At about this time last year, Zilch, a London-based fin-tech, was just getting going. It had, says Philip Belamant, its South African-born CEO and founder, about 12 staff and was looking to hire another three. By the end of the year it had 85 employees and now is poised to gain another 100. Customers are joining the app, which is in the buy now, pay later sector most associated with the likes of Klarna and Clearpay, at the rate of 125,000 a month, bringing the total now signed up to just under half a million.
Much of that growth Belamant attributes to the surge in online spending during the pandemic. But he insists that because unlike its rivals, which have formed relationships with retailers Zilch works directly with the customer and effectively provides a digital credit card that can be used pretty much anywhere it is in a position to benefit when shoppers return to the high street. That said, he concedes that, while recent months have been an unbelievably exciting time, it has been a little unnerving. We expected to be five to six times less [in size] at this point, he says.
He also acknowledges that it appears rather counter-intuitive at a time of great uncertainty for people to move jobs to a start-up. But he believes that for many of the people looking to move to Zilch the virus almost forced them to change. People looked closely at their lives to see whether they were happy doing what they were doing. Similarly, the sense that we have been living through a remarkable time has motivated a few people to leave the company because they did not feel it was the right fit. Moreover, since the original lockdowns a year ago, when many businesses reacted by effectively shutting down and waiting for the virus to pass, there has been a sense with the shift to e-commerce that technology companies were the place to be. And certainly many more companies are now hiring again. Belamant also makes the point that, with little or no return on traditional investments, there is plenty of money to be invested in promising-looking start-ups. Zilch has recently raised $80 million, valuing the business at $500 million.
The growth of the interest-free buy now, pay later market has inevitably led to concerns about the practice fuelling debt among those who cannot afford it. Earlier this year, the Government announced plans for the Financial Conduct Authority to regulate the sector. The exact format is not yet known, but Belamant says Zilch is prepared. Not only has it already obtained a licence, but the CEO insists that the model Zilch uses which includes using Open Banking and AI to check that individuals can afford what they are signing up to actually enhances financial inclusion by enabling people who do not fit regular credit criteria but have regular income to buy items. Indeed, the company is a development of an idea that Belamant has used successfully to see off payday lenders in various African countries and in India, where people typically do not have enough money to pay for big-ticket items at once but might be able to afford them if they can spread the payments.
While buoyed by the fact that the venture appears to be striking a chord, Belamant who moved to the U.K. seven years ago does not pretend that the past year or so has not been something of a rollercoaster. Moving from being in a WeWork office had initially led to a rise in productivity as employees spent all their time working rather than being distracted by table tennis and other activities in a serviced office. But then the realities of moving rapidly from a beta site set in. There were challenges associated with trying to train people as well as developing a culture, he says.
Now, though, the business is starting to go back to the office on a hybrid basis. Belamant reckons that between a third and a half of the team will return to the HQ in central London, with the rest working remotely. But even those in the office will likely on be there for two to three days a week. When not in the office they can either work from home or use a nearby WeWork-type facility.
This change in office culture is part of a more general shift in behavior that Belamant has identified and sees Zilch being increasingly tied into. Customers today are the most informed ever. They dont overpay for anything, he says. In the future people will not own so much, he adds, explaining that subscription or leasing arrangements, which are now commonplace for items as varied as cars and mobile phones, will likely become the norm. This is just the beginning of that.
