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(Bloomberg)—As a wannabe investment banker, Afterpay Ltd. co-founder Nick Molnar was told to stick to his “side hustle” of selling jewelry on eBay Inc. instead of taking a job with a venture capital firm.

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If that didn’t work out, his would-be boss at the company where he was interviewing promised to keep the job open for him for a year.

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Heeding the advice, Molnar managed to boost those jewelry sales sixfold within a month. About three years later, he launched the buy-now-pay-later business, Afterpay. On Monday, just five years on from the firm’s stock-exchange debut, Molnar, 31, and his former neighbor and co-founder Anthony Eisen, 49, agreed to sell Afterpay to Square Inc. in a $29 billion deal. That will boost the value of their holdings to roughly $1.8 billion each, making them two of the 50 richest people in Australia, according to the Bloomberg Billionaires Index.

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“It was clear from the beginning that Nick was going to be a success,” Mark Carnegie, founding partner of venture capital firm M. H. Carnegie, said in an interview. “The kid’s just got it, he’s got those entrepreneurial infra-red glasses. He can see things that others can’t. I said ‘Nick, rather than sitting there doing the shittiest job in creation, which is being an investment banking analyst, go back to your side hustle and see what you can do’.”

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What Molnar has actually been able to create is the most valuable financial technology company in Australia within barely seven years, pulled off the biggest merger and acquisition deal in the country’s history and helped boost the fortunes of a number of Australian retailers. Carnegie recalls that Molnar, whose great-grandfather ran a business leasing jewelry on a pay-as-you-wear basis for aspiring aristocrats in pre-war Hungary, “saw the nexus between retail and next-generation financial services in a way that others couldn’t.”

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Square, the digital payments platform led by Twitter Inc. founder Jack Dorsey, was attracted to the non-traditional consumer-financing model of the business, founded by the high-school rugby star and his investment banker neighbor. Chief financial officer Amrita Ahuja described it as an alternative to traditional credit.

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Afterpay allows people to buy goods online without having to spend anything upfront. It costs nothing for users if they end up paying back their four installments on time, while retailers are charged a fee for the service. Founded just six years ago, it’s now offered by almost 100,000 retailers around the world and has more than 16.2 million customers, according to a statement from the companies Monday.

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Early investor and Afterpay board member Dana Stalder said he was captivated by the two founders the first time he met them. A former PayPal Holdings Inc. executive, Stalder was introduced to Molnar and Eisen in 2017 to talk about expanding their business from Australia to a more global audience. A scheduled one-hour meeting turned into two and a half hours. Then they met again the following day.

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“You couldn’t not be impressed with what they had built in such a short period of time,” recalled Stalder, a partner at Matrix Partners. He picked up quickly that the business model would apply to other markets outside of Australia, and was confident that Molnar and Eisen were focused enough to see it through.

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Molnar “is so strategic without even realizing how strategic he is being,” Stalder added. “It’s just intuition. And I just thought, ‘I can’t imagine how good this guy is going to be at 40 if he’s this good at 27.’”

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The May edition of Strategy Insights—Tech innovations that stick—explores some of the technologies that have gained traction with retailers and proven to have major staying power with merchants, including headless commerce, pay-in-installments, artificial intelligence and video.

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The genesis of the deal was when Afterpay reached out to Square to discuss “Project Pocket,” according to people with knowledge of the matter. Talks followed Afterpay’s decision to appoint advisers in April for a potential U.S. listing and continued over video and phone calls, with key members of the deal teams meeting in Hawaii a couple of months ago, the people said, asking not to be identified as the discussions were private. It was at that meeting that the companies decided on the concept of an all-stock deal, they said.

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Eisen was a leading negotiator for Afterpay, codenamed “Avocado” while Square, nicknamed “Strawberry,” had Ahuja, and key executives Alyssa Henry and Brian Grassadonia in its corner. The companies had another common link: former U.S. Treasury Secretary Larry Summers, who joined the Afterpay advisory board in 2019, and had served as a director of Square since 2011.

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Molnar said the relationship between the companies was more than just business.

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“Amrita was actually one of the first people that I met when I moved to San Francisco,” he said in an interview, adding that his first conversation with Dorsey was about philanthropy. “So it was great to build relationships with the Square team as human beings firstly and then begin to have the business conversation.”

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After the deal is completed, Molnar and Eisen will help lead Afterpay’s merchant and consumer businesses as part of Square’s Seller and Cash App divisions.

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Spiraledge, No. 397 in the 2021 Digital Commerce 360 Top 1000, is a Top 1000 merchant that uses AfterPay for payment processing. Sailrite, No. 975, uses Square for payment processing.

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Afterpay was officially registered in November 2014 — the name thought up by Molnar’s aunt. The company launched in Australia the following year and in 2016 listed on the stock exchange at A$1. By 2017, it had amassed 1 million customers and spent the next three years entering new markets in the U.S, U.K. and Canada. As the pandemic took hold in March last year, the stock plunged more than 70%, before reversing course and surging to a record high early this year.

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Afterpay’s deal hasn’t just enriched its founders: Chinese tech giant Tencent Holdings Ltd., which paid about A$300 million for 5% of Afterpay in 2020, stands to make about A$1.7 billion. Other investors over the years include Woodson Capital and Tiger Global. The so-called Tiger Cubs, alumni of Julian Robertson who started their own firms, bought in after a 2019 meeting in New York, according to a new book on the company called “Buy Now, Pay Later, the extraordinary story of Afterpay,” by Jonathan Shapiro and James Eyers.

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Carnegie, the venture capitalist boss, said he can only rue the fact he didn’t become an early backer of the firm.

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Square deal vaults Afterpay founders to $1.8 billion fortunes

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