is sort of the bedrock of how you scale. A bit of background here. We acquired the PartPay business last year in two thousand and nineteen, working really closely with John O'Sullivan. And they've been able to build a really lightweight, flexible technology stack that could deliver installments into multiple markets.
They imported not just into New Zealand, South Africa, and the U.K. What was interesting is they started a relationship with Adam and Brad many years ago, as they were looking to enter the U.S. market, how they could move quickly. They formed a partnership early on in two thousand and seventeen, and actually leveraged the same stack to enter the U.S. market. Zip's international platform is built on a similar code base. Since then, the team in the U.S. has extended it significantly, particularly with the Anywhere solutions. This portable platform, a lot of similarities, we believe, is gonna be really powerful for us as we scale globally.
And as I mentioned earlier, we have just the last quarter built our single merchant interface, which is consolidating all regions into a single integration point and will help us scale much faster with global merchant partnerships. We're just moving to slide 16. So, you know, with any mergers, what's really important is, you know, you can have great fundamentals, great metrics, great technology, but at the end of the day, if the two parties can't work together, you know, call each other in the middle of the night as we fight in the trenches and build a massive business, it really doesn't come together. And we're incredibly excited to have found common partners, culturally aligned with customer innovation, customer centricity, and responsibility in the DNA. Now, I've personally known the founders for...
many years, and then professionally, we've gotten to know them over the last year and a half. And, you know, we see a lot of similarities across the business. I think what I'd like to do now is probably hand over to Adam and Brad. I think it'd be great to hear from the guys, a little bit about their background, and also how they think we can build a massive business over in the States. So I might hand over to the guys now.
Thanks, Larry, and good morning, everyone. Very excited to be part of the Zip family. I wanted to introduce myself and Adam, and tell you a bit about the journey that we've been on, our background in the fintech in the fintech space, and the opportunity that we see here in the US. Adam and I are both Sydney boys. I've been here in New York now for six years, and we happened to go to the same school as Larry. Best way to think about Adam and myself is, he's the fin and I'm the tech in the fintech. Two ingredients that are very important in building a large global business, in the payments area. I've personally been involved and sold a number of companies in the past, in the payments, e-commerce, and media sectors.
These include CalReply, which is the world's leading mobile calendar marketing platform, with over four million users, which was sold to Rokt, which is now a $100 million revenue referral marketing business, where I serve on the board of directors and as the Chief Strategy Officer. As a background, I'm an engineer. I'm passionate about tech, about innovation and building simple products that millions of people can use at scale across the globe. And that's exactly what we like about the Zip team. They're just as passionate as we are about growth and product. And as you can see from what we've built here, it's highly differentiated and unique in the marketplace. The U.S. market is large.
We're very excited to be addressing a $5 trillion a year opportunity where buy now, pay later accounts for a tiny fraction of this at the moment, and we see huge upside potential, you know, with websites trading, you know, around 20% of volume through these types of platforms after you go live. As the stats show, our growth confirms this. The U.S. consumers are looking for a better way and a fairer way to pay as an alternative to credit cards, and you know, that is the exciting landscape that Zip and QuadPay now confront. I'll throw over to Adam.
Thanks, Brad, and thanks, everyone, for having us this morning. Look, my background's in consumer retail, finance, debt, and marketing. I've got experience in private equity and investment banking. Worked previously at Illyria, and started my career with Larry, actually, at Macquarie Group in the investment banking division. What really took me out of the U.S. was subsequent experience in the retail fashion space, where, you know, my business was developing multiple, you know, proprietary labels and distributing brands over here. We worked with all of the majors. That's where I cut my teeth on e-commerce, but also, you know, it was bringing the skill sets together across finance, e-commerce, and retail, which, I guess, has helped in developing this business.
And look, completely echo what Brad said about, you know, firstly, joining forces with Zip and the opportunity that's in the U.S. market. It's truly enormous, and I believe together, we're a much stronger platform and very well positioned to capitalize on this, you know, changing landscape of payments. We've fortunately had a number of, you know, opportunities, you know, options in terms of choosing our path. But to be honest, this partnership has made the most sense strategically in terms of building a truly global platform and just positioning us, you know, both businesses for long-term success. I'm happy to talk a little bit about the, you know, risk management element of the business.
