UK buys now and pays startup later Zirch raises funds for US expansion

People using the Zilch app.


London — British startup Zilch is riding the “buy now, pay later” wave to the United States.

The London-based company said Wednesday that it had raised $ 110 million in a new funding round worth $ 2 billion. That’s four times the value of $ 500 million in the last private investment round eight months ago.

The investment was led by venture capital, a pre-IPO investor that previously supported it. Alibaba When Spotify, And Gauss Ventures, an investor in London fintech company Curve.

Zilch plans to use fresh cash to enter the United States. With an office in Miami, approximately 10 employees are working to expand their business in the United States.

Buy now, pay later, or BNPL, service is attractive Growing demand E-commerce is accelerating during the coronavirus pandemic. With such products, shoppers can split their purchase costs over several months, often interest-free.

In 2020, BNPL accounted for 2.1% of global e-commerce transactions (about $ 97 billion), according to Worldpay data.

Zilch hopes that his approach to BNPL will help him stand out from the crowd. Rivals like Klarna, Afterpay When agree with Include a checkout option on some retailers’ websites. On the other hand, with Zilch, users master Card..

Zilch CEO and founder Philip Belamant said startups chose that path because all BNPL companies “look exactly the same.”

“I’m not saying they’re a bad business, but they’re just imitators,” he said. “In our view, you can’t be late for a party and you can’t do anything in exactly the same way.”

“We’re actually taking advantage of the incumbent’s retention on them. We go directly to the consumer and say you can buy now and pay later wherever you like. . “

But the company is like a rival in a way to make money. Zilch takes a small cut from the merchant with each transaction processed through the platform.

Retailers are willing to pay these fees as sales will increase in the long run.

Wild growth

Bellamanto said his company has grown significantly since it secured its last round of funding in March.

“The company is about eight times as big,” he said. “Full-year sales have increased by 30-35% month-on-month.”

Zilch says it currently has 1.2 million customers and employs 200,000 new users each month. The company has more than 210 employees (up from just 20 in March) and aims to hire another 100 in the next 12 months.

However, this growth could be tested in the coming years as regulators are scrutinizing this area.In the UK, the government Introduction of new law Put BNPL under regulatory supervision.

“It should be regulated,” Veramant said. Zilch obtained a consumer credit license from the Financial Conduct Authority in the United Kingdom in 2019. We also offer a “pay now” option that allows the user to pay the full amount of the item. Klarna recently launched Similar function In england

“After all, BNPL is a debt certificate, so we got a consumer credit license,” said the founder of Zilch.

We also support startups Goldman Sachs Venture capital division with Daily Mail and General Trust, Owns the Daily Mail newspaper. To date, we have raised a total of $ 340 million in both equity and debt funding.

The treasure chest of the war of funds will be the key to helping Zirchi build a foothold in the US market, which is dominated by Afarm, Afterpay, Klarna and others.

“We need to thank these other people for spending millions of dollars on educating our customers,” Veramant said. “Klarna tried to go to America six years ago, but it didn’t work. I suspect the timing was wrong.”

“Many investors and shareholders have asked us if we are doing product market suitability testing for the US. In fact, the answer is what Afterpay is doing for us.”

The BNPL market is already showing signs of integration.American fintech giant square Earlier this year, PayPal agreed to buy Japanese company Paidy for $ 2.7 billion while buying Afterpay for $ 29 billion.

Zirchi isn’t the only start-up to benefit from the surge in demand for BNPL. Elsewhere in Europe, German fintech company Billie raised $ 100 million at a valuation of $ 640 million, and Italian company Scalapay got $ 155 million at a valuation of $ 700 million. rice field.

UK buys now and pays startup later Zirch raises funds for US expansion

Source link UK buys now and pays startup later Zirch raises funds for US expansion

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