BNPL Firm Zip backs away from crypto lending
Buy-now-pay-later (BNPL) firm Zip says it is “down-prioritizing” a planned cryptocurrency financial services product, considering writing down some of its assets in Europe and the US
According to a quarterly report to investors released on Thursday (July 21), the Australian company said it would also suspend operations pending and wind down operations in Singapore, which CEO Larry Diamond put down to “significant and rapid changes in the broader macro and capital environment” .”
See also: Australia’s Zip to Allow Merchants to Accept Bitcoin Payments Adds Crypto Trading
Zip’s fortunes flourished thanks to a wave of pandemic-inspired shopping, expanding into the US in 2020 with the acquisition of Quadpay and the purchase of fellow BNPL companies Twisto Payments and Spotii Holdings in 2021.
Related: Australian BNPL Platform Zip to Shutter Money Management App Pocketbook
However, the company has since struggled – like many other BNPL players – and started winding down operations.
“Reflecting current market conditions, the company has reviewed the goodwill against the Spotii, Twisto and Quadpay assets and is assessing the need to take an impairment charge,” the company said in its report.
On July 12, PYMNTS reported that Zip abandoned its attempts to acquire rival BNPL supplier Sezzle. Zip said the two companies had agreed to withdraw from the deal due to “current macroeconomic and market conditions.
Diamond said in the investor letter that the decision not to acquire Sezzle, “combined with recent decisions taken as well as ongoing strategic initiatives, will see the group achieve cash EBTDA profitability earlier than expected.”
Read more: Zip Abandons Plans to Buy BNPL Rival Sezzle
Zip also recently announced the shutdown of its money management app Pocketbook due to “significant changes” the company is facing.
“Zip’s operating environment has changed significantly in recent months, and as a result, we have adjusted our strategy accordingly to accelerate our path to global profitability,” Zip Chief Product Officer Travis Tyler said earlier this month.
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