Losses more than doubled at Irish-based fintech firm CurrencyFair last year despite a sharp rise in turnover, as increased investments in the company’s technology platform and staff numbers hit the bottom line.
Recently filed accounts show the company, which raised €8 million a year ago to fund further expansion, recorded a €8.2 million loss for the 12 months ending June 30th, 2016. This compares with a €3.3 million loss a year earlier.
Turnover for the firm rose 42 per cent to €6.3 million from €4.4 million as the company recorded a gross profit of €5.79 million, up from €4.4 million a year earlier.
CurrencyFair was founded in 2009 by Brett Meyers. It provides a money-exchange platform to consumers and businesses that aim to help users avoid large charges for exchanging foreign currency. Its average fee is 0.38 per cent, compared with 2-5 per cent for other services.
The latest accounts show administrative expenses ballooned to €14 million from €7.8 million last year as staff numbers rose to 79 from 42. Employee-related costs increased to €5.6 million from €3 million.
Revamped platform
CurrencyFair, which is headquartered in Dublin, has raised almost €25 million in investment since it was founded.
Although much of the company’s income still derives from individual users, it has been increasingly targeting business users of late. Last month it revamped its currency platform to enable SMEs to use the service.
CurrencyFair, which in early 2014 became the first platform in the world to break the $1 billion (€916 million) barrier in money-matching transfers, has also beefed up its management team in the last year, with Richard Rose, the former head of online domestic appliance retailer AO World, coming in as chairman.
Paul Byrne, a former Trintech chief executive who has scaled three successful software businesses, took over as chief executive of the company in November as founder Meyers moved to become its chief strategy officer.
“The original management team spent a lot of capital building out the infrastructure to take CurrencyFair forward to the next stage of growth, rather than spending heavily on marketing. The new management team led by me is now focused on scaling the business quickly and making it profitable and we’re in a very good position,” said Mr Byrne.
Consistently grow
He said his objective is to consistently grow the business between 30 per cent and 50 per cent each year.
“The next year will also likely show small losses as the business is transitioning but we’re pretty much profitable now. The business model is proven in the marketplace, customers love the service and we’ve built a strong, differentiated platform. CurrencyFair is now very much focused on revenue growth and scaling to profitability,” Mr Byrne said.
CurrencyFair’s main rival is the British payments firm Transferwise, which this week announced a new ‘borderless’ service that enables customers to store money in 15 different currencies and have local account numbers for the UK, Europe and the US.
