From startup to double unicorn: The journey of Zilch

Philip Belamant, Co-Founder and CEO, Zilch (Supplied)

Philip Belamant is the Co-Founder and CEO of Zilch, Europe’s fastest-ever company to achieve unicorn status in just 14 months.

The UK FinTech is the world’s first direct-to-consumer, ad-subsidised payments network (ASPN) with a mission to revolutionise the global payments industry by eliminating the high cost of consumer credit. For good.

Can you provide a brief overview of your business, its core activities, and how it was founded?

All my professional life, I’ve created technology-based businesses that create a positive change in society. With a background in payments, I came to understand traditional credit and payments haven’t been designed to meet the needs of the underserved.

Can you believe that in 2024, across the US and the UK, we’re still spending $150 billion a year on fees and interest? That’s $400 million every single day. When we discovered this problem, we realised we had found our purpose. We needed to build something to drive that $150 billion to zero, to Zilch.

The real question was, how do we do it? We followed the money and asked ourselves: What do people do when they take out personal credit or use their credit cards? They buy something. I know that seems obvious, but the lightbulb moment for us at Zilch was that someone else is benefiting from these transactions. The sellers of those goods and services are benefiting from us taking out what we found to be a total of a trillion dollars of credit to simply buy things.

Brands pay billions in advertising through Google and Meta. We click these ads and then pay billions in fees and interest to buy the items. If we can cut out the middlemen and have buyers meet sellers at the highest point of intent—at the point of payment—we could change commerce as we know it.

And so, at Zilch’s inception in 2018, we asked ourselves a question: Could we turn ad spend into free or affordable credit, deals, and rewards? We launched Zilch with the mission to create a way to pay that was fair, transparent, and ubiquitous,  with the vision of eliminating the high cost of consumer credit. For good.

Launching during the pandemic was a challenge, and we had our fair share of ups and downs. However, we had a real purpose—it was written in our name—and we kept our focus on our product-market fit. Demand swelled and we grew our team to 200+ staff in just 18 months.

Fast forward to today, and we have created a fresh, unique, and permanently rewarding way to pay. Zilch provides millions of customers the freedom to go anywhere in the world (online or offline) and, when they pay, earn rewards on debit payments or spread interest-free credit repayments over six weeks or three months. All payments are protected, and Zilch helps customers build their credit profiles with the major credit agencies. This has saved customers over half a billion dollars in interest and fees through cashback rewards and interest savings.

We’ve supercharged our growth because of our focus on the customer. In May, we were proud to announce we had reached over 4 million customers and generated over $3 billion in Gross Merchandise Value (GMV) for retailers.

How has your company successfully grown within the tech industry over the past few years?

It might sound obvious, but the key is to build a product that solves a real-world problem. Our unique direct-to-consumer model achieves this, and the fact that we worked with regulators and became one of the first BNPL providers to secure an FCA Consumer Credit Licence before launching publicly made us a highly attractive investment proposition from the start. In recent times, many highly established consumer focused companies have pulled out of the space that we operate in. While we don’t speak for others as they can’t speak for us, there are three reasons why Zilch is growing: 1. we are regulated, this builds foundational trust; 2. we have multiple revenue streams and do not rely on one; and 3. we are direct-to-consumer. This means in a cookie-less world, you own the relationship, have first party data and can therefore always understand the customer’s needs and learn.

Our investment in proprietary technology has been a huge part of the remarkable growth we’ve seen. We are constantly innovating. With our advanced use of Gen AI and machine learning and with strategic partnerships we are creating ever-increasing value for customers.

2024 has been a standout year for our partnerships. In April, we selected Checkout.com, a leading global digital payments solution provider, as our primary acquiring partner. We also announced a major partnership with AWS, the world’s largest cloud provider, accelerating AI innovation across our proposition and keeping Zilch at the cutting edge of FinTech.

In addition, we raised $125 million from Deutsche Bank in our first securitisation, which will allow us to almost triple sales and accelerate our product roadmap as we grow to breakeven and beyond.

What key technologies or innovations have been instrumental in driving this growth?

Everything we do is underpinned by technology, specifically AI. We wouldn’t be where we are today without it.

Utilising AWS technologies from inception, we are leveraging AI and ML services including Amazon SageMaker and Bedrock to enhance fraud protection, credit underwriting, customer servicing, and buyer intent prediction. In terms of growth, this partnership is projected to add over a quarter of a billion dollars in sales within the next 12-18 months.

Our GenAI engine, trained on almost four years’ worth’ of lending data from our 4 million customers, provides us with 15-18 times the data of our closest peers. This extensive data lake, combined with AWS technology, creates trust, immense speed, and offers Zilch unrivalled insights into our customers’ spending and credit landscapes. This enables us to better understand customer needs and drive greater value.

What key skills or attributes do you believe are essential for success in the tech sector?

Building a team of people who understand your values and vision is crucial. It is important they understand how they can uniquely contribute to the business, recognise where it’s heading, and be invested in its success.

For us, it has never been about putting bums on seats. We were lucky that early in our journey, we attracted and retained phenomenal people who have helped build the business that exists today. Diversity and experience were crucial in building our team. Our leadership team includes individuals with a range of backgrounds and professional experiences, including founders, managers from major banks, and experts in advertising technology. People are the engine to drive growth, and it’s important to invest in them.

Looking ahead, what are your ambitions for future growth and innovation in the tech industry?

We aim to continue to unlock value for our customers and broaden both our wallet and market share. At the moment, we are adding over 100,000 new customers every month and doubling our revenue year-on-year, with no plans to slow down.

Today, the UK is in the middle of a general election. The next government will inherit stewardship of a trillion-dollar, world-leading UK technology sector—the third largest on the planet. Just imagine the possibilities if we can provide both companies and investors absolute clarity on policy.

The Unicorn Council for UK FinTech that Zilch co-founded earlier this year with Innovate Finance is collectively guiding a £50 billion wave of potential future UK IPOs. This unique assembly comprises visionary leaders who run the most valuable private FinTech companies in the UK and generate colossal economic value for the country. I am proud to co-chair this market-first council alongside CEOs Janine Hirt of Innovate Finance, Francesca Carlesi of Revolut, and Charles McManus of ClearBank. They possess a clear vision of the core handful of policies needed right now to transform perceptions and accelerate economic growth in the UK. We created a five-point policy plan that sets out recommendations for policymakers to pioneer growth and change in capital markets, taxation, and regulation.

If a company lists in the UK, liquidity is a problem. Let’s remove any excuse for the stakeholders here in the UK not to invest in the economic growth of the country.

What does it mean to your organisation to be included in the E2E Tech 100 list for 2024?

With Zilch being born and scaling in the UK during a pandemic—possibly the most challenging time in modern history—it is important we celebrate British companies and their success stories. We are thrilled to be recognised in this list. This commendation is a testament to the hard work of our team and the journey we have taken over the past five years.