Zilch Technology Ltd. is preparing to become the latest entrant in the U.S. buy now, pay later market. The move hinges on the London-based company’s acquisition of San Francisco-based debt-funding platform Neptune Financial & Management Services LLC (NepFin), a deal Zilch announced on Thursday. The terms were not disclosed.
The acquisition follows a recent extension of a Series B funding round that raised an additional $110 million for Zilch from Goldman Sachs and DMG Ventures. The additional funding came on top of the $80 million raised earlier in the round.
Zilch’s entry into a crowded U.S. market is not without challenges. The U.S. BNPL business has seen several partnerships struck by incumbents in recent months to expand their offerings, such as Affirm Inc.’s partnership deals with e-commerce platforms Amazon.com Inc. and Shopify Inc. Other major BNPL players, such as PayPal Holdings Inc., have taken steps to make their offerings more enticing to consumers. Last month, PayPal dropped late fees for missed payments on its installment products in the United States, the United Kingdom, and France, effective Oct. 1.
“The BNPL market in the U.S. is seeing more partnerships which means it is a mature market. It’s a tough time to get in,” says Sheridan Trent, a research analyst for The Strawhecker Group.