The AU$39 billion acquisition of AfterPay by US financial technology enterprise Square has prompted share prices in AfterPay to skyrocket, and its new international parent company to be introduced to the ASX.
This deal isn’t just momentous for shareholders or investors alone, however. The fact that the largest M&A deal in Australian economic history has come from an innovation in fintech, reflects that Australia’s tech sector is ready to be recognised on a global scale.
The acquisition of AfterPay is likely to pave the way for some more Australian app development companies, game development agencies, and other players in our national tech sector, to start introducing their innovative software into the wider world of international industry.
Understanding AfterPay’s ‘meteoric’ success
The seemingly whirlwind success of Afterpay can potentially be boiled down to the unexpected growth opportunities presented by the global pandemic. As the first wave of COVID-19 hit Australian shores in March 2020, Afterpay’s share prices were as low as $8. This enterprise that was determined to provide primarily younger consumers with more economic stability in regards to credit, was greeted by great economic uncertainty themselves upon opening their virtual doors.
Over the ups and downs of 2020, this homegrown fintech enterprise was able to bolster itself with Australia’s unprecedented surge in online shopping, as well as accruing investors in the wider world of fintech, including investments provided by the Chinese investor, Tencent.
AfterPay founders Nick Molnar and Anthony Eisen stated in May 2020 that geographic expansion was the next natural step for AfterPay following its national success, but that procuring the right investors or partners was crucial to the longevity of their enterprise.
This investment back in May 2020, was an early indication in itself that the role AfterPay played in the wider environment of eCommerce, had benefits that could transcend the Australian market alone. It’s likely that Jack Dorsey’s Square was one of a slew of international fintech enterprises that had these Australian innovators on their radar.
The role of app development in modern industry
The question that aspiring Australian software developers have to answer is this: what purpose can your software hold for users or consumers at an international level?
This may be difficult to answer for developers who are working for businesses or organisations looking to develop apps specifically for their national consumer base, as is the case across a range of industries, including financial services or institutes like banks moving into app-based banking.
Over the past few years, Australia’s relationship with app development has become increasingly interwoven with the needs of enterprises that operate outside of the tech or fintech sectors. Every Australian bank is expected to have its own app, as is every Australian tertiary institution, national fast-food and general hospitality chains.
Whilst there are clear benefits to providing Australian customers and consumers with digital channels wherein they can efficiently interact with larger Australian businesses, app development can play a larger role that transcends simply being an accessory to pre-existing industry.
Apps do have the potential to become industries themselves, and the AfterPay M&A deal may be just what we need to change our national narrative surrounding app development. Understanding that our innovative software can play a greater role than we may believe possible, is our key to experiencing greater success on a global stage.
Channels and opportunities for potential further growth
Many other Melbourne-based startups and small businesses experienced a similar level of duress in the early days of the global pandemic, but what sets fintech aside from other industries, is the simple fact that this technology became incredibly vital to the ‘new normal’ brought on by COVID-19.
For fintech enterprises like AfterPay, the evolving nature of eCommerce coupled with the growing need for more secure sources of consumer credit, propelled the company to greater heights alongside its investors. Given that AfterPay was founded in 2014, the company’s success was by no means ‘meteoric’, but is reflective of an enterprise that had conducted thorough market research and critically evaluated all of its potential growth opportunities in order to ensure its own longevity.
Homegrown app developers who are looking to build their own enterprises from the ground up, need to pay attention to the evolving needs and concerns of consumers post-COVID.
Software that’s able to provide solutions within the realms of sustainable or ethical consumption and production, the creation of jobs and providing added security to the gig economy, and catering to the emergence of the ‘hybrid working model’, are likely to fulfil economic needs at a global level.
Whilst AfterPay’s AU$39 billion spells promising prospects for other homegrown app development companies and professionals, it’s likely that continued innovation in the fintech sector will reign supreme over software development in other industries.
Even so, Aussie developers are set to continue their exploration of sustainable development, and the many bridges between producers and consumers that can be forged through software development.
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