SYDNEY (Reuters) -Australian buy-now-pay-later company Zip Co Ltd said it was weighing an impairment charge on its newly acquired U.S. and European businesses and "deprioritising" a cryptocurrency offering, a blow to the sector's once formidable growth prospects.
The company which saw its stock soar during a COVID-19 online shopping frenzy, only to slump this year, also said it was exiting Singapore and stopping business lending due to "significant and swift changes to the broader macro and capital environment".
The update reflects a deteriorating outlook for BNPL operators which have seen valuations collapse as inflation pushes up interest rates, squeezing consumption. This month, a capital raising by Sweden's Klarna valued it at $6.7 billion, from $46 billion in 2021.
For Zip, Australia's second-largest BNPL behind Block Inc's Afterpay, the pandemic boom spurred several acquisitions including New York-based Quadpay, valuing the company at $269 million.
Zip then bought Dubai-based...
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