Zilch, a prominent London-based fintech, has reported its first operating profit in July. This significant milestone sets the stage for an anticipated stock market debut.
With revenues surpassing $130 million in the same month, Zilch’s impressive performance highlights its potential as a key player in the fintech industry.
Achieving Profitability and Revenue Milestones
Zilch has reached a pivotal moment by reporting its inaugural operating profit since its establishment four years ago. In July, the company saw its revenue run rate exceed $130 million (£100 million), although specific profit figures for July were not disclosed. Nearly doubling its revenue for the financial year ending March 2024, Zilch recorded an impressive increase from the £30 million revenue documented in the previous year.
Valued at $2 billion (£1.65 billion) as of October, Zilch’s swift transition to profitability places it alongside top European fintech firms including Revolut, Starling Bank, and Monzo. In light of the heightened pressure on UK fintech companies to achieve profitability following the peak in valuations and a downturn in investments post-2021, Zilch’s achievement is noteworthy.
Strategic Growth Amid Market Challenges
Amidst a challenging market environment, multiple UK fintech entities have recently reported their first annual pre-tax profits, among them Atom Bank, Monzo, Clearbank, and Zopa. Concurrently, firms like Starling and Revolut have also enhanced their profitability.
CEO Philip Belamant stated, “This milestone fundamentally changes the game for us. Profitability is something that a lot of fast-growing businesses are struggling to achieve, and I am hugely proud of the team for reaching this mark, ahead of plan.” Belamant highlighted that while other companies have resorted to cost-cutting measures, Zilch has managed to double its revenue annually, expand its team, and substantially benefit its customer base.
Innovative Market Approach
One of the UK’s largest BNPL providers, Zilch distinguishes itself by offering a unique product. The company provides a card enabling consumers to spread payments via debit or credit over six weeks or two months, interest-free.
This approach contrasts with other BNPL firms that typically utilise a checkout button. Zilch’s innovative strategy not only aids consumers financially but also generates substantial new sales for merchant partners through its ad-subsidised payments network.
As a testament to its success, Zilch has saved its four million customers over half a billion dollars in fees and interest costs, while generating over $3 billion (£2.3 billion) in new sales for merchants.
Anticipated Stock Market Listing
Zilch is preparing for a highly anticipated stock market listing, potentially within the next year. CEO Belamant mentioned that the location for the IPO has yet to be finalised, with discussions ongoing with Nasdaq, the New York Stock Exchange, and the London Stock Exchange.
A successful listing in London would be particularly significant, given the city’s recent challenges in attracting high-profile tech IPOs. Zilch’s potential IPO could bolster London’s standing as a prime destination for fintech offerings.
Belamant, who also co-chairs the Innovate Finance “Unicorn Council”, has been actively involved in policy recommendations to the UK government to enhance London’s appeal for fintech flotations.
Board Expansion with Industry Leaders
In line with its growth and strategic ambitions, Zilch has announced the appointment of ex-Aviva CEO Mark Wilson to its board as a non-executive director. Wilson also holds a directorship at BlackRock, the world’s largest asset manager.
Wilson’s extensive experience in the financial services sector is expected to provide valuable insights and guidance as Zilch navigates its growth trajectory towards a public listing.
This appointment reflects Zilch’s commitment to strengthening its leadership team with seasoned professionals capable of steering the company through its next phase of development.
Strong Competitive Position
Zilch competes in the BNPL market with notable firms such as Klarna and Clearpay. Despite the intense competition, Zilch’s innovative approach and strong revenue performance have solidified its market position.
By offering flexible, interest-free payment options, Zilch continues to attract a growing customer base, which in turn drives its revenue growth and market presence.
The company’s focus on customer savings and innovative solutions places it in a favourable position to capitalise on future market opportunities.
Future Outlook
Looking ahead, Zilch is poised to take advantage of its strong financial foundation and market position. The anticipated IPO will likely provide the capital needed to further expand its services and innovation in the fintech sector.
With its proven track record of revenue growth and a clear strategic vision, Zilch is set to make a significant impact on the global fintech landscape.
In conclusion, Zilch’s achievement of operating profit and its strategic preparations for a stock market listing mark significant milestones for the company.
As it continues to innovate and expand, Zilch is well-positioned to strengthen its market presence and drive future growth in the fintech sector.