Zilch books quarterly profit and readies hiring spree as IPO looms

Buy-now pay-later (BNPL) firm Zilch has booked its first quarterly profit and is planning to double headcount over the next 18 months as it gears up for a much-anticipated stock market float.

Speaking at a conference today, chief executive Philip Belamant highlighted Zilch’s expansion in the UK when addressing speculation over which market the London-based payments firm will choose for its planned IPO next year.

“We’re a British business. We’re born here, the headquarters is here, we’re going to be doubling the size of the staff – we’re hiring more than 400 people over the next year and a half here in the UK – and our customer base today is here,” Belamant told the summit, organised by Innovate Finance.

“So we think wouldn’t it be fantastic for businesses to list here. We think that is the right thing.”

While a UK float for the $2bn (£1.65bn) firm would come as a major boost to the bealeagured London Stock Exchange, Zilch has also held talks with the Nasdaq and New York Stock Exchange, which offer deeper pools of capital for tech firms.

Belamant said Zilch had discussed the capital’s stock market “extensively” with new City minister Tulip Siddiq and the LSE. “It’s been brilliant to see they’re not just talking about certain things, there’s action,” he added.

The government and regulators have made urgent efforts to inject more life into Britain’s capital markets amid a dearth of IPO activity, including an overhaul of the FCA’s listings regime in July.

Belamant cited Labour’s move to take forward the Conservative-born Private Intermittent Securities and Capital Exchange System (Pisces), a scheme for UK private firms to have their shares traded on exchanges.

Still, he warned that British businesses needed more incentives to list in London.

“It really does come down to policies,” Belamant said. “We need liquidity in the stock market, we need pension funds to be buying British companies and holding those companies, and we also need to incentivise the public to buy more British stocks.”

Think tank New Financial has found the proportion of assets that UK pension funds allocate to British stocks has fallen to 4.4 per cent, down from more than half of their assets 25 years ago.  That puts the UK among the lowest of any developed pension system around the world.

Belamant is a member of Innovate Finance’s “Unicorn Council”, which launched earlier this year as a vehicle for public policy recommendations. In April, the group urged the government to ditch its contentious tax on share trading.

“Why are we charging someone stamp duty to buy a British stock, but not stamp duty to buy an overseas or American stock?” Belamant said. “Those are the types of things we need to talk about to incentivise companies to stay and list here.”

Members of the “Unicorn Council”, including co-chairs Belamant and Revolut UK CEO Francesca Carlesi, met with Siddiq at Innovate Finance’s event on Thursday.

The gathering came just days ahead of Labour’s flagship investment summit next Monday, which Belamant has been invited to attend. Chancellor Rachel Reeves will then unveil the Budget on 30 October.

“We get to see, as the UK, what the outside world is thinking about some of the rumoured policies, and at least that gives government time to react and maybe tweak a few things to get it exactly right,” Belamant said.

First quarterly profit

Zilch, boasting more than 4m users, offers a card to consumers to allow them to pay via debit or credit, which can be paid off in interest-free instalments.

This model is in contrast to the “checkout button” offer of many other BNPL firms like Klarna, which allow shoppers to split their payments at the point of sale.

The firm announced in September that it had recorded its first monthly operating profit in July and surpassed a revenue run rate of $130m (£100m) in the same month. It did not disclose the size of the profit.

“In July, we printed our first profit, which was great. We doubled that thereafter, so we’ve just printed our first quarter of profit,” Belamant said on Thursday.

He added that Zilch had saved customers £500m “and counting” in fees and interest since launching in 2020.

The firm is “doing something between two-and-a-half, three thousand transactions a second” at peak volume, Belamant said.

In September, Zilch revealed the appointment of Mark Wilson, former CEO of insurance giant Aviva, to its board as a non-executive director.

Wilson’s other boardroom positions include a directorship at BlackRock, the world’s biggest money manager.