Zilch receives eBay investment

Wednesday 1 November 2023 09:53 CET | News

UK-based payments technology company Zilch has secured an investment from eBay in a deal valuing it at GBP 1.65 billion. 

Reportedly, Zilch received a low single-digit million equity investment from eBay Ventures, however, the company declined to comment on the matter. Currently, the company has the backing of Goldman Sachs and secured multiple investments from existing investors, enabling it to retain its multibillion-dollar valuation despite a broader decline in fintech shares.

UK-based payments technology company Zilch has secured an investment from eBay in a deal, bringing the company's total value to GBP 1.65 billion.

Zilch enables customers to delay payments by distributing them into four instalments over six weeks without charging interest, with users also being able to make payments in advance. However, if customers decide to defer a payment, Zilch charges a fee of up to GBP 1.50. In particular cases, the company also charges a fee if the retailer is not a partner. 

BNPL usage in the UK

Currently, Buy Now, Pay Later (BNPL) is the fastest-growing online payment method in the UK, with an expansion rate double that of bank transfers and triple that of digital wallets. According to Finder’s research, approximately 36% of the British population used BNPL services in 2023, amounting to 19 million people, with the number tripling from 12% in 2021. Moreover, an additional 13% of the UK population plans to leverage BNPL at some point in the future. The payment method is popular among millennials, with 55% confirming that they used BNPL during this year, while Brits aged 55 and over doubled their use in 2022.

Despite its popularity and growth, the BNPL sector came under pressure as venture capital funds decreased and interest rates rose. Klarna, the Swedish competitor of Zilch, was reportedly forced to reduce its valuation by more than 85%, due to a difficult funding market. Moreover, the sector also faces the possibility of new regulations due to concerns regarding BNPL’s offer for fast-fashion, as it encourages consumers to spend beyond their limits. 

Previous developments from Zilch

In recent months, Zilch announced multiple partnerships and product launches, further strengthening its geographical footprint globally. At the beginning of October 2023, the company launched its Zilch Up service, aiming to provide more affordable credit via BNPL borrowing for underserved clients and to improve financial inclusion. By leveraging Zilch Up to offer financial services and products to clients and customers excluded from mainstream credit, the company intended to create access to credit for multiple individuals to develop and optimise their financial profiles, without the need to pay for interest.

Moreover, in June 2023, Zilch launched Ad-Subsidised-Payments-Network (ASPN) to third parties, with open APIs. The proprietary ad-sales platform delivers its services and solutions for retailer partners and provides customers with approximately USD 160 million in savings by leveraging cashback, rewards, and interest-free credit.

One of the companies that Zilch partnered with includes Yapily, an Open Banking platform, their objective being to provide access to 0% interest swift repayment credit. Through this collaboration, Zilch can leverage Yapily’s Open Banking platform and expertise to offer an improved credit decisioning process. 

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Keywords: investment, BNPL, mobile banking, fintech, instalment payments, online payments
Categories: Banking & Fintech
Companies: eBay, Zilch
Countries: United Kingdom
This article is part of category

Banking & Fintech




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