Buy-now-pay-later service Laybuy has been placed into receivership.

Founder Gary Rohloff said the economic downturn had been more drawn-out than expected and had hurt the business.

"I am absolutely heartbroken at today's decision to request the appointment of receivers to the Laybuy Group," he said in a statement.

"This is a devastating time for the Laybuy team, and I will be doing everything I can to support them as we go through this process."

He said the business had been working "incredibly" hard to execute a plan to achieve profitability after years of rapid growth.

"While we have been making good progress over the last two years, the economic downturn has been longer than we expected, and this had had a significant impact on the retail sector in both New Zealand and the United Kingdom.

"As a result, we have see reduced consumer spending, higher credit losses, and increased fraudulent activity. This alongside increased financing costs created a perfect storm that was difficult to recover from."

He said the business had tried "everything" including an attempted sale, but this had fallen over at the last hurdle.

"This left the board with no option but to make the gut-wrenching decision to voluntarily request the appointment of Deloitte as receivers.

This is a difficult time for our team and I am devastated."

He said his priority was to work with receivers to ensure the best outcome for staff, creditors, suppliers and merchants

Customers could continue to make their payments as normal.

The company listed in the Australian stock exchange in 2020 and shares traded as high as A$2.30.

But they had dropped to A0.6c before a decision was made last year to delist.