GoCardless, one of the fintech unicorns backed by Alphabet, has reached a new milestone toward profitability. By halving its losses in 2024 through strategic restructuring, this London-based startup specializing in recurring payment collection has clear ambitions: to achieve its first annual profit by 2026. CEO Hiroki Takeuchi is aiming for sustained growth while managing costs to reach this ambitious goal. Backed by major players like GV, Accel, and BlackRock, the company seems well on its way to turning its forecasts into reality.
GoCardless Cuts Its Losses in Half
The fintech GoCardless, backed by Alphabet, recently announced an impressive reduction in its losses for the fiscal year ending in June 2024. The company, specialized in bank direct debit for recurring payments, reported a net loss of £35.1 million, down 55% from the previous year. This remarkable performance is primarily attributed to an internal restructuring that significantly reduced salary expenses. The 15% reduction in the global workforce contributed to a 13% decrease in salary costs.
GoCardless has managed to record its first profitable month in March 2024, a significant milestone towards its projected annual profitability target by 2026. Hiroki Takeuchi, co-founder and CEO, emphasized that despite the focus on cost reduction, revenue growth also played a crucial role. With a 41% increase in revenue, reaching £132 million, this growth strategy appears to be paying off.
No Plans for an IPO
Despite the financial progress made by GoCardless, the company does not foresee going public in the immediate future. In a market where tech IPOs are at historically low levels, the fintech is closely monitoring the launch of Klarna to assess the right timing. However, many companies currently prefer to offer liquidity to their employees and early shareholders through secondary market stock sales. Learn more about the staff reductions supported by Alphabet.
Acquisition Strategy
GoCardless continues its strategy of innovation and expansion through acquisitions. In September, the company acquired Nuapay, a firm specialized in collecting and sending payments via bank transfer. Currently, GoCardless is experimenting with a new feature allowing clients to redistribute funds to their own customers. This advancement highlights the company’s ability to adapt and offer innovative solutions.
