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Zilch eyes London IPO as fintech firm edges closer to profitability

Zilch CEO Philip Belamant (Zilch )
Zilch CEO Philip Belamant (Zilch )

Zilch is exploring options for an initial public offering, including talks with the London Stock Exchange, as the Victoria-based fintech edges closer to profitability.

CEO Philip Belamant told the Standard the Buy Now, Pay Later firm has had conversations with officials from the London Stock Exchange as well as the New York Stock Exchange and the US-based Nasdaq, with a decision on where to list yet to be taken.

“The steps we’ve seen the LSE take plus action from government over regulatory policy has been encouraging to see,” he said.

“We think about liquidity, policy and perception, as well as what’s best for our stakeholders and if the LSE can deliver on those things then we’re excited to talk about that.”

Zilch execs made an appearance at the London Stock Exchange today after being invited to open the London market to celebrate the fintech firm’s third anniversary, in signs the British exchange was the frontrunner for the fintech’s IPO ambitions.

The company revealed it had passed the threshold of 3.5 million registered customers, who have now spent more than £1.5 billion through the platform, collecting some £300 million in rewards and savings.

Zilch execs made an appearance at the London Stock Exchange today to celebrate the fintech firm’s third anniversary (Zilch)
Zilch execs made an appearance at the London Stock Exchange today to celebrate the fintech firm’s third anniversary (Zilch)

Belamant said Zilch was now months away from hitting profitability.

“We expect during the course of next year we will reach that milestone -- so the question is what our corporate finance strategy is and what is the timeline for that,” he said.

“Is there an appetite to push that timeline out to grow in other markets faster or is there an appetite to hit that milestone sooner? We need to see how the market plays out.”

It comes as Buy now, pay later business Klarna today hailed a return to in-month profitability as shoppers turn to its credit products amid inflationary pressure and high interest rates.

Revenue increased by 17% YoY to SEK 5.5bn (£400 million) in the first six months of the year, with retailer revenue increasing 23% in the same period, as Klarna welcomed new merchant partners including Airbnb Selfridges and Uniqlo.

Klarna CEO Sebastian Siemiatkowski said: “Some claimed Klarna would face difficulties in the tough macro-economic climate with high interest rates, but having led the company through the 2008 financial crisis I knew we had a strong and resilient business model to see us through.”

Last year, the fintech saw its valuation plunge 85% from its 2021 peak after a fresh funding round, in signs short-term lenders were being hit by rising interest rates.

Klarna said the valuation drop was “on par with its public peers” which were “down 80-90% vs peak valuations.”

The company completed a round of layoffs last year, and recently cut a further 250 employees in Germany and Sweden in a bid to outsource workers and cut costs, according to news website Sifted.

But Belamant said a fall in valuations in recent fintech funding rounds was not the main obstacle to an IPO.

“I don’t think it’s necessarily the case that companies are concerned to come to market at a lesser number,” he said.

“It’s become a lot more difficult to raise capital in the private market, particularly with a view to how liquid a business becomes because the public markets have been shut.”

In June, Sutton-based fintech CAB Payments unveiled plans for an initial public offering in signs of a turnaround in activity in the capital’s stock exchange. The firm joined the exchange in early July and now has a £700 million market cap.

CEO Bhairav Trivedi told the Standard: “The big advantage of listing is the ability to access pools of liquidity should we need it in the future and give us the required recognition to better serve our customers.

“We did look at other markets but for us the LSE was the best option – we are extremely bullish for the UK economy as well as for the LSE and it is important to be close to home.”