Zilch’s Post

Transcript

Welcome back to Bloomberg Markets Now. The British fintech firm Zilch has just raised $127,000,000 in a securitized debt financing deal arranged by Deutsche Bank, with the Buy now pay later firm seeking to expand before a planned IPO next year. And for more, we have exclusively a conversation with the CEO Philip Bellamont. Love to have you back in the studio with me. This is a big deal. How you feeling? What we're feeling good about it. It's taken a number of months for us to get this deal done. And so obviously we're excited to come here and talk about nice to see you again, thanks for having us. But but for us really this deal means growth, OK. So if you look at this deal for us, it's a securitization, more than $300 million securitization vehicle and Deutsche leading that with 125 to $27 million in that vehicle. This allows us to triple the commerce that we can send to our retail partner network, which is phenomenal to see. So really we're excited about the deal. Because we can accelerate the rollout of our product road map. Yeah, continue to capture wallets and market share, particularly at a time when others in the space are finding it quite difficult. So if I'm a zilch customer, what changes for me? So everything just continues to get better. So the more volume we can drive to retail partners, the better the network performance. So our engine is called an ad subsidized payments network, Aspen. This is driven through AI. And so effectively, the more customers we can drive to retailers. The more sales we generate, the more commissions this retail network will pay, and that means that credit gets cheaper and is free, or of course, deals and discounts just get bigger. And in the cost of living right now, everyone needs a bit of a break. How much more can we put in people's pockets? We've saved customers now half a billion dollars in counting in fees and interest. And yet at the same time, as you're growing in the buy now, pay later space, you've got Apple this week shutting down its own pay later program, or at least announcing that it's going to do that. Why are you doubling down? Well. They're kind of exiting. It's very difficult for us to speak to other companies. It's always, you know, it's hard to say what's happening on the inside when you're you're on the outside. So what I can speak to is what's going well for zilch. So for us, it's three things that we see are working really well for us. The 1st for us is that you have to have regulation. So in this market, we think you need to be regulated. You must be regulated. The 2nd is you need diversified streams of revenue I mentioned. Aspen, we don't make one single stream of revenue. We making a variety of revenues. You need this. The unit economics just do not work without it. And then the third is you have to go direct to customers. We think you need to own the relationship with the customer. And I can of course elaborate on these if you would like me to. What I would like you to elaborate on is why you've gone for Deutsche Bank and not someone else. So what's interesting is we ran a process for this, you know this has taken it. I mentioned a few months for us to complete this process. We had more than 10. Of the top banks moving into the RFP that we ran and I think why we so excited about Deutsche is that they really are bank known for ingenuity around lending. It's it's their core, it's what they do. What we also love about this is that. What we really see from this deal is you have a bank that's taking a retail deposit, so deposit from your eye and is looked at our company has gone we willing to invest a pound or a dollar from Uri into this book. That's how safe this investment is and we really like to see them leaning into the steel. So I spoke to you recently, you were saying that the time frame for listing was a year or two. You say that this deal is going to bring you closer to an IPO. What's the time frame now? It's a combination of factors so. This deal certainly helps us move towards IPO and being a public business. We have to report on this quarterly, Deutsche, the first major partner for us in the securitization. We will be bringing others alongside them. And so we think that's just another big step for us towards being public already. What we really need to see as some of the other things we've talked about to bring the timeline forward, interest rates have to come down tomorrow. We're going to find out what's going on there. Yeah, we need to see lazy capital moving back to equity is IPO markets opening back up. And of course, the types of policies to incentivize companies. Would you entertain a takeover? I'm sorry, what was that? Would you look at a takeover? It's an interesting question there. I mean, I think depends which way round you're talking about. Well, I'm wondering what's keeping you from the IPO. So for us really what you know, it's all about timing. We think that if we're going to go to market, we have to be at a size and at the market where we can generate great returns for shareholders post the IPO. For us, the IPO are raised to the start, OK. So we really need to get the timing of that right. There's the timing and there's also the location. The Atom Bank CEO says London's the obvious. Joyce, why aren't you as convinced as him? I don't think we're saying we're not convinced. I think what we're saying is we have to do what's right at the time for the company and shareholders. Where are we going to return the most value? And right now you could argue grass is green on either side. We've obviously been saying a couple of things and that is that in both markets, the US, the UK, interest rates have to come down, capital has to move back to IPO's. Otherwise it's not interesting really anywhere right now. On top of that though, in the UK specifically, we know we need to change a couple things. You need liquidity in the market, we have to have that, and we need perceptions to change around the LSE. We see a lot going on in that space. We're encouraged by that. We love what we're seeing and so obviously the clock is ticking. We can't wait to see what happens with policy. Yeah, well, the other thing that's happened since our last had you here in the studio with me was we've had the Labour manifesto, the Conservative manifesto and all the other parties. Has any of that offering tempted you to list in London more? To be frank with you, what we're doing is we're more relying on the conversations we're having with parties directly around. Business and how they see policy moving forward. I think it's always different to be fair with what people say now versus what happens after they're in the seat. We'd like to see we just, I mean the clock is counting down, right? We almost there. We know who's going to be taking ownership and control of this fantastic technology sector. It's about to happen and once we've done that, we can move from there. Alright, well, you'll have to come back and tell us where you're going to do that IPO as soon as we have the election result on July the 4th result CEO Philip Bellamont, always a pleasure to have you with me. On the programme.