Look, that's an area that we've invested in significantly since we started this business, and it's an area that we're gonna continue to. It's really what ultimately is gonna drive profitability over the long term. We've been fortunate that in the U.S., the credit bureau system is far more mature than other markets like Australia, so there is a lot of data that we're capturing on the consumer by actually completing soft credit checks on all applicants. But we're also incorporating alternative data sources, looking at data at the merchant level, digital footprint data, and all of that is being leveraged for our machine learning model, so it has become, you know, this part of the business very, very sophisticated.
You know, like Zip, you know, we're using that credit bureau data, which ensures that we understand who is using the platform, and ensuring responsibility and use of this product, and then we also are using a number of very sophisticated or leveraging very sophisticated identification ID verification tools. They also have minimal friction. So it's, you know, when the customer's checking out, we're able to do this in split seconds on the fly without the consumer really knowing what's happening. So, one of the beauties of our model is really this, you know, the short payment cycle, which gives us a very, very quick feedback loop.
So within fourteen, fifteen days, we really have a good gauge as to the performance of a merchant, or if we're onboarding someone very large. And we also have the ability to, you know, very quickly, tweak our origination or risk methods if we do see unusual behavior or a change in delinquency level at the merchant level, but also at the customer level as well. Performance through, you know, through this period has been, you know, something that we were naturally on the outset, you know, concerned about, but has held up incredibly well.
You know, it's actually been surprising to, you know, see how it's all played out, which has actually just given us, you know, a lot more comfort around our thesis and how this product and model performs through down cycles. You know, I think it's also a testament to the work that the team has been doing around risk management, and it's certainly an area where we think there's still plenty of room to improve, but so far it's going excellent. I think on that note, I'll hand back over to Larry.
Thanks so much, guys, and appreciate the late hour over there. No doubt we will be getting used to this over time. I think what Adam sort of touched on is, you know, we genuinely believe that one plus one equals three here. And again, comforted by similar trends we're seeing in the States around the resilience of BNPL, the flight to online and the shift away from traditional credit. Before we open to questions, I think we'll spend some time just on the SIG investment. Really excited about this investment and partnering with Susquehanna International Group and Heights Capital Management, in particular. And I've seen a few questions come through on this, which we can tackle afterwards.
So at a high level, as we thought about the U.S., and we thought about the next phase of growth, it was really important to sort of tick a couple of boxes. One was start to bring onto the register some leading U.S. growth equity investors. We obviously need a partner that can meet the timetable and a partner that is that we can work with over time. And very privileged to work with Dan and the team over at SIG. SIG is one of the largest privately held financial services firms. This side of the business is in the long growth equity side, and they've been involved in some really exciting investments.
Credit Karma is a big fintech over in the States, Payoneer, another payment company, and everyone's hot flavor of the month, ByteDance, which is behind TikTok. If we move on to just what we've been able to secure. So it's up to $200 million, which is a mixture of $100 million convertible notes and $100 million in warrants. As we looked at the type of investment to bring into Zip, we obviously looked at a range of opportunities, whether it's a straight equity placement, and what we were looking for was a solution that helped us achieve a premium to where the current share price was, because we genuinely felt that as a board, we were undervalued, and particularly with the combination of Quad.
Very pleased to be able to structure this solution. A lot of hard work and effort has gone into this. It's innovative, definitely, one of the first for Australia, although quite common globally, I must say. In terms of the actual specifics, the first piece is a convertible note of AUD 100 million. It is a five-year maturity with a ceiling of AUD 5.53, which was a 50% premium to where we were prior to going into trading halt. The intention is that the holder will convert every six months or so.
If you kind of work it out, it's a very low-cost capital solution for us, starting out at sort of 1-2%, and if you held over the life, about 3%. So really strong there. And obviously subject to shareholder approval in the next month or two. The second piece is a warrant, again, $100 million with an exercise price of $5.16, which was about a 40% premium to where we're trading, and that's three-year money. So a combination of these is really gonna help us achieve our growth story, not just locally, but particularly abroad. And obviously, the majority of those funds are to support and accelerate our growth overseas. QuadPay is well-funded, but with this firepower, we believe that we can grow even faster.
