British buy-now-pay-later (BNPL) firm Zilch is planning an Initial Public Offering (IPO) in 2025. If it goes ahead, it could be open to retail investors. Looking for more information on the IPO? Here’s everything you need to know including how to buy Zilch shares.
Who is Zilch?
Zilch is a UK FinTech company that offers BNPL services. Launched in 2018, it has more than four million users today.
With Zilch, users get a card that allows them to pay for goods in interest-free instalments. They can choose to pay over six weeks, three months, or pay immediately and receive up to 5% in rewards.
One feature that sets Zilch apart from other BNPL firms is its app. Through the Zilch app, users can shop at thousands of stores including Amazon, eBay, and TK Maxx.
This feature gives the company valuable data on its customers, which it shares with merchants. Merchants can use the data to target customers with ads while Zilch can subsidise customers’ payments with its ad revenue.
The IPO details
Right now, there’s no guarantee that a Zilch IPO will go ahead. And if it does go ahead, it may not be on the London Stock Exchange (Zilch has reportedly held talks with the Nasdaq and the New York Stock Exchange, which offer deeper pools of capital for technology firms).
If we do see an IPO in 2025, however, the firm could be valued at around £1.7 billion (approx. $2 billion). This could put it in the FTSE 250 index if it was to list on the LSE.
How to buy shares in the IPO
Given that the IPO has not yet been confirmed, you can’t apply to buy Zilch shares yet.
One thing you can do now, however, is sign up for IPO alerts with major brokers such as Hargreaves Lansdown and AJ Bell. This will ensure you receive information on the IPO if it goes ahead.
If you’re keen to buy Zilch shares, it could also be a good idea to open an account with a major broker (if you don’t have one already). Because IPOs can happen quickly, and you don’t want to face account opening delays when you’re trying to apply for shares.
Will Zilch shares be worth buying?
Because Zilch has not yet confirmed an IPO, we don’t have a lot of details on its financials. So, it’s hard to know if the company is worth investing in.
Some things we do know are:
- Zilch has now exceeded $130 million in annual revenue and revenues recently doubled year over year.
- The firm is now profitable (we don’t know the level of profits at this stage).
- The firm is processing around 2,500 to 3,000 transactions per second at peak volume.
- Zilch has a 4.5-star rating review on Trustpilot with over 60,000 reviews.
- The BNPL market is expected to grow from $11 billion in 2024 to $80 billion in 2034.
All of these points are encouraging from an investment perspective.
However, it’s worth pointing out that BNPL is a competitive industry, and Zilch is going to be up against some powerful rivals in the years ahead including the likes of PayPal, Klarna, Afterpay, and Affirm.
Another risk is regulation. Currently, regulators are taking a close look at the BNPL industry.
The valuation here could also be a risk as it looks quite punchy. If Zilch is doing $130 million in revenue, a valuation of $2 billion equates to a price-to-sales ratio of about 16. That’s high. For reference, Affirm has a price-to-sales ratio of about six.
So, investors will have to weigh up the risk/reward proposition carefully before the IPO.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
Before establishing himself as a writer, Edward earned a Commerce degree from the prestigious University of Melbourne. Complementing his academic background, he holds the esteemed Investment Management Certificate (IMC) and is a proud holder of the Chartered Financial Analyst (CFA) qualification.
Widely recognized as a sought-after investment expert, Edward’s insightful perspectives and analyses have been featured on sites such as BlackRock, Credit Suisse, WisdomTree, Motley Fool, eToro, and CMC Markets, among others.
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