Zilch triples revenue as BNPL provider gears up for IPO
Buy now pay later (BNPL) provider Zilch has almost tripled its revenue as it lays out a path to bottom-line profitability ahead of a possible IPO in 2024.
Company filings for the year ended 31 March 2023 show that Zilch’s revenue increased by 173% from £11m the year prior to £30m.
The surge in revenue, credited by CFO Hugh Courtney to a significant increase in Zilch’s gross merchandise value as well as reductions to cost of sales, were not enough to put the company in profit.
Total losses reached £71.7m, marginally down from last year’s loss of £78.3m.
Courtney, however, remained confident the company is on the right track and that it has a “clear path to profitability” for next year.
CEO Philip Belamant said that the end of 2023 marked the conclusion of the second phase of Zilch’s history, categorised as the phase of optimisation and maintenance after phase one – from 2020 to 2022 – which he described as innovation and growth.
Belamant said a major focus for 2024 would be delivering “profitable growth”.
According to the report, Zilch finished last year with 2.5 million customers and 12 months later grew to more than 3.35 million registered customers.
Zilch eyes IPO
The detailed outlining of the company’s financial position, complete with a full auditor’s report, give the firm’s accounting a clean bill of health from US-based auditor Grant Thornton.
The financials come as Zilch has been preparing for an initial public offering. In August, Belamant confirmed the company was “seriously” considering a float as it opened trading at the London Stock Exchange.
The preferred destination for an eventual IPO remains unknown. If the fintech does opt to list in a destination like New York, it would mark another blow to the London markets, which have been struggling to convince UK tech firms to list with them.
Zilch was valued at £1.65bn in October after it was revealed that it had received an equity investment from ecommerce giant eBay.
This week, Zilch’s Swedish rival Klarna confirmed it was taking steps toward an IPO after it established a UK-based holding company, spurring rumours of an upcoming float.
Klarna and Zilch both provide BNPL services that split the cost of purchases into regular payments. Regulators in the UK have moved to bring the market under stricter regulation, in line with similar debt products.
The government has outlined a proposal for BNPL regulation, however, it has yet to pull the trigger due in part to fears of a market backlash.