Buy now, pay later upstart Zilch secured $125 million through a debt agreement with Deutsche Bank. Previously, Zilch received credit from Goldman Sachs, but its rapid growth required a credit plan that could match its increasing demands.
Zilch asserted that the deal with Germany’s largest bank will help the company triple its sales in the next few years. The BNPL lender also announced its intention to become a publicly traded company as soon as next year.
The Deutsche Bank deal allows for an additional $190 million in credit if Zilch continues its positive trajectory. The fintech stated that this agreement is the first of many debt deals it plans to ink over the next few months.
Value From Debt
Zilch has generated more than $3.17 billion in gross merchandise value (GMV) since its launch in 2018. The company reported that it can produce $30 in GMV for every $1 of debt raised. By that math, the initial $125 million from the Deutsche Bank deal is expected to deliver $3.75 billion in value.
Following the rapid adoption of its Pay in 6 Weeks plans, Zilch announced the launch of its Pay in 3 Months program earlier this year for purchases over $95.
Carving Out a Niche
Zilch’s product line is one of the reasons it has been able to carve out a niche in an industry where larger companies have faltered. Apple recently announced it was shutting down its BNPL service, Apple Pay Later, partly due to increased competition from companies like Affirm, Klarna, and Zilch.
Another reason Zilch has gained traction is its multiple revenue streams. The fintech earns revenue through both interchange fees and commissions paid by retailers to appear in its app.