Curve’s operating losses widen as pricey expansion plans take a toll

Growing your product is often an expensive endeavour and, coupled with Covid-19, can put a big dent in a company’s finances.

In its annual results, posted this morning, all-your-cards-in-one fintech Curve saw its operating losses jump from £28.5m in 2019 up to £37.9m last year—an increase the fintech puts down to growing its product offering and its team.

Taking all of the firm’s financials into account, Curve’s gross loss, (which is the revenue minus its operating costs) actually shrank between 2019 and 2020. In 2020, Curve posted a gross loss of £1.7m, up from £2.1m in 2019.

Over the course of 2020, Curve added 100 new employees to its roster—and another 130 by June 2021—meaning that its staff costs equated to half of its total operating costs last year.

The UK remains Curve’s main market, despite its expansion across Europe and into the US, with its UK operations generating nearly three quarters (73 per cent) of its revenues.

In total, Curve’s revenues jumped by 86 per cent year-on-year between 2019 and 2020, reaching £9.9m by the end of the year.

Last year was an eventful one for Curve, with the company getting wrapped up in the fall of payment processor Wirecard, an event CEO and founder Shachar Bialick aptly calls “WirecardGate”.

Bialick describes the moment the FCA suspended Wirecard’s UK operations as “an inflection point, a do-or-die situation, where acting at lightning speed and resolve to solve the problem was the only choice.”

In the wake of the collapse, Curve’s teams worked around the clock to get back online—a feat it achieved in just 60 hours. 

“In this short timeframe, we designed and implemented new systems, carried out cross-functional integration, negotiated contracts with partners, underwent required due diligence and completed customer onboarding,” he went on.

Bialick also notes that WirecardGate had a knock-on effect for Curve’s Brexit preparations, with the founder writing in the annual report that the “demise of Wirecard Bank in Germany derailed our watertight preparation to date.”

To counteract WirecardGate, Curve looked at setting up its Lithuanian base which would be home to its AML, compliance and risk management operations.

Not one to dwell on the past (or go back in time to use Curve’s own lingo), within the next few years, Curve is looking to expand its current offering into crypto, SME banking, consumer finance, wealth and insurance.

Curve is also developing the idea of becoming an “app store for money”, with plans to launch more financial products soon.

More recently, Curve closed its most successful crowdfunding to date, raising just shy of £10m from nearly 12,000 investors and earlier this month launched its own buy now, pay later offeringCurve Flex.