SYDNEY, Australia–Indicative of how quickly the market has changed, Australia-based buy-now-pay-later (BNPL) firm Zip Co. said it is cancelling its planned buyout of its U.S.-based rival, Sezzle.
As recently as three weeks ago, Zip had indicated the deal was still on, but as Reuters noted in its analysis, the cancelled deal is a “sign of the abrupt pressure on unprofitable fintech firms brought by soaring inflation.”
According to Reuters, Zip, which owns the Quadpay brand in the U.S., said the two companies agreed to nix the deal due to "current macroeconomic and market conditions.”
In a statement, Executive Chairman Charlie Youakim, the company’s biggest shareholder, said Sezzle remains "dedicated to driving toward profitability and free cashflow. (We) believe this is the best outcome for our shareholders."
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