Monday, July 22, 2024

Klarna rival Zilch raises $125 million with aim to triple sales and accelerate path to IPO


Zilch CEO Phil Belamant.

Zilch

LONDON — British fintech firm Zilch said Wednesday it’s raised $125 million in debt financing from German banking giant Deutsche Bank in a deal that will help the company triple sales in the next couple of years and move closer toward an initial public offering.

The company, which offers shoppers the ability to purchase items and pay off the debt they owe in monthly, interest-free installments, said the debt was structured as a securitization, where multiple loans can be packaged together.

Zilch initially sourced credit for its installment plans and other loans from Goldman Sachs‘s private credit arm. The company said the deal with Deutsche Bank came with more flexible terms and would enable it to draw down up to $315 of credit in total — including from different banks.

Philip Belamant, Zilch’s CEO and co-founder, noted the terms of its arrangement with Goldman Sachs were beneficial for a young, fast-growing startup — but ultimately too restrictive. Zilch’s capital needs have accelerated as the business has matured, and required a credit arrangement that was more flexible, he said.

Zilch CEO: We will list in the UK if favorable policies are adopted

“For us, we think it’s a major milestone in the company’s growing stage, which is, we’ve gone through the line we have with Goldman, it’s been a brilliant relationship and partnership,” Belamant told CNBC. “But now we’re stepping it up to securitization … so we [can] continue scaling.”

The additional $190 million of credit will become available to Zilch as the firm continues to grow. Belamant said the firm is already planning to strike agreements with other banks to raise more debt in the coming months.

The move is a sign of how buy now, pay later upstarts are continuing to double down on their products and loan growth, even as larger incumbent players in finance and technology are bowing out of the once-buzzy market.

This week, Apple announced it would shutter its BNPL program, Pay Later, which let users split purchases over four interest-free installments. It will integrate third-party services from firms like Affirm and Citi, instead. Meanwhile, Goldman Sachs recently sold Greensky, a BNPL firm it bought in 2021.

IPO within 2 years?



Source link

Related Articles

Latest Articles