• British online payments firm Zilch says it has raised $125 million in debt financing from Deutsche Bank in a deal that will help the company triple sales in the next couple of years and move closer toward an IPO.
  • Zilch said its deal with Deutsche Bank came with more flexible terms and would enable it to draw down up to $315 million of credit in total — including from different banks.

OUR TAKE
These preparations also lay the groundwork for Zilch’s future listing, allowing it to further expand its presence and strengthen its competitiveness in the market. Through ongoing loan raising and investment, Zilch has demonstrated its determination and ability to innovate and expand its business in fintech.
–Revel Cheng, BTW reporter

British fintech firm Zilch raised $125 million in debt financing from German banking giant Deutsche Bank in a deal on Wednesday.

What happened

British fintech firm Zilch said it’s raised $125 million in debt financing from German banking giant Deutsche Bank in a deal on Wednesday 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.

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Why it’s important

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.

“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 said. “But now we’re stepping it up to securitization … so we can continue scaling.”

The move is a sign of how buy now, pay later upstarts are continuing to double down on their products and loan growth.

The financing not only helped Zilch expand its market share and boost sales in the short term, but it also prepared it for a future listing. The company plans to use the funds to accelerate technology and product innovation to meet growing consumer demand and further solidify its leadership position in fintech.