Zilch says its planned acquisition of Fjord Bank is “not about banking”, telling Payment Expert the deal is a strategic route to passport licences.
Zilch has signed an agreement to acquire Lithuania-based Fjord Bank to accelerate its European expansion.
The London-based fintech will purchase 100% of Fjord Bank, a profitable challenger bank with around $120m in total assets which is fully authorised and regulated by the Bank of Lithuania and the European Central Bank.
The acquisition, announced on January 8, gives Zilch a European banking licence, enabling the company to passport its credit and payments services across multiple countries efficiently while expanding its product offerings.
“This is a defining moment for Zilch as we build a platform that will power our international expansion,” said Philip Belamant, Co-founder and CEO of Zilch. “Not only does the deal give us a strong, trusted and fully regulated banking presence in Europe, but it represents a coming together of shared visions.”
Last year was a monumental year for Zilch, during which it raised over $175m in debt and equity funding, surpassed $200m in annual revenue, secured a second Financial Conduct Authority (FCA) payments licence, launched its Zilch Intelligent Commerce AI product and passed 5.5m registered customers.
However, with this deal, 2026 is looking to be even more significant for Zilch than last year, as it adds a fully regulated, profitable challenger bank to its portfolio, establishing a European hub in Vilnius.
Launched in 2021, Fjord Bank is a relatively young and small institution, with around $120m in total assets, which has quickly built a reputation for digital-first, consumer lending and savings products.
Despite its smaller size compared with legacy European banks, Fjord has been on its own growth trajectory mission and feels the deal will help it realise its potential.
“Having established the business and successfully scaled it, the time is now right to become part of a bigger mission,” said Fjord CEO Veiko Kandla.
“Joining Zilch provides the perfect opportunity to accelerate growth, expand our product set and reach millions more customers without compromising our consumer-first values.”
The transaction is expected to complete in the second half of 2026, subject to regulatory approval.
Why Zilch says the deal is “not about banking”
While the acquisition gives Zilch a European banking licence, the company has made it clear that the move is not about becoming a traditional bank. Speaking to Payment Expert, a Zilch spokesperson explains the deal is a strategic way to accelerate the rollout of its payments and consumer finance offerings across Europe.
“We have always owned our credit lending licence. It’s core to what we do and allows us to tailor every part of our customer experience,” the spokesperson says.
“For Europe, we wanted to replicate this model. However, regulatory credit licences are not passportable, meaning individual applications must be made in each country. Operating as a bank allows you to passport all services rapidly.”
Despite the main aim being to obtain licences swiftly, the spokesperson stressed the company did not rush in finding the right partner who aligned with its product philosophy and regulatory standards.
“Leaving us the challenge of finding a bank with a similar customer centric vision, a bank without legacy issues, that was digital and with talented people, and we have found that in Fjord. These key elements are what made the transaction so attractive to us,” says the spokesperson.
A pattern is forming
Zilch’s acquisition of Fjord Bank illustrates a trend in the fintech sector, where startups are looking to buy regulated institutions to accelerate expansion and bypass lengthy licensing processes.
Speaking to Payment Expert to explain the strategy, Seb Johnson, Founder at Scaling Europe, says acquiring a bank is increasingly seen as the fastest way for fintechs to secure local banking permissions across multiple jurisdictions. He noted this is because traditional licensing processes can take years and differ significantly between regulators, making acquisitions a more predictable route into new markets for firms.
Reflecting on how this strategy is already playing out across the sector, Johnson points to several recent examples.
He notes Revolut has been in talks to acquire a Turkish bank as it seeks additional local permissions in addition to its Lithuanian banking licence. Meanwhile, in the US, both Revolut and Starling Bank have explored acquiring smaller, regionally regulated banks to gain direct access to the market, where securing a licence through traditional channels has proven difficult.
Similar approaches have also emerged in Latin America, including Nubank’s acquisition of a Mexican bank to accelerate the rollout of savings and lending products.
When asked whether there are risks associated with this acquisition-led approach, Johnson said it remains too early to know.
“I think it’s too early to be able to know what risks may arise as this is a relatively novel approach for startups. It certainly seems to be the fastest way,” he says.
Zilch, however, is clear the transaction is a strategic enabler rather than a shift towards traditional banking.
“This deal is not about banking, but a way to passport into new markets to accelerate our offering across Europe,” the Zilch spokesperson says. “We remain focused on scaling a new generation of consumer finance across Europe, just as we have done in the UK.”
