The buy-now-pay-later sector across the globe continues to receive support and major investments from investors, as it grows into one of the important sectors that rose from the pandemic. Often free from interest, buy-now-pay-later companies allow shoppers to make instalment payments for their purchases. The service thrived during the pandemic and have continued to see a surge in its demand. According to data from WorldPay, the buy-now-pay-later sector accounted for 2.1 percent of the world’s e-commerce transactions, a time characterized by the pandemic where people lost their jobs and had to stay at home.
Zilch, a British buy-now-pay-later company has announced $110 million raised in a fresh funding round that more than doubled its valuation to $2 billion. Eight months ago, the British company was only worth $500 million. The company also announced that it’ll be expanding to America following the round.
The Fresh funding round was led by Ventura Capital; a pre-IPO investor known for investing in big names such as Spotify and Alibaba, and Gauss Ventures. The newly-acquired funds will be used to launch the company into the US, set up an office in Miami as well as employ new talents needed for the US expansion.
Zilch is moving into an area with huge competition from companies like AfterPay, Klarna, etc. The company hopes to take them on by letting users pay at any merchant that accepts Mastercard. On the other hand, the aforementioned buy-now-pay-later companies include their checkout option on select retailers’ websites.
Speaking on the company’s strategy and the similarity of operations of other buy-now-pay-later firms, Zilch’s founder and CEO said that “I’m not saying they’re bad businesses but they’re just copycats. Our view was, you can’t come late to the party and just do something exactly the same way. We’re actually using the incumbents’ entrenchedness against them. We’re going direct to consumers and saying you can buy now, pay later anywhere you like”.
However, like other buy-now-pay-later firms, Zilch makes money by taking a small cut from merchants on each transaction processed through its platform.
