In turning away from the merger, Zip said it’s resetting its focus on becoming profitable. Like most BNPL players, Zip hasn’t turned a profit. It reported 7.3 million customers yielding $5.8 billion in total transaction value for about 51,000 merchants in its annual report last year.

“Zip remains firmly focused on its strategic plan and accelerating its path to profitability,” the company’s statement said. “Zip is well capitalised to execute on its strategy and in line with previous guidance, Zip continues to expect to deliver group profitability during FY24.”

The company also sought to reassure investors, saying that its “underlying business remains strong with consistent customer and transaction volume growth across core markets, and a solid pipeline of enterprise merchants joining the platform.”

For its part, Sezzle CEO Charlie Youakim said this in a statement from a spokesperson: “Sezzle remains dedicated to driving toward profitability and free cashflow. We believe this is the best outcome for our shareholders."

In a January interview, Youakim had talked about how a significant portion of his company’s BNPL transactions are coming from outside the U.S., suggesting international expansion was part of the company’s strategy.

While the BNPL market is still young, consolidation has increasingly tilted the market toward larger competitors. For instance, Square parent Block last year purchased the Australian BNPL player Afterpay for $29 billion.

The acquisition would not have been Zip’s first purchase in the U.S. In 2020, the Sydney-based player acquired the U.S. BNPL company QuadPay for nearly $300 million.

By Lynne Marek on July 12, 2022
Original link