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UK buy now, pay later start-up Zilch raises funds for U.S. expansion


One person who uses the Zilch App.

Zilch

LONDON — British start-up Zilch is riding the “buy now, pay later” wave to America.

The London-based company said Wednesday it has raised $110 million in a fresh round of funding which values it at $2 billion — four times the $500 million Zilch was worth in its last private investment round eight months ago.

Ventura Capital led the investment. A pre-IPO investor who has previously backed Ventura Capital. AlibabaAnd SpotifyGauss Ventures is an investor in London’s fintech company Curve.

Zilch will use the cash for a launch in the United States. The company has opened a Miami office with approximately 10 people working in the U.S. expansion.

Services like BNPL or Buy Now, Pay Later have attracted a lot of customers. swelling demandThere was an explosion in ecommerce after the pandemic coronavirus. This product allows shoppers to spread the cost of their purchases over many months. Often, it is interest-free.

BNPL accounted for 2.1% of all global e-commerce transactions — about $97 billion — in 2020, according to Worldpay data.

Zilch hopes its approach to BNPL can help it stand apart from the rest. Rivals like Klarna, AfterpayAnd AffirmYou can add their checkout option to select retail websites. Zilch on the other side allows customers to make payments at any merchant who accepts it. Mastercard

Zilch’s founder Philip Belamant and CEO of Zilch, stated that Zilch chose to go this route because all BNPL firms “look the exact same.”

He said, “I don’t think they are bad business but they’re copycats.” “We believed that you couldn’t arrive late and do the exact same thing.

“We are actually using the entrenchedness of incumbents against them.” We are going directly to consumers by saying, “You can buy now and then pay later any place you choose.”

However, the company’s business model is very similar to its competitors. Zilch gets a cut of every transaction through its platform from merchants.

It is believed that these fees are paid by retailers to increase their long-term sales.

Wild Growth

Belamant stated that his company has seen tremendous growth since March’s previous funding round.

He said that the company was eight times its size. For the year, it has been 30-35% month-on-month underlying growth in sales.

Zilch reports that it currently has more than 1.2million customers. It also adds 200,000 new users every month. The firm has over 210 employees — up from just 20 in March — and aims to hire another 100 workers in the next 12 months.

This growth will be examined by regulators in the future to see if it is possible for the government to stop the expansion. The government in the U.K. is introducing new legislationTo place BNPL in regulatory control.

Belamant declared, “It should not be regulated.” In 2019, Zilch was issued a license for consumer credit by the U.K. Financial Conduct Authority. The site also has a “pay immediately” option, which allows users to pay full price for their items. Klarna has recently introduced a similar featureThe U.K.

“BNPL, at the end of it all, is a debt instrument. Zilch, Zilch’s founder stated that BNPL is a debt instrument.

Start-ups are also supported by Goldman SachsVenture capital and other venture capital arms of Daily Mail and General TrustThe Daily Mail newspaper is owned by. To date, it has raised $340 million through both debt and equity financing.

This war chest of money will help Zilch get a foothold on the U.S. Market, where Klarna, Afterpay, and Affirm are the dominant players.

Belamant stated that “we do have to give thanks for these other guys spending millions on educating our customers.” Six years ago, Klarna attempted to visit the U.S. but that didn’t go so well. The timing of the trip was also probably incorrect, I believe.”

We’ve been asked by many investors and shareholders if we do a product market fit test in the U.S.

Consolidation is also evident in the BNPL marketplace. American fintech titan SquarePayPal has purchased Japanese firm Paidy, worth $2.7 Billion. Afterpay was bought for $29B earlier in the year.

Zilch is not the only company benefiting from the BNPL surge. Other European fintech firms include Billie, a German fintech company that raised $100 million for a valuation of $640 million. Scalapay, an Italian company that acquired $155 million from a round valued at $700 million, was valued at $155 million.

Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.