Zilch, a leading UK fintech, has recently reported an impressive financial milestone, achieving operating profitability for the first time. This comes alongside surpassing a revenue run rate of $130 million in July, marking a significant achievement in the company’s growth journey.
The fintech company, founded in London in 2020, is on a trajectory towards further expansion and innovation, setting its sights on a potential stock market debut. The transition to profitability highlights its solid financial strategies amidst challenging market conditions.
Zilch’s Remarkable Profit Turnaround
Zilch, a London-based fintech, has successfully achieved operating profit for the first time in its four-year history. This significant milestone is coupled with a remarkable revenue run rate surpassing $130 million (£100 million) as of July, signalling a robust growth trajectory. The company has rapidly turned around its financial performance, nearly doubling its revenue from the previous fiscal year, a testament to its strategic direction and market position.
In the burgeoning fintech sector, where many companies grapple with profitability, Zilch stands out. The company was valued at $2 billion (£1.65 billion) just last October, and its swift transition to profitability places it alongside other leading European fintech firms, such as Revolut and Starling Bank. This achievement comes at a time when UK fintech firms are experiencing heightened pressure to prove their financial viability amid shifting market conditions.
A Leader Amidst Industry Challenges
As the fintech industry faces post-pandemic valuation adjustments and investment fluctuations, Zilch’s achievement is notable. It joins the ranks of peers like Atom Bank and Monzo, which have also reported pre-tax profits. Co-founder and CEO Philip Belamant proudly stated, “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.”
Unlike some competitors, Zilch’s path to profitability has not involved significant cost-cutting measures. Instead, the company has consistently increased its revenue and expanded its team. It is reported that Zilch has saved its 4 million customers approximately half a billion dollars in fees and interest costs, while generating over $3 billion (£2.3 billion) in sales for merchant partners.
Innovative Approach to Buy-Now Pay-Later
Zilch differentiates itself in the buy-now pay-later (BNPL) market by offering a card system that enables consumers to spread payments. This system allows payments via debit or credit over six weeks or two months without interest, diverging from typical checkout button systems prevalent in the industry.
This strategic move has positioned Zilch as one of the UK’s largest BNPL providers, competing directly with giants like Klarna and Clearpay. The company’s innovative approach has attracted a vast customer base and contributed to its solid financial performance.
As it eyes a potential stock market debut, Zilch continues to advance its offerings, integrating cutting-edge solutions to meet evolving consumer needs. The prospective flotation is eagerly anticipated and could further bolster its market presence, opening new avenues for investment and growth.
Anticipating a Stock Market Debut
Zilch is gearing up for a much-anticipated stock market listing, with discussions underway with major stock exchanges such as Nasdaq, New York Stock Exchange, and the London Stock Exchange. CEO Philip Belamant has expressed the company’s intent to go public within the next year, though the location of the listing remains to be finalised.
The successful public listing in London would be particularly significant, as the city seeks to attract high-profile tech flotations. This potential event underscores Zilch’s strategic plans to scale its operations and enhance its competitive position globally.
Strengthening Governance and Leadership
In a move to fortify its governance and elevate strategic oversight, Zilch appointed Mark Wilson, former CEO of Aviva, as a non-executive director. Wilson’s extensive experience is expected to provide invaluable insights, guiding Zilch through the complexities of sustaining growth and achieving long-term objectives.
With this strategic appointment, Zilch not only strengthens its leadership team but also underscores its commitment to maintaining robust corporate governance practices. This move is aligned with its broader strategy to navigate the demands of a public company post-flotation.
Positioning London as a Fintech Hub
Zilch’s plans for a public listing could serve as a catalyst for positioning London as a leading fintech hub. The company’s co-chairmanship of the Innovate Finance ‘Unicorn Council’ has already resulted in policy recommendations to make the UK a more attractive location for fintech flotations.
The potential success of Zilch’s public listing in London could attract more fintech firms to follow suit, bolstering the city’s standing as a global financial centre. This strategic positioning is crucial as London competes with other major financial hubs to attract top-tier technology firms.
Market Response and Future Outlook
The fintech firm’s successful transition to profitability and plans for a stock market listing have been met with optimism in the financial markets. Zilch’s innovative approach and strategic growth measures are anticipated to drive further expansion and investment opportunities.
Zilch’s successful turnaround to profitability and potential stock market listing underscore its strategic growth and leadership in the fintech sector. As it continues to innovate and expand, the company is well-positioned to capitalise on emerging opportunities in the financial market.
