London-based buy now pay later (BNPL) provider, Zilch, has recently received a significant investment from eBay, resulting in a valuation of £1.65bn ($2bn). The popular US ecommerce giant acquired a share of Zilch, a competitor to Klarna, as confirmed by Zilch’s filings on Companies House, which were first reported by the Telegraph.
The investment, made by eBay Ventures, the equity arm of the online marketplace, is believed to be in the low single-digit millions. Zilch, however, declined to comment on the matter.
Founded in 2018, Zilch operates in the BNPL market, offering customers the option to split their purchases into four payments over a span of six weeks. Notably, Zilch does not charge interest, but late fees may apply for deferred payments.
Zilch’s CEO, Philip Belamant, expressed that the company is seriously contemplating an initial public offering (IPO) and has been evaluating its plans for such a move. This announcement was made when Zilch opened trading at the London Stock Exchange in August.
It is important to note that the BNPL market is currently facing regulatory uncertainties, as the government considers implementing stricter rules for the service. Zilch, alongside its rival Klarna, has already taken steps to comply with regulatory proposals. For instance, both companies now report BNPL usage to credit agencies, which means that failed payments can negatively impact credit scores.
In response to concerns surrounding “unfair and unclear” BNPL contracts, which fail to properly inform users of the risks involved, the Financial Conduct Authority (FCA) has recently announced measures to crack down on such practices.
As Zilch continues to make waves in the BNPL market, the company remains poised for growth and development, while keeping a keen eye on the evolving regulatory landscape.
