The founder of London-headquartered fintech Curve says it has a “strong potential” to hit profitability in 2024 after making “a substantial reduction in headcount” and improving margins across the board.
Curve, founded in 2015, is a London-headquartered all-your-cards-in-one-place fintech, with backers including IDC Ventures and Santander Ventures, the venture arm of banking giant Santander.
To date, it has raised over £200 million in equity and has a presence in 32 markets including the UK, several other European markets, and the US. It says it has more than 4.3 million users.
Curve consolidates all of a user's credit and debit cards into a single card and app, to make managing their financial life easier. It also has a BNPL product, Curve Flex, in which loans are funded through Credit Suisse.
“We have had to make substantial reductions in headcount as it was necessary to make us investable in a very difficult market, and get us closer to profitability,” says Shachar Bialick, CEO and founder, commenting on its year-end 2022 financial figures, just published.
Its financial results show that Curve’s headcount was cut by 115 employees to 315 in the year ending December 2022.
Asked what the headcount number is today, Bialick says:
“We have further reorganised, but actual redundancies have been quite rare.”
Revs up but losses widen
Its latest account shows revenues were up £7.6 million to £22.1 million in the year ending December 2022, but pre-tax losses widened from £59.1 million to £69.1 million.
Revenues growth, he said, was driven by an increase in card and interchange revenues, as user numbers increased.
On its widening losses, Curve is understood to have been impacted by more expensive transaction costs, which Curve has now reduced by amending its business model.
Bialick said once scale is reached, then losses would come down.
Striving for scale
He said:
“Curve, like many other companies, enjoys economies of scale.
“Until such scale is reached, the business unit economics are negative, thus leading to increased losses as the customer base grows.
“But once scale is reached, and the chasm is crossed, new opportunities unlock that shift the unit economics to a positive state.
“This is quite the chasm, and many indeed fail. Since the second half of 2023, Curve is running all margins positive at a healthy rate.
“Moreover, over the last 24 months, Curve has halved its operating expenses.”
On hitting profitability
On when Curve will be profitable, the founder said Curve became “gross margin positive in Q4 2022”.
He adds:
"This progress in profitability has carried forward into 2023. In particular, we have made substantial improvements in Q4 as all margins turned positive in the second half of the year.
“Since then, it has continued to improve on this trajectory.
“In addition, in September we announced that we secured an additional £58m in our Series C round, bringing the total Series C funding total to over £133 million.
“On the back of this success, Curve indeed has a strong potential to achieve profitability for 2024.”
New fundraise on horizon?
The financial figures also highlight that Curve continues to be in “advanced discussions with prospective investors, including institutional funds, strategic investors, and commercial partners.”
Are we likely to see another fundraise soon? “We cannot share additional details on that at this moment,” he says pointing to its recent Series C fundraise.
US launch on hold
Curve has an office in Brooklyn and the founder spoke about its US launch plans in 2022.
"Curve is evolving and to launch in the US is an incredibly exciting milestone for us,” Bialick said at the time.
Its US CEO Amanda Orson, appointed in 2019, left the fintech this year.
Bialick said:
“We launched in Beta last year and quickly gathered a critical mass of customers.
“We have now moved back to a waitlist while we work with these customers now to refine our offering, and focus the majority of our resources in the UK and European markets to drive profitability.”
PayPal deal
In September this year, Curve announced it had struck a deal with PayPal, meaning Curve customers can directly connect their personal or business PayPal account to Curve without having to enter account, debit, or credit card details.
“The partnership is significant for both Curve and PayPal. Importantly, Curve enables PayPal customers to spend with their PayPal account at any brick-and-mortar retailer store, effectively taking PayPal to the real world,” Bialick adds.
Lead image via Curve
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