British financial technology company Zilch reported its first monthly profit on Tuesday, marking a key milestone for the company as it moves towards an eventual initial public offering.
For transaction updates, Klarna and block The buy now, pay later fintech giant reported operating profit in July 2024, bringing it to profitability within four years of its founding — a faster pace than other major consumer fintechs that have reached breakeven.
Meanwhile, rivals Starling and Monzo took more than three and four years, respectively, to make their first profit, and other companies have managed to achieve profits sooner — digital banking startup Revolut, for example, broke even for the first time just two years after it was founded.
Zilch also said its annual revenue run rate exceeded 100 million pounds ($130 million), double the run rate it reported last year.
Zilch CEO and co-founder Philippe Belamant told CNBC on Tuesday that despite the current high-interest rate environment, the company was able to achieve profitability by expanding its business, rather than shrinking it like other fintechs.
“If you look back over the last two-and-a-half, three years, a lot of venture-backed companies, particularly fast-growing fintech companies, have had to cut costs to be profitable, and some of them have cut so much that they collapsed along the way,” Beramant told CNBC’s “SquawkBox Europe.”
“It wasn’t easy. And at Zilch we took a different approach. We took stock of the situation and said, let’s grow in a profitable direction,” Belamant added.
On Tuesday, Zilch announced the appointment of former Aviva CEO Mark Wilson to its board of directors. Wilson, who has become a non-executive director, said he was “excited” to join the company at this critical time and to “further help Zilch progress on its path to sustainable success as a category leader.”
Zilch CEO Belamant told CNBC in June that he hopes to go public within the next 12 to 24 months. That same month, the company announced it had raised $125 million in initial debt financing from Deutsche Bank.
The deal gives Zilch the option to obtain up to $315 million in financing from Deutsche Bank and other banks, which the company said is expected to triple its total sales over the next few years.
Zilch’s UK rival Klarna also plans to go public in the medium term, with CEO Sebastian Szymiatkowski previously telling CNBC it was “not impossible” the company could go public this year.
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