The Zip Co Ltd (ASX: Z1P) share price has performed very strongly over the last four years.
Buy now pay later (BNPL) has seen a lot of growth with an enormous rise in transaction value, leading to a rise of revenue and also the market capitalisation of the companies involved.
Indeed, just look at the all-share deal by Square to buy Afterpay Ltd (ASX: APT) which valued the ASX share at $39 billion at the time of the announcement.
How much has the Zip share price risen?
Zip shares have risen by almost 900% over the last four years, making it one of the leading performers in the S&P/ASX 200 Index (ASX: XJO), though it hasn't been in the ASX 200 that whole time.
It's a very different business compared to August 2017.
The business in 2017
So much has changed that it even used to have a different name. Four years ago it was called ZipMoney.
In August 2017 it reported that during FY17 it made $17 million of revenue (which was an increase of 431% over the year), with transaction volume of $230.7 million (up 348%). Bad debts were 1.9% in percentage terms.
At the time, it had more than 300,000 customers and 4,400 merchants.
A lot of growth
The 2018 calendar year saw a number of big wins such as Super Retail Group Ltd (ASX: SUL) the Wesfarmers Ltd (ASX: WES) businesses of Target, Bunnings and Officeworks.
It's a very different beast now, compared to four years ago. The Zip share price may be benefiting from Zip's global reach.
Zip has acquired Quadpay in the US, Twisto Payments in Europe and Spotii in the Middle East.
The company also recently launched Zip organically into Canada and Mexico.
Remembering that Zip made $17 million of revenue in FY17, it generated $129.9 million of revenue in the last quarter of FY21. With a record month of revenue in June, it said its revenue is annualising at $537.2 million.
Quarterly transaction volume for the three months to 30 June 2021 was $1.8 billion (up 116%). It finished the quarter and FY21 with 7.3 million customers and 51,300 merchants.
At 30 June 2021, Zip said that its net bad debts were 1.82%.
How much did $1,000 of Zip shares turn into?
The rise of the Zip share price would have turned $1,000 into just over $9,900. That means that the investors would have gained almost $9,000.
However, the law of large numbers certainly makes it harder to keep growing at such a rapid rate considering how big the Zip business already is.
