If this deal succeeds, the firm will boast one of the largest European fintech raises during this COVID-19-related lockdown second only to Checkout’s $150 million raised in June. Despite Curve is a banking platform, it standouts from the regular UK challenger banks by allowing users to connect many bank accounts into one smart card and app. Additionally, it doesn’t hold customer money, hence, Curve positions themselves as a piece of technology rather than a regulated bank. Nonetheless, this funding round is not expected to give Curve a unicorn valuation of $1 billion after it was previously raised at $250 million in its Series B funding round last July. Reports indicate the Curve wants to use the acquired funds to propel its international expansion. The fintech company launched in the UK in 2018. But, it has slowly started to expand into Italy, France, Spain, Poland, Germany, and Portugal. In the meantime, it has a small office operating in the United States although there is no definite timeline for its customer launch in that market. Investors hope that the company can now focus on new revenue channels.
Revenue
Today, Curve generates revenue from small interchange fee when a client uses their card. It also makes money from a subscription fee for its premium offering, as highlighted by Sifted. A 2019 report alleged that only 14% of Curve’s 500,000 customers were actively using their card. The company has, however, declined to comment on its ‘monthly active users’ statistics. Declines in retail spending and the lockdowns might have also dampened user activity. These activities were also worsened by a short suspension in operations in July due to the Wirecard chaos. Curve’s premium offering has been criticized for only attracting a limited audience of elite, frequent travelers with card-jammed wallets. Nevertheless, the fintech’s key value proposition may come from the data it gets from aggregating users’ cards. This startup also unveiled a B2B-style partnership in July. It partnered with Samsung Pay to support the phone provider’s efforts to get on par with Apple and Google Pay.
Unexpected Money
Experts believe that a £120m fundraiser would propel Curve to a similar funding roadmap to Revolut digital bank. Revolut got a $250m Series C in 2017. Comparably, Monzo raised about £19.5m in its Series C round. But, Shachar Bialick, Curve’s chief executive said in 2019 that the firm can manage with significantly less funding. Bialick hinted that his firm is more cost-efficient compared to his fintech peers. He added: This change in funding strategy may have been caused by the uncertainty of the current health crisis that has dampened investor appetite in the United Kingdom. Investment in the British fintech space in the first half of this year plunged by 39% year-on-year. Bialick might now be seeking to enhance Curve’s war chest prematurely. He might be aiming to hedge against the future retreat in capital and secure the company’s ambition to grow into the ‘Spotify of banking’.
