Zilch Secures £150m Deutsche Bank-led Securitisation Deal

Buy-now-pay-later provider Zilch has expanded its securitisation facility to £150m through Deutsche Bank, securing additional backing from two global credit funds as the fintech company reports rising transaction volumes.

The expanded facility, which represents a £50m increase from its initial securitisation, will support £10bn in annual commerce through Zilch's payment network. The deal comes four months after the company's first securitisation announcement, reflecting growth in its lending portfolio.

Funding to fuel expansion

The securitisation – a financial instrument created by pooling debt obligations and selling them to investors – marks a development for Zilch as it seeks to increase its market presence in the payments sector. The structure enables the company to scale its consumer lending operations while maintaining regulatory compliance.

“Bringing two more leading global credit funds into our securitisation structure not only underscores the increasing confidence in our business model but also provides the financial fuel and resources we need to accelerate our growth,” says Philip Belamant, CEO and Co-Founder of Zilch.

Growth trajectory and market position

Zilch operates what it terms an ad-subsidised payments network (ASPN), which combines advertising revenue with payment processing. The company, which launched in 2020, reported reaching profitability in July 2024 with revenue of $130m annually, positioning it alongside established European fintech firms Revolut, Starling Bank, and Monzo in terms of growth rate.

The firm enables consumers to make purchases using either immediate payment or interest-free credit spread over six weeks or three months. Users can earn up to 5% cashback on immediate payments, while credit options provide flexibility for larger purchases.

Within 44 months of launch, Zilch has registered more than 4 million customers, demonstrating uptake of its combined debit and credit offering. The company's model targets both online and offline transactions, aiming to merge traditional payment methods with rewards programmes.

Hugh Courtney, Chief Financial Officer of Zilch, says: "We are fortunate to be able to satisfy the pent-up demand for our securitisation as the business has grown at pace through the last six months. Our class-leading unit economics and unique high-engagement business model mean that this growth will accelerate as we head into 2025 and beyond."

Regulatory framework and credit reporting

The company operates under Financial Conduct Authority oversight, having secured its consumer credit licence through the regulator's Sandbox Programme in April 2020. This programme enables firms to test financial products in a controlled environment before wider market release.

In January 2023, Zilch established credit reporting agreements with UK credit reference agencies to enable customers to build credit profiles through interest-free lending. This initiative aims to provide an alternative to traditional high-cost revolving credit products for credit building.

Technology and merchant integration

In September 2023, Zilch introduced its ASPN service, creating a network that connects merchants with customer spending data. The system provides personalised offers based on customer transaction patterns, enabling retailers to target consumers based on purchasing history.

The company’s vertically integrated structure combines first-party data collection with payment processing, differentiating it from traditional payment providers. This approach enables direct relationships with both merchants and consumers.

Philip says: “With our uniquely capital-efficient model meaning that every £1 of finance powers over £25 of sales, we're in an exceptional position to deliver significant shareholder value and expand our offering, thanks to this new milestone achievement.”

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