Zilch CEO Phil Belamant.
Zero
British financial technology company Zilch reported its first ever profit on Tuesday, a major milestone for the company as it prepares for a potential IPO.
In a trading update, Zilch, which competes with companies such as Klarna and Block in the buy now, pay later category, said it made an operating profit in July 2024 and became profitable within four years of founding – faster than other large consumer fintechs that also managed to break even.
Competitors Starling and Monzo took over three and four years, respectively, to turn a profit. Others have managed to become profitable more quickly. Digital banking startup Revolut, for example, broke even for the first time just two years after launching.
Zilch also reported that annual revenue exceeded £100 million ($130 million), double the previous year.
Philip Belamant, CEO and co-founder of Zilch, told CNBC on Tuesday that despite the current high interest rates, the company has become profitable by growing its operations rather than cutting back like other fintechs have done.
“If you think back over the last two and a half, three years, a lot of VC-backed companies, particularly high-growth fintech companies, have had to cut back in order to become profitable. And some of them have cut back so much that they went bankrupt along the way,” Belamant told CNBC's “Squawk Box Europe.”
“It hasn’t been easy. And for Zilch we’ve taken a different approach. We’ve looked at this and said, let’s grow to profitability,” Belamant added.
Separately on Tuesday, Zilch announced the appointment of former Aviva CEO Mark Wilson to its board. Wilson, who became a non-executive director, said he was “excited” to join the company at a critical time and “help Zilch continue its path to sustainable success as a category leader.”
Zilch CEO Belamant told CNBC in June that he wants to take the company public within 12 to 24 months. That same month, the company announced it had raised $125 million in initial debt financing from Deutsche Bank.
The deal, which gives Zilch the option to draw up to $315 million in credit from both Deutsche Bank and other banks, is expected to help the company triple its total revenue volumes in the coming years, the company said.
Klarna, which Zilch competes with in the UK, is also planning an IPO in the medium term. CEO Sebastian Siemiatkowski previously told CNBC that it would not be “impossible” for the company to go public as early as this year.
