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Zilch, Klarna rival from UK raises $80M to take on US market

Image credits: Zilch

Buy Now Pay Later or BNPL is one of the fastest growing online payments methods in the UK. Companies in this space include some notable names, one of which is the London-based BNPL startup Zilch. The company is one of the fastest-growing BNPL providers in the UK, with thousands of signups a day. It is also the first and only UK FCA regulated BNPL, and it has now raised a notable £57.8 million in its series B funding round. 

USA launch and team expansion

The latest series B funding round for Zilch was led by numerous investors, including Gauss Ventures and M&F Fund. Including the latest funds, the company has managed to raise over £86.7 million in funds and is currently valued at over £361.4. With fresh funds, the startup intends to launch its services in the USA and grow its services further, in the UK. 

Zilch currently has over 80 employees in the UK and plans to double its team size this year. It recently hired some top executives such as Werner Kruger, ex VP of Data Science at Klarna, Monese’s ex-Chief Analytics Officer as their new Chief Data Officer and more recently, Amabel Polglase, ex-Head of Global Clients at Facebook, as Zilch’s Chief Marketing Officer.

“Some of these new hires will be used to build a US presence in anticipation of expansion. With this in mind, at the moment we’re focused on finding the right people that can help us achieve our goals, rather than limiting ourselves to a particular US location – remote working technology means that isn’t a problem anymore,” Belamant notes. 

Rapid growth

Zilch takes pride in being the first over-the-top (OTT) BNPL product in the UK which enables its customers to shop wherever MasterCard is accepted. It also enables them to spread their payment over 6 weeks for zero interest and zero fees. The startups’ user base is said to also have grown rapidly as it now approaches half a million users with continued revenue growth during the pandemic.

Belamant says, “They are coming to us as they’re the most wary of traditional lending options and credit cards. We have definitely seen an increase in the need for a responsible and affordable alternative type of credit during the pandemic as we all evaluate our financial wellness.”

Zilch is also the only UK BNPL company to be fully FCA licensed. “I built the company with customer affordability at the forefront. This entailed working towards achieving FCA regulation since our conception. Part of this saw us working with the FCA for over 12 months, using the innovative Sandbox programme to achieve part and full compliance levels,” Belamant notes. The startup also employs open banking solutions to build a personalised profile, which helps extend the company’s services to more users.

A blooming startup

Zilch was founded last year by the company’s CEO Philip Belamant and has shown remarkable growth in a short time. “Before starting Zilch, I founded, developed, and sold a variety of other fintech ventures in 15 countries across India, Africa and Europe, reaching more than 20 million users. This included launching South Africa’s first Cash-To-Mastercard system for Uber and founding a Top 40 fintech company. I’ve now funnelled 16 years of my experience in the payments and technology space, into building Zilch,” Belamant notes. 

When Belamant moved to the UK, he noted multiple Point of Sale finance options that were free for the customer, which are called BNPL today. “What I realised was this is a form of financial inclusion, which is great. However, the problem was the fragmented checkout journey,”Belamant says. 

“With multiple proprietary providers in the market with multiple options, they integrated with different merchants. It was confusing as you could use one provider at a site and then another at a different store. This results in complicated payment timelines that can and will lead to debt.” 

He then envisioned a solution for this problem with Zilch, which is aimed at consolidating this fragmented space.