“We believe that mutually terminating the merger agreement with Sezzle at this time is in the best interests of Zip and its shareholders, and will allow Zip to focus on its strategy and core business in the current environment,” she said.
Zip said on Tuesday that it remained focused on its strategic plan, and was moving towards profitability.
“Zip is well capitalised to execute on its strategy and in line with previous guidance, Zip continues to expect to deliver group profitability during full-year 2024,” the company said.
Sezzle chief executive Charlie Youakim said his group was also dedicated to moving toward profitability and free cash flow as it was the best outcome for shareholders.
“While we were excited by the potential of this transaction, our board and management team are laser-focused on our strategy and execution,” Youakim said.
Sweden-headquartered Klarna was also sounding positive about the future having raised $US800 million, albeit at a much lower price than in previous raisings.
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“It’s a testament to the strength of Klarna’s business that, during the steepest drop in global stock markets in over fifty years, investors recognised our strong position and continued progress in revolutionising the retail banking industry,” Klarna chief Sebastian Siemiatkowski said.
A Commonwealth Bank spokesman confirmed the bank had participated in the capital raising by Klarna overnight to maintain its stake.
“Since our initial investment in 2019, Klarna has almost trebled its global revenue, customer base and transaction volumes and now generates $US1 billion in gross profit from its established European markets,” the spokesman said.
“We also remain firmly committed to our partnership in Australia and New Zealand,” he added.
“The change in Klarna’s valuation will be reflected in CBA’s end-of-year accounts, and will have no impact on the bank’s income, profit or capital position.”
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