Zip pulls buyout of rival amid tech rout

On Tuesday, however, the deal was off, with immediate effect, the companies said

Australian buy-now-pay-later firm Zip Co Ltd dumped a buyout of U.S. rival Sezzle Inc three weeks after declaring the deal on track, a sign of the abrupt pressure on unprofitable fintech firms brought by soaring inflation, Qazet.az reports.

Zip, which owns the Quadpay brand in the U.S., said the two firms agreed to pull the deal because of "current macroeconomic and market conditions", without elaborating.

The decision was "in the best interests of Zip and its shareholders, and will allow Zip to focus on its strategy and core business," it added.

In a June 22 trading update about a sell-off in tech stocks, Zip had said it was putting up fees and reviewing global operations outside the U.S., but that "the acquisition of Sezzle remains on track".

Zip had issued new shares to raise capital when it announced the Sezzle buyout, Chen said, adding, "This could cause some discontent amongst investors who participated."