Zip Set to Exit the UK Following Losing USD 701.3M

Australia-based BNPL provider Zip has chosen to exit the UK in the wake of s USD 701.3 million loss.

The company said net loss for the 12 months through June widened from a restated USD 485.3 million loss in fiscal 2021. Zip recorded a non-cash impairment of goodwill and intangibles of USD 571.4 million.

Zip had bet big on expansion in the US and elsewhere but the strategy came to an abrupt stop this year against a backdrop of rising rates, soaring inflation, worsening consumer sentiment, and global macro uncertainty. The BNPL provider, which had already announced it would simplify its product range and exit Singapore, said on Thursday it would quit the UK.

Zip will focus on the US, Australian, and New Zealand as it seeks to reduce its cash burn. It said its domestic business proved that strong unit economics at scale would convert to profitability and is still reviewing its other global businesses.

Zip said 48% of its total USD 5.97 billion in transactions came from the US, where it had 56% of its 11.4 million customers at the end of FY 2022. Total customer numbers grew 56% on-year, while merchant numbers grew 77% to 90,700.

The decision to exit from the UK comes a month after Zip terminated its acquisition of Buy Now, Pay Later rival Sezzle in a USD 491 million all-scrip merger.

(Source: The Paypers)