Zilch Declares Initial Profit as It Breaks Even

Fintech startup, Zilch has reported its first profit. The announcement of Zilch’s profitable status marks an important milestone for the fintech company as it works towards an initial public offering.

On Tuesday, the fintech startup Zilch announced operating profit for July 2024. This is the first time the company has hit profitability since its inception four years ago. According to CNBC, Zilch has hit profitability faster than most consumer fintechs that have broken even.

Against the Odds

Zilch reported a $130 million annual revenue run rate. This is double the run rate the fintech reported last year. According to the company CEO, Zilch turned profitable and grew its business despite the prevailing high-interest environment.

“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 profitability. 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,” Zilch’s Co-founder and CEO, Philip Belamant said.

Competition Landscape

In the buy now, pay later fintech space, Zilch faces stiff competition from Klarna. Just recently, Klarna launched two new products– a cashback offering and a personal checking account.

Other competitors include Monzo, Starling, and Revolut. Monzo and Starling took over four and three years respectively to realize an initial profit. This wasn’t the case for Revolut. The digital banking startup took a shorter time, breaking even in just two years after launching.

Revolut’s growth has been remarkable. Last month, the company hit the $45 billion valuation mark to become the most valuable fintech startup in Europe. Revolut realized this major milestone just weeks after receiving a UK banking license following a three-year struggle.

Zilch IPO

Zilch’s profitability announcement comes at a time when the company is planning to list publicly in the UK. In June, Belamant told CNBC that the startup was planning an IPO over the next one to two years.

The fintech startup raised $125 million in debt financing from Deutsche Bank the same month. This deal gives Zilch access to a maximum credit of $315 million from Deutsche Bank and other banks. This credit leeway allows Zilch to triple its overall sales in the coming years.

Zilch’s rival, Klarna is also planning to list on the UK stock market in the medium term. Zilch appointed ex-Aviva CEO, Mark Wilson as a non-executive director. Wilson expressed excitement to join the fintech startup and committed to steer it towards sustainable success.