London-based fintech double unicorn Zilch has extended its Series C by €47.9 million. Offering a pioneering Buy Now Pay Later platform, the startup has been growing at an incredible pace and leading new approaches to payments across the continent.
Payment processes are undergoing a major shift at the moment. One of the biggest innovations shaping the market is of course the BNPL option. Pioneering the space with its next-generation payment platform, Zilch, is one of Europe’s fastest-growing fintechs and has just secured an additional boost of €49.7 million. The double unicorn – or duocorn as we like to say – has now reached more than €153 million in its Series C funding.
Zilch today has an impressive list of global investors, which includes Ventura Capital, Goldman Sachs Asset Management, Gauss Ventures, DMG Ventures, M&F Fund and Limited Ventures.
Founded in 2018, and launched in September 2020 by Philip Belamant and Sean O’Connor, Zilch is undoubtedly one of Europe’s hottest fintech startups. The company went from Series A to unicorn in just 14 months as it redefined the BNPL segment. Its unique platform utilises Open Banking Technology whereby they only lend a user what they can afford to pay back, preventing problematic debt. It’s using technology to improve financial health for users – a refreshing approach for the sector.
Operating with a D2C model, the startup is able to build direct relationships with customers – a key part of its success story. CEO Philip joined us at the 2022 edition of the EU-Startups Summit, where he was able to share insights into this remarkable growth story.
Philip explained: “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. Open Banking data shows how customers of all ages are migrating away from traditional high-cost credit cards or overdrafts in favour of services like Zilch – saving them millions. 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.”
In the last six months, Zilch has leveraged its innovative, direct-to-consumer approach to double underlying sales and revenue. Customers can pay on debit (with up to 2% instant cashback and rewards) or credit (pay-in-4) for no interest or late fees, anywhere. This differentiated model has seen Zilch achieve higher utilisation than any other peer in the space – showing just how important it is to engage with and understand consumers.
This fresh funding, which comes off the back of picking up €95 million in November 2021, is also rooted in a context of increased regulation in the BNPL segment. The UK government recently set out a new framework for the Financial Conduct Authority (FCA) to review the sector. Zilch actually worked alongside the FCA as part of the Sandbox Programme – becoming one of the first BNPL providers in the UK to be granted an FCA licence to perform regulated Consumer Credit activities.
But that’s not all. This year, Zilch has also partnered with Experian (leading credit reporting agency), to pioneer reciprocal reporting of payment plans to the credit reporting agency’s (CRA’s) data set. This ensures consumers’ financial health by providing greater transparency and accuracy while rewarding customers for their responsible behaviour.
Alongside this, Zilch already utilises a blend of Open Banking technology combined with soft credit checks and its own proprietary behavioural data each time a customer spends. This allows Zilch to develop a real-time view of a customer’s financial health, creating a 360-degree picture of a customer’s affordability profile and providing accurate, individualised spending recommendations.
Given its regulatory stamp of approval, customer care and popularity, and fundraising success, there are exciting times ahead for the fintech firm – and we’re keeping a close watch.
This new capital boost will be used to fuel further growth. Currently, the team is set on taking on the US market where they recently opened a Miami office and launched with over 150k pre-registered customers. Early numbers are showing significant momentum with growth rates of over 4x what was achieved in the UK where Zilch reached 2 million new customers in just 18 months.
Sean O’Connor, the Co-Founder, added: “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. Our extensive investment in communicating this message and developing our international network of renowned private, family office and institutional investors has enabled us to secure this extension at the same terms as our Series C, which is a testament to their belief in our significant market opportunity, and our ability to execute against it.”
