UK fintech Zilch increased its provisions for losses over the past year as appetite for buy now, pay later services expanded dramatically.
The London-based company elevated provisions for credit losses – funds reserved to cover anticipated losses from defaulted repayments – to £27.4m – a 116 per cent rise from £12.7m the previous year, as reported by City AM.
Credit losses as a proportion of gross merchandise value, representing the percentage of total sales the company expects to forfeit from customers failing to repay their obligations, climbed to 1.5 per cent from 1.2 per cent.
However, this occurred as registered users exceeded five million, with investment in customer acquisition climbing 62 per cent to £9.8m.
The fintech sensation earned recognition as the UK’s most rapidly expanding fintech unicorn – a enterprise valued above $1bn.
Zilch boss takes pay cut amid path to profit
While net losses continued, Zilch achieved a 79 per cent decrease to £10.5m.
This follows the fintech’s announcement in July that it had recorded its inaugural quarterly profit and exceeded a revenue run rate of £100m. The company did not reveal the profit figure.
Revenue for 2025 soared 93 per cent to £110.3m.
Philip Belamant, Zilch’s chief executive, has maintained City interest regarding a flotation over the past 12 months.
Belamant, who co-chairs Innovate Finance’s fintech unicorn council, described a London listing as “fantastic” and “the right thing” to pursue. The fintech chief accepted a reduction in remuneration as the company progressed towards annual profitability, with Belamant’s compensation package declining to just over £1m, down from £1.34m the previous year.
In October, Belamant outlined ambitious expansion plans to strengthen Zilch’s headcount by “hiring more than 400 people over the next year and a half” across the UK.
The company’s average workforce for the year increased to 255 from 235.
The UK government unveiled a regulatory clampdown on buy now, pay later services earlier this year, pledging to eliminate the “wild west” environment that had left consumers vulnerable.
The forthcoming regulations will mandate financial services providers to undertake affordability assessments as part of broader efforts to standardise banking practices under Financial Conduct Authority (FCA) oversight.
However, Zilch, which has operated under FCA regulation since 2020, embraced the development as “another steps towards improving consumer financial wellness and removing credit related anxiety for our customers.”
