Buy Now Pay Later Firm Zip Takes a U-Turn on Crypto, Exits Singapore
Australian buy-now-pay-later company Zip Co Ltd. revealed its fourth quarter financial results on Thursday, unveiling its withdrawal from Singapore while ‘deprioritizing’ cryptocurrency offerings.
The news comes after the platform had stated back in July 2021 that it is mulling crypto trading options for faster growth in the BNPL segment. Late last month, Zip announced that it will allow Bitcoin payments for its US customers.
‘Deprioritizing’ crypto offerings
Reuters reported that the company aims to get back in the black by withdrawing from Singapore and halting business lending due to “significant and swift changes to the broader macro and capital environment”.
Zip C- founder Larry Diamond said, “In line with its strategic objective to focus on the core markets of ANZ and the US, this quarter Zip has continued to make changes and decisions to right-size its global footprint and reduce group cash burn.”
With the company’s focus shifting on core assets, Zip said it will shut its Zip Business unit and withdraw from Singapore by September-end.
The media outlet noted UBS analyst Tom Beadle stating that “Credit risks remain elevated,” for Zip. And with crypto uncertainty weighing heavily on platforms like Celsius and Vauld, many have welcomed Zip’s decision.
Recently, the platform also abandoned its merger with rival Sezzle.
Market downturn could weigh on credit risk
Chris Tynan DNR Capital investment analyst pointed out to AFR that massive cuts to Zip’s operating expenses and withdrawal from non-core businesses that “clearly have negative equity values,” will be “interesting to watch…”
Crypto business would essentially contribute to the firm’s non-core vertical.
Notably, despite the global cryptocurrency market cap topping $1 trillion cumulatively after weeks of a downward spiral, Bitcoin remains 67% down from its all-time high point that was touched in November last year, as per CoinGecko.
Meanwhile, in the latest rounds of layoffs, Blockchain.com has joined the bandwagon by reportedly laying off 25% of its staff as market uncertainty persists for several exchanges. Be[In]Crypto quoted recent reports that revealed that Gemini has also laid off an additional 7% of its employees, reducing the number of employees in the company to 800.
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