According to Sifted, UK buy now pay later fintech Zilch has raised $175 million across equity and debt financing. The round was led by KKCG with participation from BNF Capital and others, while Deutsche Bank expanded the company’s debt securitization. Zilch’s valuation remains unchanged at $2 billion from its previous equity raise. The company reported £110.3 million in revenue against £10.4 million in pre-tax losses in its latest financial results covering FY2025. With over 5 million users, Zilch plans to use the funding for strategic acquisitions, increased marketing spend, and product development including next year’s launch of Zilch Pay.
The funding playbook
Here’s what’s interesting about this raise – it’s a mix of equity and debt, which tells you something about Zilch’s financial maturity. They’re not just burning venture capital anymore. The Deutsche Bank debt securitization piece suggests they’ve got predictable enough revenue streams to secure traditional financing. And maintaining that $2 billion valuation in today’s market? That’s actually pretty significant given how BNPL valuations have been hammered elsewhere.
The numbers behind the hype
Let’s talk about those financial results for a second. £110 million in revenue is solid, but they’re still posting losses. The thing is, £10 million in pre-tax losses on that revenue isn’t actually terrible by fintech standards. They’re clearly managing their burn rate while scaling. With 5 million users, that works out to roughly £22 per user in annual revenue. The question is whether they can increase that average revenue per user while keeping acquisition costs reasonable.
What’s next for Zilch
CEO Philip Belamant specifically called out interest in companies with “strong consumer relationships” and marketing technology firms. That tells you they’re thinking about user acquisition efficiency and retention. The planned Zilch Pay launch for next year sounds like their attempt to create a more seamless checkout experience, basically trying to compete with the likes of PayPal and Apple Pay on convenience. But here’s the thing – the BNPL space is getting crowded and regulated. Acquisitions might be their fastest path to differentiation.
The BNPL landscape
This funding comes at a time when other BNPL players are struggling. Affirm’s stock has been volatile, Klarna took a valuation haircut, and regulatory scrutiny is increasing globally. So why are investors still backing Zilch? Probably because they’ve managed to grow while keeping losses relatively contained. Their approach of combining BNPL with broader payment functionality might be the diversification play that keeps them relevant as pure-play BNPL faces headwinds. Only time will tell if this $175 million war chest gives them the edge they need.
