According to Reuters, the American expansion caused Openpay's losses to increase by 65% in H1 2022, and the company had wanted an investor to help fund its US expansion.
Current economic and market conditions and ‘the likely ongoing capital investment required’ forced Openpay to stop extending loans and cut most of its US unit's staff, it said in a statement cited by Reuters.
BNPL market seeing the effects of the ongoing recession
OpenPay’s move to retreat from the US market adds to an ongoing downgrading within the BNPL global market.
Before Klarna announced 10% employee layoffs in May 2022, Sezzle, another Australia-listed BNPL company focused on the US cut a fifth of its workforce in America and announced recently it will exit the Indian market as well.
Moreover, Brighte, an unlisted Australian BNPL firm specialising in solar energy, told Reuters it cut 15% of staff this month, after cancelling plans to sell its own battery network.
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