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BNPL killing it: London’s Zilch becomes the fastest fintech double unicorn in Europe


In the United Kingdom, Buy Now Pay Later (BNPL) is creating enormous waves. Consumer expectations have evolved away from traditional lending and payment solutions, favouring low-cost or free options with intuitive digital experiences. The BNPL concept has matured into an embedded digital payment and lending product that is in high demand and popular among both customers and merchants.

A new survey revealed that after taking feedback from 2,000 UK online buyers, it has been found that there has been widespread use of BNPL services which further indicates long-term shifts in consumer behaviour.  In the UK, the value of BNPL transactions reached £6.4B in 2020, up 60-70 percent from the previous year.

Let’s decode what is Buy Now Pay Later first. BNPL is a type of financing that allows customers to buy something immediately and pay for it later in three or more instalments during an interest-free period. On behalf of the buyer, the BNPL provider settles the amount with the merchant in full. This option is aimed at young, cash-strapped millennials who are new to credit and don’t have credit cards. It allows them to obtain credit quickly for small-ticket transactions.

Zilch: reshape the BNPL industry

Buy now, pay later (BNPL) solutions like Klarna and Clearpay are some of key players in the UK who are making strides in the BNPL market. However, a London-based fintech startup Zilch has diverse goals and intends to reshape the BNPL industry by putting the consumer first, especially as COVID-19 continues to affect everyone.

This fintech startup has now secured a $110M(£81.2M) Series C investment round, reaching a valuation of more than $2B(£1.4B) and has become the fastest startup to attain unicorn status in 14 months. Ventura Capital and Gauss Ventures led the round and it also included a slew of other investors such as Goldman Sachs which is one of the existing investors. This investment follows Zilch’s Series A capital round in September 2020.

Last year, Zilch became the first company in the industry to be completely approved by the Financial Conduct Authority (FCA), and the process also happened smoothly.

Zilch claims to have achieved  8X times growth since its last funding in March 2021 and its customers have exceeded from 0 to 1 million in just 13 months.

Philip Belamant, Founder and CEO, said, “It’s really been phenomenal to watch customers adopt our product at such significant speed. Our entire 200+ team is truly humbled and grateful for the opportunity to serve millions of customers daily and rest assured we are all working around the clock to delight them. We have been fortunate to experience such phenomenal growth over the last 14 months and today we are celebrating becoming one of Europe’s fastest unicorns.”

Zilch intends to use the new funds to expand into the United States. It has already established a Miami office with roughly ten workers focused on its US expansion.

Business Model

The fintech claims that its over-the-top, direct-to-consumer approach of the scale-up enables them to create direct relationships with its consumers and scale quickly, thanks to a deployment strategy that is not limited by borders and is merchant agnostic. The UK-based company accepts both debit and credit card transactions on its platform. This is the USP of the company that differentiates itself from other competitors.

Customers can use Zilch in any UK online store – ASOS, Boohoo, Amazon, and so on. Instead of having to balance numerous payment timeframes for different BNPL providers, this simplifies the lending process for users.

Further, it has introduced a new debit feature,  which leverages Open Banking technology to inform customers about their payment possibilities based on their real-time financial data, proactively informing them if a purchase decision would have a negative impact at a later date.

Founded in 2020, Zilch is an over-the-top (OTT) BNPL service provider that lets its clients purchase anywhere Mastercard is accepted and spreads their payment over 6 weeks for zero interest and zero fees whenever they buy from one of Zilch’s retail affiliate partners.

In 2021, the company claims that its headcount has increased by more than tenfold, with 210 employees spread among locations in London, Miami, and Krakow. Following the acquisition of US loan startup NepFin, Zilch plans to hire an additional 150+ workers in the United States in the coming 12-18 months.

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