SYDNEY (Reuters) -Australian buy-now-pay-later firm Zip Co Ltd mentioned on Thursday it was weighing an impairment cost on its new U.S. and European companies, exiting Singapore and “deprioritising” a cryptocurrency providing, citing difficult market situations.
“Reflecting present market situations, the corporate has reviewed the goodwill in opposition to the Spotii, Twisto and Quadpay belongings and is assessing the necessity to take an impairment cost,” the corporate mentioned in a buying and selling replace.
“Zip is within the technique of closing its Singapore enterprise, in keeping with the goal to cut back group money burn. Beforehand deliberate new monetary providers merchandise, together with crypto … have been deprioritised,” it added.
Amid an explosion of on-line purchasing that was fuelled by the shift to staying dwelling throughout the COVID-19 pandemic, Zip launched into an bold programme of takeovers since 2020 together with Quadpay in the US, Dubai-based Spotii and Czech Republic-based Twisto.
That additionally included an agreed buyout of U.S.-based, Sydney-listed rival Sezzle Inc, which Zip cancelled earlier this month.
The corporate had additionally mentioned it was planning a service to allow prospects to commerce cryptocurrencies by mid-2022, a pitch to youthful customers who had been seen as powering a rally within the digital belongings throughout a interval of lockdowns and dealing from dwelling.
In a restricted buying and selling replace on Thursday, Zip mentioned income within the three months to June 30 rose 27% from the identical interval a yr earlier, however that included a rise of 30% in Australia and New Zealand and a rise of simply 12% in the US.
Zip additionally mentioned it was winding down its Zip Enterprise unit, which sells unsecured loans to small companies.
The corporate’s all-stock buyout of New York-based Quadpay in 2020 valued the corporate at $269 million on the time. Zip didn’t disclose the scale of the potential impairment costs on Thursday. [urn:newsml:newsroom:20200602:nL4N2DF196:0]
(Reporting by Byron Kaye; Modifying by Jacqueline Wong and Stephen Coates)
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