Zilch said it has ‘curtailed’ its operations in the US in a reversal of its previous expansion strategy as the London fintech posted a near-doubling in turnover.
CFO Hugh Courtney said the company took the decision to invest more money into its UK operations, adding that it would only now expand into the US if it raised ‘significant’ growth capital. UKTN first reported on the firm’s plans to ‘pause’ US operations in March.
“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, where our returns profile is highly compelling and measurable,” Courtney said.
“We will retain optionality to expand the US operation when market conditions allow…specifically the ability to raise significant growth capital.”
Courtney added that Zilch would keep its partnerships with US vendors and would maintain its regulatory status in the country.
The move markets a reversal to Zilch’s previous aggressive plans for US expansion. In 2022, Zilch said it would open a new office in Miami in a bid to crack the American market, hoping to recruit up to 100 new employees in the country.
CEO Philip Belamant previously said: “With the cost of living going up, and with people paying billions of dollars in fees and interest, we think it’s the perfect time to us to launch a product like ours which eliminates those costs for customers but provides the same benefits.”
The company this week posted revenues of £57.1m for the year to end March, a jump of 90% compared to the previous year according to figures filed with Companies House, while pre-tax losses fell by 30% to £50.2m as the company readies its finances for a possible London IPO.
Belamant said: “The financial year 2024 marked a period of remarkable financial progress for Zilch. These achievements were driven by a combination of strategic initiatives that focused on enhancing our product offering, optimising our cost structure and improving our credit management practices.
“We plan to introduce more product with differentiated features across the credit spectrum as we build out the current offering. Our goal of achieving profitability is increasingly within reach.”
Zilch has already edged closer to hitting full-year profitability, after posting its first-ever month of operating profit in September.
The company, which provides interest-free buy now pay later services subsidised by ads, announced the milestone four years after launching.
In June, Zilch secured £100m in a debt financing deal with Deutsche Bank in preparation for an upcoming IPO.
Belamant told the Financial Times this year that should an IPO event occur, there was a strong chance it would be overseas if the Financial Conduct Authority (FCA)’s reforms did not effectively improve the appeal of London.