As I said, we'll probably leave this. There's some specific questions on this, which I'll give some more airtime to shortly. So I think in summary, you know, really excited about this. It's been a transformational deal for Zip. Very pleased to be able to move so quickly on the global story, which we told you guys just less than a year ago. The combined business will become one of the global leaders in BNPL, but clearly a long way to go for us to be bumping up against some of the payment giants like PayPal, that we believe we can get to over time. And you're certainly able to read some of the rest of the terms in the deal.
Probably the other call-out, which I didn't touch on, is we've also included a $60 million USD incentive for the founders, which is very, which aligns with pretty strong growth targets over the next 24 months, where to achieve all of those incentives, they really have to achieve about a $1.2 billion per quarter TTV, which is about $4.8 billion USD. And you can just imagine how big a business we would be by then and the value that they would deliver to us. We thought that was really important to align an incentive and, as the guys sort of touched on, they're absolutely here to stay as we tackle multiple markets and try and build a really strong, strong global brand. The transaction is obviously subject to a number of conditions.
We'll be sending out a notice of meeting for the EGM, holding that, and then looking to close the CPs, so thank you very much for that initial part of the presentation. We will now hand over to Martin, who will moderate the Q&A, and you'll probably hear from myself, Pete, or Tommy as well.
Thank you, Larry. For those that haven't asked questions, you should be able to ask, submit questions through the box in the bottom right-hand side of the screen. So if you've got any burning questions, please feel free to add them in. We do have a large number, so I will try and sort of consolidate into themes. The first question really is why now? Why are we doing this transaction in this environment?
All right. Thanks.
Thanks, Larry. Thanks, Martin.
Back to me. Look, that's... Yeah, that is a good question, and obviously, things have been quite volatile over in the markets. And certainly, as we sort of touched on earlier, when we were looking at this transaction pre-COVID, we actually put the pause on the transaction while we assessed as a board, customer demand, and customer performance with regard to credit. And obviously, we're very, you know, supported by the trends that we saw. For us, what's important is about the long-term thesis, and I think that holds absolutely true. For us, you know, we're not necessarily worried about the short term. We are about the long term, and for us, the resilience of the BNPL has actually probably invigorated us as to the size of the opportunity.
The U.S. market is incredibly big, and if we didn't move now, you know, we felt that we would lose out. It is an absolute land grab. So for us, timing, although it looked incredibly challenging eight weeks ago, we were very fortunate to be able to close quickly, and having a funding partner come in as markets recovered was really important. The business is also still incredibly strong. Growth continues, credit performance continues, capital is recycling really quickly, and the unit economics during this time have been holding up. So our view is that with BNPLs, a sector that really didn't exist, you know, a few years ago, in the next few years, it's gonna look incredibly different.
If you look at the share of checkout we're seeing over here in Australia, you know, some merchants can have 20%-40% from different buy now, pay later players. You can expect a similar trend to happen really quickly, and so we felt that the time was now. Things fortunately came together, being able to execute the transaction quickly and get the funding, so yeah, so a little bit about that one.
Thank you, Larry. Second question, convertible notes, obviously a very innovative structure. How did we end up with that structure? How did we choose Susquehanna? What process did we follow?
Yeah, I'll take that one, Martin. Thanks. So I think the important call-out is that this deal wasn't done overnight. So, as a board, we're certainly very, very rigorous in looking at the value equation on this instrument, and we genuinely believe this capital is in the best interest of the shareholders. So we took a view, as Larry touched on, that we were significantly undervalued, and this instrument was a better outcome for shareholders than perhaps a placement at a discount. So we actually ran a process. We got quite a large number of term sheets on similar structures or alternatives for the board to consider. And ultimately, we were very impressed by the team at Susquehanna, and certainly we really did sync with them from the early meetings.
It's important to call out this is their first deal in Australia, so we were able to secure great terms as they sort of looked to establish a beachhead here. Hopefully, it's the first of many for them. As Larry touched on, it certainly is a very innovative structure and the first of its type in Australia, although it's somewhat more common in the U.S. So we get capital at very low cost and flexible now, so that we can utilize it to drive growth and take advantage of the massive market opportunity that we're all very excited about.
The capital was given to us at a premium to where we were trading, which limits dilution and without the need for any control or governance rights that may accompany similar investments under different structures. Effectively, it limits the cash call on the business also because Susquehanna can take interest in shares and regular installments at par, as opposed to raising on market at a discount. And, you know, finally, it really did see an alignment of interest between us and Susquehanna. They make their returns if the share price runs, so they're very aligned in terms of with Zip and the rest of our shareholder interests, which really did demonstrate a validation of our outlook, you know, and view of the world.
