Salem Radio Network News Tuesday, August 9, 2022

Science

Australian BNPL Zip may take charges on US, Europe units, ‘deprioritise’ crypto offer

SYDNEY (Reuters) -Australian buy-now-pay-later company Zip Co Ltd said on Thursday it was weighing an impairment charge on its new U.S. and European businesses, exiting Singapore and “deprioritising” a cryptocurrency offering, citing challenging market conditions.

“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 a trading update.

“Zip is in the process of closing its Singapore business, consistent with the aim to reduce group cash burn. Previously planned new financial services products, including crypto … have been deprioritised,” it added.

Amid an explosion of online shopping that was fuelled by the shift to staying home during the COVID-19 pandemic, Zip embarked on an ambitious programme of takeovers since 2020 including Quadpay in the United States, Dubai-based Spotii and Czech Republic-based Twisto.

That also included an agreed buyout of U.S.-based, Sydney-listed rival Sezzle Inc, which Zip cancelled earlier this month.

The company had also said it was planning a service to enable customers to trade cryptocurrencies by mid-2022, a pitch to younger consumers who were seen as powering a rally in the digital assets during a period of lockdowns and working from home.

In a limited trading update on Thursday, Zip said revenue in the three months to June 30 rose 27% from the same period a year earlier, but that included an increase of 30% in Australia and New Zealand and an increase of just 12% in the United States.

Zip also said it was winding down its Zip Business unit, which sells unsecured loans to small businesses.

The company’s all-stock buyout of New York-based Quadpay in 2020 valued the company at $269 million at the time. Zip did not disclose the size of the potential impairment charges on Thursday. [urn:newsml:newsroom:20200602:nL4N2DF196:0]

(Reporting by Byron Kaye; Editing by Jacqueline Wong and Stephen Coates)

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