Leaked numbers show hot finance startup Curve struggled with active users before crowdfunding $7.7 million on the promise of big growth

Curve

Shachar Bialick CEO and founder of Curve

• Buzzy UK finance startup Curve broke records when it raised £6 million ($7.7 million) through crowdfunding in September - but faced criticism from investors for its 'lack of transparency' about revenue, active users, and other financial information.
  
• Curve allows users to group all their bank cards into a single, physical smart card and is one of several new UK players hoping to disrupt how people manage their finances.
• During its September crowdfunding campaign, Curve said it would reach four million customers by the end of 2020 but didn't say how many people use its product on a regular basis.
• Leaked numbers from May obtained by Business Insider indicate that just 14% of Curve's approximately 500,000 customers were using its product every month.
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Curve, the buzzy finance startup which lets users group all their bank cards into a single smart card, raised millions in crowdfunding money earlier this year, but leaked data obtained by Business Insider shows the company has struggled to keep users engaged.

The self-described "Spotify of money" is an emerging player in London's highly competitive fintech scene, where a cohort of buzzy challenger banks have made it their mission to revolutionize personal finances. Last year, the city led European investment with more than $3.3 billion being invested solely into UK finance startups, according to February data from Innovate Finance.

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Curve was launched in April 2018. In July this year, the startup was valued at more than $200 million after being backed by the likes of Santander and Seedcamp.

Two months later, the firm turned to crowdfunding to boost its coffers and broke records on Crowdcube, an online investment platform, when it raised £6 million ($7.7 million) in five hours, through the highest number of investors the site had ever seen (9,591) on a single campaign.

But while Curve publicly claims to have "more than half a million customers,'' the company's internal metrics paint a very different picture.

Curve

A slide from Curve's crowdfunding pitch deck, projected growth to four million customers in 2020.

Data shared with Business Insider by two sources and dating from May this year suggested just 72,000 of Curve's 500,000 customers used their card once a month or more. In other words, only 14% of Curve's 500,000 customers are monthly active users.

Monthly active users (MAUs) are calculated by measuring the number of unique users who engage with a product each month.

The company has never shared its user numbers publicly but it is understood the stats were readily available to employees internally.

Curve's investment deck, shared with those who contributed to it through Crowdcube, was previously described as "opaque" by the Financial Times. It did not contain any KPI data or information about expected revenue or profit margins. It did contain optimistic projections about customer growth, however, suggesting the firm would have 4 million customers by the end of 2020 - with very little data to back this up. The pitch deck is not available publicly, but was shared with investors.

At the time, Curve told the Financial Times that it wasn't required to hand a detailed prospectus to crowdfunding investors, per UK financial regulation.

Two sources close to the company insisted the MAU figure for May was "closer to 80,000", or 16% of its 500,000 customers.

Either figure is a downgrade on the 500,000 customer figure publicized by Curve, and suggests the startup has struggled to achieve the kind of "stickiness" enjoyed by other fintech startups.

Monzo, the popular UK challenger bank founded in 2015, told us 73% of its 3.3 million customers use their card once or more a month. Rival Revolut said half of its 9 million customers do the same globally.

One anonymous Crowdcube backer, who told Business Insider they had invested a four-figure sum in Curve's campaign, described the data as "not good". They added: "It's one thing to convince VCs to back your vision [because] they get to have a proper look under the bonnet. But it's quite another to get thousands of ordinary people to hand over their money without giving them the full story."

Some investors sought greater transparency from Curve via its online message board but received no answers. "I have a billion questions I want to clarify," wrote one. "Curve has barely answered any or given any information."

Another said: "I'm probably going to pull my investment. No transparency in the whole process. Not a good sign of things to come."

A third complained at Curve's lack of detailed response.

Sarah Kocianski, head of research at 11:FS, a consultancy specialising in digital finance, said: "It is widely understood within the fintech community that the stated customer numbers can be a bit useless.

"When thinking about investing in a business, I would want to know what its profits and revenues look like, especially if they have already been going for a few years, as opposed to a Kickstarter venture where you just like the sound of an idea.

"If you want to gain and maintain the public's trust, it's good to be as transparent as possible. Monzo has done crowdfunding in the past and has a good track record of accountability, going so far as to publish an annual report which goes into more detail than is legally required of them."

Curve did not respond to repeated requests for comment.

Crowdcube, when approached for comment, pointed us to Curve's fundraising page and directed us to the company for comment.