GoCardless, a leading financial technology startup, has managed to cut its losses by more than half in 2024, with its sights set on achieving full-year profitability by 2026. The London-based company, which assists businesses in managing recurring payments such as subscriptions, reported a net loss of £35.1 million ($43.8 million) for the fiscal year ending June 30, 2024. This represents a 55% improvement from the £78 million loss GoCardless reported the previous year.
The company attributes this significant reduction in losses to a restructuring process conducted in late 2023, which involved reducing its global workforce by 15%. This decision led to a 13% decrease in salary expenses, totaling £79.2 million for the 2024 fiscal year.
However, GoCardless CEO, Hiroki Takeuchi, emphasized that the company’s financial improvements were not solely due to cost-cutting measures. Revenue growth also played a vital role. “We’re much more focused on the cost side … We want to be getting very efficient as we scale,” Takeuchi explained. “But we also need to continue growing. We need both of those things to get to where we want to be.”
In the 2024 fiscal year, GoCardless saw a 41% increase in revenue, reaching £132 million. Customer revenue contributed £91.9 million to this total. March 2024 marked a significant milestone for the company, recording its first-ever profitable month.
Takeuchi is hopeful that GoCardless will achieve its first profitable year within the next 12 to 18 months and mentioned they are “well on track” to reach this goal.
In recent developments, GoCardless acquired Nuapay in September, a company that facilitates businesses in collecting and sending payments via bank transfer. Takeuchi expressed that GoCardless is “actively looking” at future mergers and acquisitions, as “lots of opportunities come up.”
Following the acquisition of Nuapay, GoCardless is testing a new feature allowing clients to distribute funds to their customers. This feature would be particularly beneficial for sectors like energy, where customers generating power through solar panels could receive payments for the energy they contribute to the grid.
Backed by big names such as Alphabet’s venture arm GV, Accel, and BlackRock, GoCardless was valued at $2.1 billion in its last private valuation in February 2022.
Takeuchi stated there are “no plans” for an initial public offering in the near term, as the company currently has no need for external capital. This comes amidst a trend where several startups are opting to provide liquidity to employees and early shareholders by selling shares in the secondary market, as technology IPOs are at historic lows.
GoCardless declined to comment on a November report by Bloomberg that the company had chosen investment bank Lazard to advise it on a $200 million secondary share sale.
