"You have to focus everyone on one thing" - An interview with Curve CEO Shachar Bialick
The founder says his company is focused 100 percent on forging a path towards profitability but thinks 2023 could be the year when many other fintech firms finally close-up shop.
Israeli fintech Curve has certainly had an interesting year. On one hand, the 'all-your-cards-in-one' banking app, made 60-70 people redundant in July, joining other flagship fintech firms like Klarna in cutting numbers amid mounting fears of a coming recession.
On the other hand, the firm launched in the US in March 2022, a region where many other EU success stories have failed to establish any meaningful market share, taking the $95m of funding it raised in 2021 with it.
However, despite posting widening losses in its latest report, which grew to £37.9m in 2021 from £28.5m in 2019, Curve founder and chief executive Shachar Bialick believes that now is the time for the company to pivot toward profitability, something which the company has supposedly been entirely focused on from May 2022 onwards.
“The leadership team made a decision to change direction from growth at all costs, which is what the market previously wanted, into establishing profitability as soon as we can,” said Bialick. “We’ve put a full plan into place about how to get there.”
He added: “We’ve hunkered down and reduced our workforce. We’ve focused more, and we’re doing fewer things because we have fewer people.”
Curve is currently single-mindedly focused on this new goal according to Bialick, though it will still be working towards other metrics such as growing its customer base and engagement, and this level of focus will be the key to success according to the CEO.
“As a company, you want to focus your people on ideally nothing more than one matrix, your “Northstar”.
“You have to focus everyone on one thing sequentially, you only have one priority, and you don't have priorities one, two, three, and four.”
He added: “It's kind of like in the military or if you play video games, you have a primary objective, and then you have a secondary objective - it's always sequential.”
Bialick then touched on how fintech firms seeking to break America can’t just blindly assume the same business models which proved successful in Europe or the UK will also be successful in the US.
He attributes some of this trend to the quality of incumbent banks such as Citi, Chase, Wells Fargo, and Bank of America, which he feels already provide “good apps” and “good service”.
Bialick claims that Curve has reviewed every part of its proposition - including its messaging, positioning, product value proposition, market segments, and pricing - for its suitability in regard to the unique considerations of the US market.
“Everything is different in the US,” he said. “That forced us to find gaps between the offering that we have in Europe and the UK”.
“Revolut failed because most Americans don't even hold a passport, they aren’t impacted by FX fees because they hardly travel outside of the US.”
“Those who do travel outside of the US have a card from the likes of Chase, which doesn't really charge that much in terms of foreign exchange fees.”
Bialick then pointed to how his hiring strategy has supported this America-focused customer offering, pointing to the 2019 hire of Curve US CEO Amanda Orson, an ex-special forces operative who had previously been managing partner of media group W2PY.
Despite a “more focused” workforce, Bialick predicts his firm will continue to keep on hiring in certain areas such as product engineering.
He thinks now is “the perfect market” to hire because of the significant number of recent layoffs within the technology industry.
In addition, Bialick said Curve is also hiring for some supporting activities including financial compliance, alongside customer experience (CX) and other visual roles.
In terms of specific talent pools, he pointed to some of the “remarkable talents in the UK”, saying that talent “is one of the biggest strengths of the UK in our view, thanks to the education system”.
In September, the card consolidator launched a new crypto rewards program which meant that when one of the underlying payment cards already earns crypto rewards, customers can then "double dip" and earn crypto rewards on both cards at the same time.
However many firms offering customer crypto cards haven’t had the best year, to say the absolute least, with FTX folding in early November in one of the biggest business stories of the year and BlockFi declaring bankruptcy last week.
Despite the wild time that the crypto scene has experienced in recent months, the underlying technology is definitely something that Shachar still believes in, saying that he believes crypto and DeFi are “here to stay”.
However, he’s not a fan of how the technology has necessarily been implemented in practice.
Shachar says he was always critical of a “man in the middle” centralised approach, which was exemplified by a company like FTX in the words of Shachar, saying this did not really meet the “objective or the real intent of blockchain”, throwing shade at some of the centralized players in the space.
As a result of these criticisms, Curve is now being especially selective regarding which cryptocurrencies it incorporates into its ecosystem.
“The approach we've taken is that if the cryptocurrency is not validating a network, it's a shit coin that gives you Ponzi scheme returns.”
Though Shachar is optimistic about his own firm's future, the same can’t necessarily be said about other firms in the same industry.
He is particularly pessimistic about the fate of neobanks in particular, saying that other than taking deposits, today you can do anything “that a bank does without a banking license” and “for a bank model to work you have to take deposits and leverage them into the market”.
The CEO then broke down how he foresees their business model crumbling: “Largely speaking, 70% of revenue from banking is from lending and 30% of revenue is from fees."
“Fintech killed fees,” Shachar explained, “So the only way to make money in banking now is through lending."
“Therefore, if there's no neobank that is able to lend at scale, with very good margins and net revenue, the model is set to fail.”
Bialick predicted we will see many neobanks going on sale in Europe and the UK, potentially alluding to the recent failure of some Australian and US neobanks, such as Australian bank Volt.
Though it’s hard to predict the success of any firm in the current uncertain economic environment, particularly one that depends on healthy levels of consumer spending. That being said, Curve does seem to have a clear vision of how it can pivot toward sustained profitability and expand its horizons outside of its core European market.