Australian buy now, pay later firm Zip, is closing Pocketbook, the money management app it bought for A$7.5 million in 2016, in order to focus on a core business facing up to a faltering economy.
Founded in 2012, the Pocketbook app claims to have more than 800,000 users but will close down on 5 August.
Zip chief product officer Travis Tyler tells News.com.au: “Zip’s operating environment has changed significantly in the last few months and as a result we have adapted our strategy accordingly in order to accelerate our path to global profitability.
“With this in mind, Zip has decided to close the Pocketbook app in order to reprioritise resources and focus on delivering sustainable profitability in our core ANZ market.”
Like others in the BNPL sector, Zip is having to adjust in the face of a faltering economy and rising interest rates.
The firm's share price has fallen from A$14.53 last May to 50 cents today. Earlier this year it agreed to buy US rival Sezzle for A$491 million. However, Sezzle has also seen its share price crater, leading to speculation that the deal could fall through.
Sezzle has also slashed its workforce this year as has Swedish giant Klarna, which yesterday saw its value nosedive from $46 billion to just $6.7 billion off the back of an $800 million funding round.