Openpay (ASX:OPY) has decided to pause its existing US operations indefinitely and cease loan originations on the Opy USA platform, meaning its US workforce will be materially reduced.
The buy now, pay later company said that the decision was based on the current macroeconomic and public market conditions, together with the likely ongoing capital investment required in the US to fund its progress for an extended period.
Openpay had appointed the US investment bank Keefe, Bruyette & Woods as corporate advisors to assist with the search for potential investors. However, Openpay’s decision will result in no further investment in its existing US operations in the near term, subject to one-off costs associated with the restructuring.
Openpay said that it believes the available capital and funding are best allocated to the Australian business given its continued strong growth, market-leading margins and unique market positioning
“This decision to shift our approach in the US was not taken lightly but will now allow even greater focus on Openpay’s Australian business which continues to perform strongly in terms of growth (TTV, revenue, active plans, customers, merchants, etc) and metrics (gross margin, NTM, loss and arrears rates etc) as highlighted in our May Trading Update,” said Australia chief executive officer Dion Appel.
“This will also allow further focus on the capital light OpyPro B2B business as it continues to move into a significant ramp-up phase. We remain incredibly proud of what Openpay and its dedicated team have achieved in the US since December 2021, and the Company will continue to look to leverage and monetise its investment in the US and the UK markets in the future.”
Shares are trading 16.7 per cent higher at 14 cents.