London-based buy now, pay later (BNPL) company Zilch has raised an additional $50m (£41.2m) in an extension to its Series C funding, bringing the total amount raised in the round to $160m.
“This extension is a great endorsement of our unique model as well as our investors’ belief in our ability to deliver on our mission to create the world’s most empowering way for people to pay for anything, anywhere,” said Zilch co-founder and CEO Philip Belamant.
The BNPL provider has now raised a total of more than $460m with a valuation of $2bn, despite concerns in the UK BNPL space.
The additional funding follows Zilch’s launch into the US market last month. Despite Zilch’s rapid growth, there are signs that the BNPL industry might face challenges in the UK with stricter regulations confirmed to be on the way.
The highly competitive sector has also been affected by the current market downturn. Europe’s largest provider of BNPL services, Klarna, has cut 10% of its workforce and is expected to drop in value from the current titanic figure of $45.6bn to something potentially as low as $15bn.
Zilch’s chief doesn’t feel his company will be hit in the same way as its BNPL rivals. In an interview with City A.M., he said that “checkout button businesses like Klarna” have got a “couple of problems”.
Belamant said: “The first is that there’s too much competition, right? So, it’s become a commodity and the problem with this is that everyone’s been undercutting one another to get the big deals in the markets. They’ve had a few years of killing their own revenue. And that’s a big problem.”
Zilch’s business model differs from the likes of Klarna, as it provides a card to customers that can be used to pay with debit or credit, which can then be split into instalments.
Klarna, meanwhile, splits up the cost of purchases directly at the checkout by making deals with retailers.
Zilch has also had a strong focus on expanding into the US market. Belamant spoke to the UKTN Podcast about this expansion in more detail last month.