Curve turns to crowdfunding to push buy now/pay later expansion

Curve, a London fintech that allows consumers to store their payment cards in a single location, is using crowdfunding to raise funds ahead of its U.S. launch and a foray into point-of-sale lending.

The completed funding round on Crowdcube attracted 11,795 investors and about $14 million in 54 hours, with about $8.5 million from 4,000 investors coming in the campaign's first three hours on May 25.

Curve plans to use the funding to aid expansion in Europe, launch its platform in the U.S. and support the pending launch of Curve Credit, its buy now/pay later service.

Curve

The buy now/pay later market has grown quickly over the past year as consumers looked for alternatives to credit cards during the pandemic, but the product has also drawn regulatory scrutiny over concerns it encourages consumers to accumulate debt. This pressure is pushing buy now/pay later firms to diversify into other financial products. That creates an opportunity for Curve to add buy now/pay later to existing products such as its "back in time" feature, which allows consumers to retroactively change a card used in a prior purchase to manage their finances.

The amount Curve raised through crowdfunding is much smaller than it may have through traditional venture capital investment. But Curve uses crowdfunding not only to raise capital, but to boost its user base by offering crowdfunding participants access to incentive marketing and loyalty programs for its all-in-one card.

"Ever since our last crowdfund round in 2019, our customers have been requesting another opporutnit to take a share in Curve," said Shachar Bialick, founder and CEO of Curve, in a release. The company characterized its last crowdfunding campaign in 2019 as a way to show "buzz" and to quickly scale users who are susceptible to a "fear of missing out" on a new product.

Curve has also tapped the venture capital market, raising about $180 million to date, according to Crunchbase. In January Curve raised $95 million in a Series C round from IDC Ventures, Fuel Venture Capital and Vulcan Capital.

Several companies in the all-in-one card market have faltered in the past, including Coin, Swyp, Stratos and Plastc, partly because they launched before PSD2, the European regulation that mandates easier data sharing between banks and third parties. Without open banking, it was harder for earlier all-in-one cards to access data from different bank-issued cards to connect with multiple retail partners.

PSD2 has inspired open banking in other countries, and has helped Curve add partners such as Uber, Sainsbury's, Transport for London and dozens of others. Curve reports it has hired more than 100 staffers in the past year and its transaction volume in 2020 reached $3.7 billion, a 61% increase from 2019.