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  • 📈 Zilch Secures £150M to Outsmart BNPL Rivals

📈 Zilch Secures £150M to Outsmart BNPL Rivals

Unemployment Up: Labour Market Loosens Grip

November 12, 2024

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This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes

In today’s stories:

  • Zilch Secures £150M to Outsmart BNPL Rivals

  • Unemployment Up: Labour Market Loosens Grip

  • Bank’s Blunder Costs £16m, Shares Slip

The summary: Zilch’s mega funding boost, rapid growth, and smart lending model are setting it up as a serious fintech powerhouse, poised to outshine rivals and redefine the UK's buy now, pay later scene.

The details:

  • Big Money Moves: Zilch boosts its securitisation facility by £50 million via Deutsche Bank, now totaling £150 million, with backing from two global credit giants – a nod to Zilch’s rock-solid credit portfolio.

  • Scaling Up: With ambitions to support £10 billion in commerce, Zilch’s financial rocket is set to power consumer lending and rival Europe’s fintech titans. Revenues have nearly doubled, and a profitable streak has them eyeing an IPO.

  • Credit Power Play: Zilch's no-fee lending and credit reporting tie-ups offer users an interest-free path to building credit, setting them apart from traditional credit giants.

  • BNPL Revolution: Zilch’s ad-backed, cashback-rich payment network fuels a new wave in BNPL, appealing to 4 million users – and it’s giving Klarna and newcomers like Affirm a serious run for their money.

Why it matters: Zilch is turbocharging its growth and giving UK fintech giants a serious run, proving it’s no ordinary "buy now, pay later" player. By securing millions from global credit titans, Zilch is primed to supercharge commerce, bring more customers on board, and move even closer to an IPO. With a model that blends credit-building, cashback, and zero-interest options, it’s reshaping finance – all while Klarna and new US rivals scramble to keep up.

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The summary: With job openings down, pay growth slowing, and businesses bracing for Budget pressures, the UK's economy is in a cautious shuffle, but there’s still room for resilience and steady paychecks.

The details:

  • Unemployment's on the up: The UK’s unemployment rate edged up to 4.3% in the latest quarter, but the ONS warns us not to get too carried away – their data collection's been a bit shaky lately.

  • Wage growth waning: Pay is still outpacing inflation, but wage growth without bonuses dropped to 4.8%—its slowest in over two years—hinting at a cooling labour market.

  • Job vacancies fading: Open positions have dipped again, but there are still more vacancies than pre-pandemic, showing some resilience amidst a market slowdown.

  • Budget pinch: Tax hikes and minimum wage boosts from the Budget are pressuring businesses, with some warning of hiring freezes, slimmer pay raises, and possibly higher prices.

Why it matters: The rising unemployment hints that the UK’s job market is cooling off, which could spell trouble for job security and wage growth. Slowing pay hikes might ease inflation worries, but with businesses feeling the Budget squeeze, expect them to tighten the purse strings on hiring and raises. In short, the economy’s in a bit of a balancing act, and for workers, it’s a time to keep a close eye on those pay packets.

The summary: Metro Bank’s £16m fine for lax money laundering controls is a reminder that even challengers can slip up, but they’re now focused on turning a fresh page with a new strategy, despite a rocky start.

The details:

  • Metro Bank faces a £16m slap on the wrist from the FCA for not-so-slick money laundering controls, with a staggering 60 million transactions left unchecked.

  • Despite junior staff waving red flags since 2017, issues went on until late 2020, prompting the regulator’s scolding.

  • The FCA insists that Metro’s failures left a gap in the UK's financial defences against criminal activity, saying it dragged on far too long.

  • Metro’s CEO calls it water under the bridge, aiming to shift focus to mortgages and business lending, though shareholders aren't too thrilled, with shares dipping 3% at the open.

Why it matters: Metro Bank’s £16m fine is a wake-up call that even the big players can’t afford to skip on crucial financial safeguards. The FCA’s slap-down reveals just how vulnerable banks can leave us when they ignore red flags, even from their own team. With shares dipping and Metro now scrambling to shore up trust, it's clear that a bank’s reputation can be as volatile as its stock price.