So we're sort of very pleased to take that investment and partner with the team there.
Thanks, Pete. Next question. Obviously, the U.S. big market, very competitive. Maybe talk a little bit about the competitive environment in the U.S. and why Zip struck quite a win.
And maybe you should. Maybe we hand over to... I mean, we can have a go at answering, but I think we put the guys in the hot seat.
For the main man.
Adam or Brad, did you want to take this one?
Yeah, look, the environment here-
Yeah, Adam.
You know, Sorry. It's Brad here. The environment here, you know, is still very much in its infancy. We see a huge opportunity to come, you know, to scale the business and to really build a differentiated product. You know, our business model not only relies on the online checkout experience, but we also have this app experience, which allows consumers to use QuadPay wherever they like.
... And so you're not necessarily competing directly when someone can download the app and use it on Amazon or use it at Whole Foods, you know, or buy on sites that you aren't necessarily integrated with. So, you know, we have like a flywheel approach, where we're trying to sign up merchants online, get them integrated at checkout, and then provide those customers with a, you know, a much broader experience where they can use QuadPay anywhere. So when you bring those two concepts to, you know, together, you know, it does provide very differentiated experience that, you know, doesn't have the same competitive dynamics as a pure play online model.
Okay, thanks.
Look, just adding to that.
Yeah. Go for it. Over it.
No, I just as I said, you know, innovation is absolutely key, and you know, not dissimilar to Zip, it's been at our core, and it's been key to getting us to this point today. You know, we've got a very healthy roadmap of tools and features which are all aimed at enhancing the consumer experience, and driving incrementality and results for our merchant partners.
I think longer term innovation is absolutely critical, and you know, I think we've been able to demonstrate up until today, you know, some of the things that are unique that we've been able to do, whether it's the ease of integration, you know, where you can deploy QuadPay in store or online very, very quickly, far quicker than you know, the traditional, the legacy approach to implementation, the app. You know, there's many things that in mind, which we think will just continue differentiating us and furthering our position.
Thanks, guys. While you've got the floor, probably another one for you. Maybe if you could talk a little bit about the revenue mix between sort of customers and merchants and sources.
Yeah. So look, our core model is still, you know, the checkout model. So, we're predominantly making revenue from, from merchants. They pay a fee, a discount rate. Our sticker rate is 5.9% plus $0.30. And then we're also looking at other ways in which we can, you know, monetize other channels, which we can monetize. But right now, it's predominantly being paid by consumers. Sorry, by merchants. Just to clarify that, by merchants.
Sorry, guys, that was user error. I had us on mute while we were listening to Brad and Adam. Next question was one for Larry. In terms of what's our product strategy for the U.S., do we plan on taking Zip products across?
Yeah. So thanks, Martin, and apologies there. I was talking for about five minutes on-
Yeah, thanks. You got mute.
While we were muted. So as I touched on earlier, the pay four model is a really powerful model to enter markets and acquire customers at a very low cost of acquisition, and obviously build a relationship with them over time. And that's not just America, but many other jurisdictions. That's why we have seen Afterpay scale, PartPay and QuadPay as well. The Zip Pay product we have here in Australia, which is more an account concept, has also been very successful. It does have a different mix in merchant and customer fees, but it's a model that is actually quite widely used in other geographies such as Asia and Europe. So for us, at the end of the day, what we're talking about here is a couple of levers.
It's variables, whether it's through a payment lever or the fee lever, and it's actually relatively easy to adapt over time. We think right now it is the right product, absolutely, but over time, we are a product house, and how we evolve products, how we evolve the customer relationship, the products that we can offer to them are really important, and we've done that over here in Australia, and we will absolutely retain an open mind as to how we roll that out. Critically, it's important for us to have a technology stack that has the velocity, ability to scale, and adapt, and that's exactly what we have in the QuadPay platform, so that gives us option value as we look to partner with different parts of the market.
Thanks, Larry. Maybe, maybe another question for you, or maybe even Tommy. Are there any other markets in the hopper? Where else are we looking to expand?
