The fintech firm, which informed merchants of its decision on Wednesday, has requested all its merchants to deactivate the service from their respective websites at the earliest.
ET has reviewed Sezzle’s notice to its merchants.
“We will no longer be able to provide Sezzle services to you…from the closure effective date,” it said in the notice.
However, as part of providing after-services, Sezzle told clients that it would continue to provide shopper support and merchant support until May 9.
“There would be no impact on refunds/returns transactions which will be processed as in the normal course of business,” the notice read.
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Sezzle did not respond to ET’s queries on its India exit plan.
In February, Australian BNPL firm Zip signed a definitive agreement to acquire Sezzle, valuing it at around $491 million.
The deal is expected to close by the end of October. Zip is also an investor in Indian BNPL startup ZestMoney.
According to its website, Sezzle has partnered with more than 1,000 brands in India, including the likes of Titan, Fastrack, and Plum. It was working closely with direct-to-consumer (D2C) brands.
The move to shut its local business is surprising as Sezzle had ambitious plans for India. The company’s country head for India, Vandhan Parkavi, had told ET in November that it planned to add more merchants to its platform.
ETtechSezzle entered the country in August 2020 to tap into the less-penetrated market in terms of BNPL services.
Last month, Sezzle also announced that it would cut its North American workforce by 20%. It said it would position the business for long-term growth while establishing a path toward profitability and free cash flow.
At the time, the company’s chief executive, Charlie Youakim, said following the workforce reduction, Sezzle would reportedly save around $10 million in annual run-rate costs such as salaries and benefits.
Global consolidation
ETtech
Across the world, consolidation is under way in the BNPL space.
Late last year, PayPal bought Japan’s Paidy, while Square bought Afterpay in mega deals. Australia, a crowded market for BNPL firms, is expected to see mergers and acquisitions happening throughout this year.
“Australia’s $900 million BNPL sector will likely see more M&A activity in 2022 as players consolidate to survive rising interest rates and intensifying competition,” ratings firm S&P said in a recent report. “Also, the explosive revenue growth of the sector in recent years has attracted investments from global companies such as PayPal Holdings Inc and Apple Inc, which will likely crowd out smaller players,” it added.
Sezzle’s India exit follows Singapore-based ecommerce firm Shopee’s abrupt exit from the India market late last month.
