British financial technology company Zilch recently announced a significant achievement, reporting its first-ever month of profit. This accomplishment represents a pivotal moment for the company as it sets its sights on an eventual initial public offering. Zilch, a major player in the buy now, pay later sector alongside competitors like Klarna and Block, disclosed that it achieved an operating profit in July 2024. Remarkably, this milestone was reached within four years of the company’s establishment, outpacing the timelines of other prominent consumer fintech firms that have also achieved profitability.
In comparison to its rivals, Zilch’s journey to profitability has been faster. While Starling and Monzo took more than three and four years, respectively, to reach their first profit, others like Revolut managed to break even just two years after launch. This demonstrates Zilch’s ability to navigate the competitive landscape and drive results efficiently within a relatively short timeframe. Additionally, Zilch revealed that it surpassed £100 million ($130 million) in annual revenue run rate, marking a significant increase from the previous year’s figures.
Philip Belamant, CEO and co-founder of Zilch, highlighted the firm’s strategic approach to achieving profitability amidst the current high-interest rate environment. Unlike many VC-backed companies in the fintech space that resorted to cost-cutting measures, often leading to financial difficulties, Zilch prioritized growth as the key driver of its success. Belamant emphasized the importance of sustaining business expansion as a means to profitability, distinguishing Zilch’s approach from its peers in the industry.
In a separate announcement, Zilch welcomed former Aviva CEO Mark Wilson to its board as a non-executive director. Wilson expressed his enthusiasm for joining Zilch at a crucial juncture and contributing to the company’s journey towards sustainable leadership in its category. Looking ahead, Zilch’s CEO Belamant outlined plans for a potential public listing within the next 12 to 24 months. This aspiration aligns with the company’s recent financing activities, including a $125 million debt financing deal with Deutsche Bank, which positions Zilch to leverage up to $315 million in credit for expanding its sales volumes in the coming years.
Zilch’s progress coincides with developments in the broader fintech market, where competitors like Klarna are also eyeing stock market debuts. Klarna’s CEO Sebastian Siemiatkowski hinted at a possible IPO in the near future, adding to the competitive dynamics in the sector. As Zilch continues to strengthen its position and expand its market presence, the company faces both opportunities and challenges in a rapidly evolving financial technology landscape.
Zilch’s achievement of profitability and revenue growth underscores its resilience and strategic focus in a competitive market environment. By prioritizing sustainable growth and operational efficiency, the company has positioned itself for long-term success and potential capital market opportunities. As Zilch advances towards its goals of an IPO and continued expansion, its performance will be closely watched within the fintech industry for insights into innovation and value creation.