Zilch, a London-based fintech, has adjusted its approach in the US market, focusing instead on UK growth.
- The company reported a significant increase in UK turnover, nearly doubling its revenue from the previous year.
- Strategic decisions led to ending US operations at the end of FY 2024, with plans for future expansion when conditions are favourable.
- Despite scaling back in the US, Zilch is positioning for a potential IPO, with Deutsche Bank financing supporting this move.
- CEO and CFO have outlined future product developments and profitability goals, maintaining partnerships and regulatory foothold in the US.
Zilch, a prominent player in the fintech sector, has decided to ‘curtail’ its US operations to focus on expanding its UK business. This strategic move follows the company’s remarkable financial performance, posting revenues of £57.1m, which represents a 90% increase compared to the prior year. The decision marks a shift from Zilch’s earlier plans, which were aimed at cracking the American market by establishing an office in Miami and hiring up to 100 employees.
Chief Financial Officer Hugh Courtney explained that the decision to redirect resources was influenced by the compelling and measurable returns Zilch anticipates from its UK market. He stated, “As part of our strategic decision-making, we curtailed the US operations at the end of FY 2024, preferring to invest the cash that would have been committed to operational burn and customer acquisition in the US operation into the UK business instead.” The firm retains the option to resume US operations once significant growth capital can be raised and market conditions are more favourable.
Moreover, Zilch intends to maintain its US partnerships and regulatory status while contemplating an eventual expansion. This decision underscores a calculated reversal from its aggressive US expansion strategy initiated in 2022, which included plans for a new Miami office. Such a pivot exemplifies Zilch’s adaptive strategy in response to changing market environments.
Chief Executive Officer Philip Belamant highlighted the fintech’s accomplishments as laying a solid groundwork for future profitability, noting, “The financial year 2024 marked a period of remarkable financial progress for Zilch.” With plans to introduce more diverse products across the credit spectrum, the focus remains on optimising cost structures and enhancing credit management practices. The securement of £100m in debt financing from Deutsche Bank further supports Zilch’s readiness for a potential Initial Public Offering (IPO), possibly overseas if the UK does not present an advantageous regulatory environment.
While Zilch’s profitability is within reach, as evidenced by its first month of operating profit, the firm continues to innovate in the ‘buy now pay later’ space, emphasising its commitment to providing interest-free services supported by advertising revenues.
Zilch’s strategic reallocation to UK operations amidst US curtailment highlights its focus on profitability and adaptability in fluctuating global markets.
