Zilch Adds $50 Million to Latest Funding Round
Despite some reversals of fortune in FinTech as of late, a growing U.K.-based firm has announced an additional investment. Recently, Zilch announced that it had extended its round with an additional $50 million in funding. The added funds bring their Series C to a total of $160 million, while the company has now raised $460 million in equity and debt to date.
The extended funding round comes on the heels of Zilch launching its “BNPL 2.0” platform in the United States. Using the app, customers can utilize a “pay-in-4” option with no interest or can choose to pay in full and earn up to 2% in cashback and rewards. According to the company, the app’s growth stateside is four times what was previously seen in the United Kingdom. In turn, the startup intends to utilize its newly-gained capital to further growth in the U.S. On that note, Zilch recently opened an office in Miami.
Commenting on the appeal of Zilch for consumers, the company’s co-founder and CEO Philip Belamant said, “In a world of rising interest rates and inflation, it has never been more important for customers to have access to a payment product that they can depend on for savings, deals and cash flow management with no interest or late fees of any kind.” Belamant continued, “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 worldʼs most empowering way for people to pay for anything, anywhere.”
Additionally, co-founder Sean OʼConnor noted what investors say in the firm, saying, “Since we founded Zilch and began raising capital, the markets have been difficult to predict given COVID and now the downturn the markets are currently seeing. We believe our focus on alignment with the consumer, delivered by our innovative business model, has the potential to create significant long-term value for shareholders.”
Notably, this news comes as the BNPL sector has seen some upheaval. Last month, Apple officially announced its Apple Pay Later service, which will enable customers to finance purchases using the same “pay-in-4” model other platforms have popularized. Meanwhile, according to reports, BNPL service Klarna is looking to raise new funding at a valuation of just $6.5 billion despite being valued at more than $45 billion just a year ago.
Overall, while the extended Series C is certainly good news for Zilch, the company — like the rest of the sector — does seem to be facing some headwinds at the moment. As a result, startups may need to begin pivoting away from the basic BNPL model and finding other ways to attract users. On that note, Zilch’s cashback/rewards option for those who pay in full may serve them well in terms of differentiation. Still, with Apple moving into the space and regulatory concerns abounding, it will be very interesting to see what becomes of Zilch and its competitors going forward.