In the Room with Larry Diamond, Co-Founder of ZIP

The Room Podcast
4 min readApr 3, 2024

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Claudia and Madison with Larry Diamond, CEO and Co-Founder ZIP

Welcome back to The Room Podcast! In today’s episode, we’re thrilled to have Larry Diamond, co-founder of ZIP, joining us for an insightful conversation. Larry and his co-founder, Peter Gray, identified a critical gap in the market, leading to the birth of ZIP. This episode delves into the evolution of digital payments, exploring ZIP’s role in providing seamless financial solutions for businesses of all sizes.

In this episode we discuss; the transformative impact of ZIP on the fintech ecosystem, the importance of innovation in the digital finance space, and Larry’s advice for budding entrepreneurs navigating the enterprise SaaS sector.

Tune in for an up-to-date discussion on the future of finance, transparent M&A strategies, and the vital role of user-friendly, secure financial solutions. Whether you’re a fintech enthusiast or a budding entrepreneur, this episode is packed with wisdom and inspiration.

Theme 1: The transformative impact of ZIP on the fintech ecosystem

Diamond’s ZIP brings the flexibility of an interest-free “buy now pay later” consumer credit option with full integration into the checkout experience.

Diamond explains that a whopping 35% of adult Americans are underserved by traditional financial services. When a consumer is faced with a purchase outside of their basic budget, they typically have two choices: finance the sum on a credit card with a sky-high interest rate or use a debit card, draining their short-term savings. ZIP’s delayed payment mechanism brings new opportunities not only to the merchants they partner with, but also to a large consumer base in need of a credit financing solution.

With fintech players like Stripe consolidating each aspect of the checkout experience, ZIP brings an add-on that increases sales for merchants and interest-free options for their customers.

Theme 2: The importance of innovation in the digital finance space

In the years after acquiring their first customer in December 2013, ZIP found independent merchants were willing to speak with them, even as a previously unknown name in the space. Competing against the offerings of large banks was a real opportunity for Diamond & his co-founder Peter Gray to make the customer experience the true focus of their product. Banks have historically not been able to deliver that kind of dynamic, effective customer experience with their credit products, Diamond emphasizes.

As of 2024, ZIP has more than 24,000 merchants that integrate their service into checkout.

To reinforce their breakthrough as a customer-focused alternative to bank products like credit cards, ZIP seeks out a continuous stream of customer feedback. Twenty customers come in quarterly to tease out pain points and give feedback for ongoing product tweaks.

Diamond emphasizes that a dynamic product — one that responds to constantly changing customer preferences — is absolutely critical in fintech.

Diamond clarifies that banks are not the enemy, however, but rather important providers of the capital and infrastructure that their service relies on. ZIP as a more specific product can tailor their approach to adjust to new customer needs by quarter.

Theme 3: Larry’s advice for budding entrepreneurs navigating the enterprise SaaS sector

Founders in enterprise SaaS must not be afraid to sell a product that isn’t quite ready to use. Having early confidence in the founding team’s ability to build out the product as customers sign on is a crucial part of getting an enterprise SaaS idea off the ground.

Diamond and his team had to “cut their way out of the jungle” by reverse-listing ZIP on ASX, the Australian stock exchange, by buying a publicly-traded mining company. In a crucial moment when they needed cash to continue, ZIP’s founding team had to think out of the box and push forward, despite being unable to meet some minimum requirements for ASX IPO listings. At this stage, ZIP only recorded $30,000 monthly in revenue, with only a few thousand customers. Believing in the product and its potential to grow exponentially punched ZIP’s ticket into the astronomic growth it has since seen, completing rounds at 5M, 20M, 40M, 80M, and finally 160M in venture funding.

No matter a founder’s belief in the product and business, teams must avoid being “too proud” to re-imagine early prototypes. ZIP did not launch well into fashion stores and had trouble securing fashion merchants midway through their scaling. Long-term success may not be well predicted by the first merchants a SaaS startup approaches — Diamond encourages founders in early days to constantly reconsider how their target market is changing to have a continuously effective product.

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