Zip, an Australian buy-now-pay-later (BNPL) firm, has backed out of a proposal to acquire American rival Sezzle three weeks after saying it the deal was still on track. The busted deal is another casualty of the strain that rising inflation is putting on struggling fintech companies. Zip, which is the U.S. owner of the Quadpay brand, stated that the two companies decided to back out of the arrangement due to “current macroeconomic and market conditions”. When Zip first announced the Sezzle deal, it had already issued additional shares to raise capital. The Sydney-listed company stated that Sezzle was valued at around A$491 million (US$330 million) based on Zip’s share price when they announced the all-stock purchase in February. Sezzle’s stock fell 34% after the announcement of the deal cancellation was released.
Australian BNPL Star Zip Pulls Buyout of Rival Amid Tech Rout