British financial technology firm Zilch on Tuesday reported its first-ever month of profit, marking a key milestone for the company as it looks toward an eventual initial public offering.
In a trading update, Zilch, which competes with the likes of Klarna and Block in the buy now, pay later space, said that it made an operating profit in July 2024, hitting profitability within four years of its founding date — faster than other major consumer fintechs that have also managed to break even.
Competitors Starling and Monzo, meanwhile, took more than three and four years to make their first profit, respectively. Others have managed to hit profitability faster. Digital banking startup Revolut, for example, broke even for the first time just two years after its launch.
Zilch also said it topped £100 million ($130 million) in annual revenue run rate, doubling from the run rate it reported last year.
Philip Belamant, Zilch’s CEO and co-founder, told CNBC Tuesday that, despite the current high-interest rate environment, the firm was able to hit profitability by growing its business rather than cutting back like other fintechs have done.
“If you think of the last two and a half, three years, a lot of VC-backed companies, especially high growth fintech businesses have had to cut their way to get to profitability. And some of those have actually cut so far they went bust along the way,” Belamant told CNBC’s “Squawk Box Europe.”
“It’s not been easy. And, for Zilch, we took a different approach. We looked at this and said let’s grow our way to profitability,” Belamant added.
Separately Tuesday, Zilch announced the appointment of former Aviva CEO Mark Wilson to its board. Wilson, who was made a non-executive director, said he was “excited” to join the firm at a critical juncture and “further help Zilch steer its path toward sustainable success as a category leader.”
Zilch’s CEO Belamant told CNBC in June that he wants to list the business publicly in the next 12 to 24 months. That same month, the company announced that it had raised $125 million of initial debt financing from Deutsche Bank.
That deal, which gives Zilch the option to draw down up to $315 million of credit from both Deutsche Bank and other banks, is expected to help the company triple its overall sales volumes in the next couple of years, according to the firm.
Klarna, which Zilch competes with in the U.K., is also planning a stock market flotation in the medium term, with its CEO Sebastian Siemiatkowski having previously told CNBC it wouldn’t be “impossible” for the firm to list as soon as this year.