KKCG and BNF Capital’s EUR 166.25m funding round into UK-based Zilch is a clear signal: the European market still has appetite for scaled, regulated BNPL players that can prove real unit economics, not just user growth.
A growth round built on profitability, not hype
Zilch enters this round with fundamentals that are unusual for a consumer fintech at its growth stage:
- Revenues doubled year-on-year, with a £145m revenue run rate as of January 2025.
- The company reported £110m revenue growth while cutting net losses to £10.5m in fiscal 2025.
- It has already delivered six consecutive months of operating profit.
Those numbers move Zilch out of the experimental fintech bucket and into the territory of scalable financial infrastructure – exactly where mid-market growth investors want exposure as the funding cycle normalises.
BNPL 2.0: from regulatory risk to regulated rails
The deal also underlines how the BNPL model is being reshaped by regulation rather than crushed by it. Zilch has leaned into this shift:
- On 11 December 2025, it secured a payment services licence from the UK Financial Conduct Authority (FCA), placing it firmly inside the regulated perimeter.
- It has deepened its relationship with Visa, becoming a direct principal member and embedding itself into mainstream card and payments infrastructure.
In a sector once criticised for regulatory arbitrage, this is the emerging blueprint: BNPL as a fully regulated payments product riding on card and banking rails, not a lightly supervised consumer credit add-on. KKCG and BNF are effectively betting that the winners in BNPL will look and behave like payments institutions, not marketing-led lending apps.
Scale that matters in European consumer fintech
Zilch is no longer a niche UK credit alternative. According to recent rankings, it has been named the UK’s fastest-growing unicorn by the Financial Times and Sunday Times 100 Tech 2025 and now counts over 5.3 million customers and £5bn in processed commerce.
That scale is strategically important for three reasons:
- Data advantage – Transaction volumes at this level give Zilch the behavioural and risk data to refine underwriting and reduce loss ratios, a key differentiator as regulation tightens.
- Merchant leverage – Higher throughput improves its bargaining position with merchants and partners, supporting better economics on both consumer and merchant sides.
- Cross-sell platform – A large, active user base gives Zilch scope to layer in adjacent financial services, from budgeting tools to broader credit and payments products.
For mid-market investors, this is the sweet spot: a company with proven product-market fit and infrastructure scale, but still early enough in its European expansion to offer significant upside.
Strategic use of capital: product, M&A, and EMEA push
The fresh EUR 166.25m—part of a broader funding effort that has seen Zilch raise over $175m in debt and equity led by KKCG with participation from BNF Capital—is earmarked for three clear priorities:
- Acceleration of growth in the UK and across EMEA, where BNPL penetration remains uneven and local champions are still emerging.
- Product development, likely focused on deepening its payments stack, improving risk and affordability tools, and building out features that support its regulated status.
- Strategic M&A in the fintech/BNPL landscape, where Zilch can consolidate niche capabilities (risk analytics, merchant tech, local licences) rather than build everything in-house.
For the European mid-market M&A universe, that last point matters. A profitable, well-funded BNPL player with an FCA payments licence and Visa principal membership is now a credible buyer of smaller fintech assets across the region.
Why this deal matters for the European mid-market
This round crystallises several broader market signals:
- From growth at all costs to profitable scale-up – Investors are rewarding BNPL businesses that have moved past pure customer acquisition and can show a path to sustainable profitability. Zilch’s six months of operating profit are central to the investment case.
- Regulation as a moat – Rather than deterring capital, clear regulatory status (FCA licence) and alignment with global schemes (Visa) are becoming key investment criteria and barriers to entry.
- BNPL as part of core payments – The integration into card networks and payments infrastructure shows BNPL is being absorbed into mainstream financial services, not sidelined.
Risks remain: rising consumer credit scrutiny, potential tightening of affordability rules, and intense competition from banks and large tech players. But Zilch’s trajectory—revenue growth, improving losses, regulatory authorisation, and institutional backing—positions it on the right side of these pressures.
For mid-market dealmakers, the message is unambiguous: scaled, regulated consumer fintechs with demonstrable economics are back in favour, and Zilch is now one of the benchmark assets by which others in European BNPL and consumer payments will be measured.