The UK fintech start-up, which competes with Klarna, is planning to enter the US market and invest in further product development.
Zilch, a ‘buy now, pay later’ start-up, has raised $80m in a fresh round of funding to expand in Europe and into the US.
The London-based fintech start-up allows people to break up payments for purchases, using a Mastercard-issued card, over six weeks. It uses open banking to link up its services with a customer’s bank account for credit checks.
The funding round includes backers such as Gauss Ventures and M&F Fund, bringing the start-up’s total funding to date $120m. According to the company, it is now valued at more than $500m.
The buy now, pay later (BNPL) space has been popularised by Klarna, Europe’s largest private fintech company, but Zilch was one of the first companies in the BNPL industry to be regulated by the UK’s Financial Conduct Authority (FCA).
It worked with the FCA for a year on its product and eventually secured a consumer credit authorisation in 2020 from the regulator.
Watchdogs in the UK have since then started cracking down on BNPL with plans to introduce stricter controls on the market, especially for those focused on lending-type services.
With its new funding, Zilch has eyes on entering the US market next and plans to hire 100 new people in the coming months. It also wants to double down on its native market in the UK where there is still much market share to claim.
The company recently hired a number of high-profile people from Klarna, Monese and Facebook for senior roles at Zilch.
“This funding is a demonstration of the confidence and strength of Zilch’s mission and products,” Philip Belamant, chief executive of the start-up, said. “By putting the customer first and building direct relationships with each of them, we are doing something no one else in the industry has done before. Zilch is far more than a BNPL company.”
He added that there are further country launches in the plans as it looks to roll out more product features. It recently launched ‘tap and pay-over-time’, a feature that integrates its staggered payments model with Google Pay and Apple Pay.