London fintech Paddle could face government lawsuit as losses widen – UKTN

Paddle has been accused of violating consumer protection laws as the London fintech reported a jump in losses.

The London fintech said it had received a draft civil complaint and proposed settlement offer from a government agency alleging violations of consumer protection laws in connection with its oversight of two third-party software suppliers from September 2017 to July 2023. The firm did not identify the government agency or the size of the proposed settlement.

Paddle said it was “in active discussions with the government agency in an attempt to resolve the claims and believes it has strong defences to the claims,” adding it was prepared to defend the claims in court if a resolution was not achieved.

“We do not have sufficient information to express a judgment about the likelihood of an unfavourable outcome in this matter; nor can we predict the potential amount of loss or range of loss in this matter,” Paddle said. The revenue earned from the suppliers during the period was £1.1m.

In its 2023 accounts, which were published several months late, the fintech posted a loss of £44.4m, a jump of 20% compared to the previous year, while revenues rose 17% over the period to £57.3m.

Paddle said it had at least £68m of cash available to support the continued operation of the business. The firm also has access to a $25m rolling credit facility with HSBC Innovation Bank.

Paddle said it spent the year “focused on improving the company’s offerings for SaaS businesses while continuing to evolve its checkout and invoicing solutions.

“Improvements in the company’s billing and subscription management functionality were made to align with the expectations of its target MoR suppliers. Work on the company’s checkout functionality included adding multiple new payment currencies, localisation of payment options and increased diversification of the company’s payments stack.”

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