...Hi, this is Tom. Thanks for the question, Martin. We have a huge opportunity now in the U.S. We still have lots of growth and upside here in Australia, New Zealand, and the business we're trying to build in the U.K. So I think, from a management perspective, we have enough on our plate right now and a huge opportunity with the markets we currently play in.
Thanks, Tommy. Maybe one for Pete. Can you share a little on how Quad are currently funded?
Thanks, Martin. As Larry touched on, Quad had significant capital to fund the business on a good runway. We've since raised some money to accelerate that growth. On the debt side, they have an off-balance sheet warehouse with a top-line limit of around $40 million. Currently, utilization is under $30 million of that facility, so they have some nice headroom. For that facility, the beauty of this type of receivable is that they obviously recycle very quickly, which reduces the need to, you know, have a warehouse the size of the Australian business, for example. The guys are well advanced in terms of finding moving to a new funder with a significantly larger limit.
You know, very, very pleasingly, as Adam touched on during the call, the performance of the receivables has remained remarkably strong in the face of COVID and the downturn in the economy. We love the ability that the guys had to flex the scorecard and the algorithms to deliver great outcomes. Very, very comfortable with where we sit with regard to funding those receivables.
Well, thank you, Pete. We might just take two more questions as we're sort of running out of time. Next one is maybe for Adam, Brad. We see a lot of interesting news at the moment happening in the U.S. Obviously, COVID's a very different experience we've had in Australia. What's the impact that you guys have seen in sort of COVID, current events on performance in the U.S.?
Yeah, Adam here. I'll take this one. Look, you know, we definitely saw, you know, a slight dip going into the second half of March. I think at that point in time, there was a bit of panic generally and not knowing what it all meant. You know, fortunately, the government responded very quickly with meaningful stimulus, and it's something that they're, it appears, they're very committed to ensuring there's sufficient stimulus in the economy to keep things moving, despite the obvious, you know, increase in unemployment. You know, we took quite a defensive approach. Just obviously, you know, entering very uncharted territory, you know, just not wanting to be overexposed.
I guess it was a you know watch and learn, and as I mentioned earlier, there is a very quick feedback loop. And the performance has held up very, very well. You know, April, the second half was naturally stronger, far stronger than the second half, and that has continued following. You know, it's things seem to have really leveled out, and this is, I think, just a function of being a digitally focused business. We're very, very fortunate, you know, that there's this acceleration and transition from offline to online because everything is shut. You know, and at this point in time, our in-store business is very nascent. You know, so things have held up relatively well.
Great. Thank you. And, maybe the final question, really one for Larry: Where do you see Zip in three years' time?
Thanks. Thanks, Martin. So, you know, for us, the opportunity before us is incredibly large, and as we sort of, you know, talk about here internally, it's, you know, shame on us if we don't execute on this. Because at the end of the day, coming up with the right product market fit is kind of one thing, but the timing, which tends to be external as well, is not necessarily in one's control. I think we are very privileged that the product solution that we've come to market with, and the shifting sands that we're seeing, I guess, across Australia and globally are providing enormous tailwinds.
I think for us, as a business, in three years' time, you know, our vision is to have, you know, a global brand, a global platform that is respected as a true payments leader with, you know, innovation and customer centricity at the heart. You know, a large engineering practice that's obviously behind that, that gives velocity and the ability to compete in markets. I think we've definitely got a really strong presence in our core markets with a meaningful share, and you know, customers today, we have about 3.5 million, but you look at some of these growth rates and the expectations that we've set with the QuadPay team, and you know, just cast your eyes at how many customers PayPal has, hundreds of millions.
And again, these products have demonstrated that there is a need. They've demonstrated the ability to sign up en masse at checkout, even faster than some of the traditional payment methods, and there's no reason why we can't build something equivalent over time. Obviously, on a forecast, but these are ambitions, and that's our North Star. And ultimately, the app, an app that we all can be incredibly proud of, that builds deep customer engagement. So I think that's probably it for me. I'd like to thank everyone for kind of listening in. Of course, you know, investors, feel free to reach out if you'd like to go deeper on any of the structures.
Obviously, you know, some of this takes a little bit of time, and thanks for your support.
We look forward to it.
And touched on, for those in Australia, we look forward to seeing you at the EGM, which will happen, very, very shortly. Thank you very much.
Thank you.
Thank you.