Australian ‘buy now, pay later’ lender Zip seeks UK exit

An Australian-based ‘buy now, pay later’ credit provider is exploring an exit from its British operations little more than a year after launch.

Sky News has learnt that Zip Co, which is listed in Sydney, has begun sounding out potential buyers of its UK business.

It was unclear on Thursday whether Zip was considering closing down the unit if a buyer could not be found.

The company declined to comment on its deliberations or on the number of customers it had acquired since launching in the UK in March last year.

Its decision to explore an exit from the UK comes amid a steep downturn in the broader ‘buy now, pay later’ sector.

On Monday, Klarna, the giant Swedish-based company, confirmed a Sky News report that it had raised $800m at a post-money valuation of $6.7bn – down from over $45bn two years ago.

The arrival of tech behemoths including Apple into the industry has alarmed investors in independent rivals, while tech companies more broadly are seeing valuations tumble.

Zip this week abandoned a merger with Sezzle, a US competitor, a move that cost the Sydney-listed company $11m in the form of a termination fee.

It was also reported in the last few days that Zip had decided to close Pocketbook, a money management app.

Zip also has a presence in countries including India, Mexico and Saudi Arabia.