A breakthrough business that's changing how we shop

Run a business from your bedroom, get a degree, work as an investment banker, start another business, get married, list your company on the stock exchange. Celebrate your 27th birthday.

The CV of Bachelor of Commerce alum Nick Molnar is enough to exhaust the most ambitious millennial. And his latest business just happens to be the highly successful Afterpay, a company offering a ‘buy now, receive now, pay in four instalments’ service to its retail consumers.

The company’s rapid rise has surprised no-one more than Molnar himself. As CEO, he has pedalled hard in the last year to build up the business infrastructure while dealing with runaway demand for its services. The numbers tell the story. Raising its first round of money in August 2015, Afterpay is now a ‘unicorn company’, that is, a startup valued at $1 billion – a statistical rarity in the startup universe.

Molnar has a relaxed nature and smiles easily. At the same time, he often has to run on little sleep and gives the impression of a man with a tireless appetite for work. This drive is reflected elsewhere in the Molnar clan. After selling the family jewellery business, his father Ron had barely been retired a week before he became restless enough to take up Uber driving, a job that sees him regularly send potential clients to his son’s company.

The Afterpay mechanism is simple enough. By shopping with participating retailers, shoppers are able to pay for individual purchases in four fortnightly payments. Afterpay pays the retailer immediately after the transaction and the retailers pay Afterpay a fee for each transaction. A big plus for retailers is that Afterpay bears full responsibility in recovering money from the customers on the due dates.

For the critics who say Afterpay encourages greater consumer debt, Molnar counters that most of Afterpay’s customers are millennials, whose budget-conscious spending habits were shaped by the global financial crisis.

“I’d just turned 18 when the crisis hit, and the lesson was: only spend money you have,” he says. “Afterpay is a budgeting tool rather than a credit tool and our customers have a clear preference for debit cards.”

The company’s latest financial results attest to the success of the business model. It has 10,000 retailers on the books – ranging from boutique operators to massive retailers – and more than 1.3 million consumers.

The We Love Afterpay Facebook page is further testament to the company’s popularity, being a hub for retailers to tout their wares to a 100,000-plus following.

While a student at Moriah College, Molnar worked in the family jewellery business at Sydney’s Wynyard train station. He says he was the worst employee possible, but the job fuelled his innovative streak.

“I was always entrepreneurial, trying to come up with a way to trade my next product and make a dollar,” he says. “I was importing and selling headphones from Japan when I was at school. There was always something.”

A rugby scholarship sent Molnar to the University of Sydney, where he enrolled as a commerce student majoring in finance and international business.

“My studies gave me the basis for many of my key decisions in my journey at Afterpay,” Molnar says. “My finance major provided analytics, financial modelling and attention to detail. Mergers and Acquisitions, run by Senior Lecturer of Finance, Angelo Aspris (BCom(Hons) ’05 PhD ’09), was without doubt my favourite subject.”

He dovetailed his study with his first e-commerce enterprise, leveraging his parents’ relationships with suppliers to sell jewellery on eBay. When he was 19 and working out of his bedroom, Molnar was the biggest eBay seller of jewellery in Australia.

Despite his success as an e-tailer, Molnar still felt the need for a ‘real job’ after leaving university. He kept the business going but became an investment banker. “I was probably making five times more selling jewellery than in the investment banking job. It reached the point where the guy who hired me said, ‘I’ll keep your job open for 12 months, but you should be running the jewellery business full time’. He actually pushed me down the entrepreneurial path, and for that I am forever grateful.”

The man who hired him was venture capitalist, corporate advisor and latter-day campaigner for a more equitable economy, Mark Carnegie, who, aside from mentoring Molnar, told him there was more money to be made in mass-produced lower priced jewellery than high-value products.

During one of his regular order-posting trips to the post office in Bellevue Hill, Molnar was approached by neighbour Anthony Eisen, then Chief Investment Officer at investment company Guinness Peat Group. Eisen’s curiosity was piqued by seeing Molnar’s bedroom light on late in the evenings. The two hit it off, later cementing their relationship by co-founding Afterpay.

Molnar had retail experience and Eisen, financial expertise, but lacking some technical knowledge, they partnered with Touchcorp, a company accomplished in processing payments for large scale operations including the Medicare HICAPS rebate program.

The partnership led to a full merger of the two listed businesses last year, with Afterpay Touch Group relisting on the Australian Stock Exchange in June. Originally priced at $1, the shares now trade at $6, helped by the fact Afterpay has signed up retailing behemoth Wesfarmers, expanded into New Zealand and made the move into the travel industry via an agreement with Jetstar.

If Molnar feels the pressure, he doesn’t show it, saying he’s humbled and energised by what he does. “As you keep peeling back the layers, there’s just so much more opportunity, with the chance to build a positive legacy,” he says.

He does have his quiet place though, for clearing the mind and recharging the batteries, and that’s on the ski slopes. He doesn’t get there as often as he used to but it’s one of the few places where all he has to focus on is his next turn. 

Written by Jocelyn Prasad
Photography by Stefanie Zingsheim