Big news this quarter for Zilch as an up-and-coming Buy Now Pay Later (BNPL) solution in the UK. The fast-growing fintech startup opened up a second round of funding in April to support its goals for expanding to the US and throughout the UK beyond its current rate. A recent announcement of a deal with Goldman Sachs and DMG Ventures includes adding $110 million in debt and equity for Zilch.
This support takes the Series B funding to over $200 million within four months. The support from Goldman Sachs also shows the promise of Zilch, since the banking behemoth is known for only backing the very best in the industry.
Zilch offers a unique take within the BNPL industry, showing an extra concern for the customer and focusing on affordability over everything else. The company is the first to achieve consumer credit authorization from the FCA (Financial Conduct Authority), which was a hard-pressed victory in 2020 after increased regulatory scrutiny. It is currently the only UK BNPL firm that is fully licensed with the FCA.
The growth of Zilch has been impressive since its start in 2018, growing quarterly at over 120 percent.
Zilch currently boasts 700,000 users that are brought in only after careful vetting. The company wants to focus on members who can meet certain financial criteria, including a soft credit check and license check. This process helps protect Zilch, but it also helps protect users from getting in over their heads with debt. The goal of Zilch is to simplify payments and improve affordability, not increase debt.
The BNPL company allows users to spread out their payments for purchases over a six-week time period with bi-weekly payments. Spreading out purchases—big or small—empowers the customer with more flexibility regardless of when they get paid or when bigger expenses hit. While many struggle with payday restrictions in how they spend, Zilch opens the door and provides freedom from that schedule.
Interested users in the UK can sign up on the Zilch website to undergo the approval process.
Once approved, users will get a virtual MasterCard that can be used in thousands of stores. Zilch has committed to virtual cards to avoid the unnecessary PVC plastic that is typically thrown into the garbage every year from old cards. With the new convenient Tap & Pay feature, customers can use their card in-store for an instant, hassle-free BNPL experience.
The backing of Goldman Sachs further shows the unique positioning of Zilch in the BNPL market. In order to catch the eye of the asset management and private credit division of Goldman Sachs, the company needed to stand out. Goldman partnered with Apple in 2019 for ApplePay, and news has leaked that Apple plans to enter the BNPL instead of standard credit cards with the support of Goldman.
“As our customer numbers continue to grow, we’ve taken the decision to raise additional capital to service this phenomenal demand,” says Zilch CEO and Founder Philip Belamant. “We’re delighted that well-respected institutions, such as Goldman Sachs and DMG Ventures, share our vision of what credit should be in today’s world and how that can be delivered directly to customers in the most responsible way.”
The company has stated that the funding from Series B is going to help them enter the US market and continue to grow at a steady rate in the UK. The UK could see as much as 10 percent of online purchases use BNPL as the payment of choice by 2024, according to some experts’ speculation. When it comes to online purchases, the UK currently sits just behind the US and China. This means the move to the US would greatly increase Zilch’s audience reach, landing in two of the top three eCommerce markets.
As a customer-centric company, Zilch prides itself on having a personal connection with its users. The company has stated that it typically responds to customer inquiries within five business hours, often sooner. The setup for the BNPL fintech is designed to help users gain increased control over their finances and supports smarter credit with 0% interest rates.
Zilch only backs low-value discretionary purchases, helping users avoid over-borrowing and supporting regular cash flow freedom.
About Philip Belamant
As an expert in fintech, Philip Belamant created Zilch after a number of other successful fintech startups. His work has included over 16 years within the payments and technology industries. This included creating and launching the first Cash-to-Mastercard payment solution for UBER in South Africa.
He also helped launch mobile payment and value-added services in 15 African countries. As a leader in digital payment solutions, he was part of launching virtual card tech in Mexico, Africa, USA, India and Spain. He started PBEL, growing it to 5 million users and $100 million revenue before selling it to Net1 UEPS Technologies.
As a Buy Now Pay Later (BNPL) company, Zilch offers zero interest and no hidden fees to help spread out payments. The initial payment is set at just 25% of the full purchase, drawing an additional series of bi-weekly payments over the course of six weeks. The BETA version of Zilch was released in 2019, where it quickly became a popular solution as a fully functioning solution. Both Zilch and MasterCard are registered with the FCA and have to follow those standards.
The Zilch app currently has over 100,000 installs and is highly rated for its convenience. The methods of Zilch are so unique that a patent is currently pending on the model that requires no third-party integrations. Zilch offers instant payments for the vendor while spreading out the demand for the customer.