London-based buy-now-pay-later (BNPL) provider Zilch is mulling a £150 million share sale that will increase its current £1.5 billion valuation.
According to a Sky News report, Zilch is working with investment bank Citi on the capital raise, with existing investors Goldman Sachs and Ventura Capital said to be interested.
Zilch has a growing presence in Britain’s thriving financial technology scene and is considered a top IPO prospect.
However, chief executive Philip Belamant said earlier this year that London might not be Zilch’s ideal listing destination.
“We need pension funds investing in British businesses – if that’s not happening you just don’t get the liquidity and then you drive that decision away," he explained.
“We think that that timeline is over the next couple of years. We are already preparing for that event – it’s just about timing and venue which we have to decide at an appropriate point in time.”
Zilch’s BNPL model is unique in that it uses advertising revenue to subsidise interest expenses for the end user.
The BNPL industry, which is dominated by Swedish giant Klarna, has attracted significant scrutiny over a perceived lack of customer protections.
The UK government recently announced new rules that will require BNPL companies to follow stricter regulations, including obtaining approval from the Financial Conduct Authority (FCA), before offering their services.