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Zip Claims They Are Not Pulling Out Of US Market

Zip has denied claims that they are set to quit the U.S. market.

The rumour floated by the Australian newspaper saw the financial operation, whose systems used by local retailers, stamp out the claims quickly, telling ChannelNews that the rumour was “100% incorrect”.

A Zip Co spokesperson said: “As we have consistently communicated to the market, we have a clear strategy focusing on two core markets – Australia and New Zealand (ANZ) and the US. Zip remains firmly committed to the US as one of its two core markets,” they said.

The Company that delivers flexible and interest-free credit, recently appointed former Barclays Australia and New Zealand executive Cynthia Scott as CEO.

According to the company, the U.S. continues to be a primary piece of its strategy despite already retreating from other global markets, according to the Australian.

Beforehand, Zip Co had been aiming to grow into global markets of at least 14 countries.

With new industry regulations, the business is claimed to be struggling and has yet to become profitable.

Earlier this month, Zip Co-founder Larry Diamond “relocated to the U.S. in October 2022 to lead the Zip business in North America, and will now exclusively focus on this region,” shared the Zip spokesperson.

Recently, however, DataRoom reported that some industry insiders feel Zip Co’s future success lies in leaving global markets and, instead, concentrating on the local markets.

Zip Co has shown recent revenue growth but most of it looks to be tied to selling its businesses.

The pay later company registered a quarterly revenue had grown 21.1% year on year to $193.8 million, including selling its businesses, Twisto, Spotii, and Payflex which bumped up its cash and liquidity to $57.3 million.

Other signs of trouble include Zip Co eliminating jobs and the rate of customers decreasing by 5.9% in the U.S., year on year, while U.S. retailers increased 9.7% in contrast to 11.9% in Australia and New Zealand.

This week Zip’s stock did not fare much better and closed 4% down with a market value is $296 million adding to its $241 million statutory loss for the six months to December.

According to the Zip spokesperson, the financials are solid: “As per Zip’s Q4 FY23 results, Zip US continued its solid momentum and exited FY23 cash EBTDA positive on a monthly basis, providing a strong platform for growth in FY24. We look forward to providing a further update at our FY23 Results on 29 August.”

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