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Fintech Startup Curve Analysis

Curve is a UK-based startup that aims at changing the way people deal with their card payments. The purpose of this startup is to reduce the number of credit and debit cards in a wallet to just one. The idea and its realization appeared to be innovative and, combined with the company’s marketing efforts, it ensured Curve’s growth and expansion. This paper will review the startup’s history, marketing strategy, and its tactical implementation, revenue streams, and growth engine.

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History of the Startup

Curve was founded in 2015 by Shachar Bialick, and it became his fifth startup. The primary idea of the startup was to enable people to carry only one plastic card, which would provide access to all their credit and debit cards. The Curve card was accompanied by a mobile application, which allowed for adding new cards and choosing which card should be used for a particular payment.

In 2016, Curve launched its product in beta and attracted 100,000 customers at this phase (O’Hear, 2018). By the time of its release in April 2018, Curve had additional 50,000 people signed up to its waitlist (O’Hear, 2018). In the following years, the number of customers continued to increase.

At the point of launching out of beta, Curve offered its customers not only a card providing access to all customers’ cards but also some additional features. They included the ability to lock the card by touching a button in the mobile app, instant notifications, lower foreign exchange fees, and a feature called “Go Back in Time” (O’Hear, 2018).

In the first year of its full consumer launch, Curve added 1% real-time cashback at three selected retailers, created the Curve Community, and grew the number of its customers up to 300,000 (Discover Curve, 2018). Such features as Curve Send and Curve Credit were developed in the following years. In 2019, the startup managed to raise £6 million in five hours on their crowdfunding campaign, and its number of customers reached 500,000 (Coulter, 2019). The company has been working hard to win over its customers and strengthen its position on the market.

Curve runs its business in numerous European markets and aims at expanding. Currently, the Curve card is available in 31 European countries, and about 30% of its customers are not UK residents (O’Hear, 2019). Curve’s attempts to enter the US market are hindered by complicated relationships with American Express. In 2016, when Curve allowed its customers to add Amex cards as a payment option, American Express forbade Curve to use its cards because it disapproved of Curve’s operating model (Furber, 2019).

Later, though, the companies began working together under a merchant agreement. However, when Curve made Amex cards available for its customers on January 28, 2019, American Express broke the agreement on the following day, making its cards again unavailable for Curve’s customers (Furber, 2019). The inability to settle with American Express prevents Curve from successfully entering the US market since many US residents are users of Amex cards.

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Marketing Strategy

Curve utilizes its innovative approach to solve the customers’ problem concerned with the convenience of managing their finances. Curve’s research showed that people in the UK carried 3.6 cards on average, while in the US, this figure is about 7.5 cards (Smith, 2018). The startup’s solution to the problem is seen in its vision: “Simplify your finances with all your cards in one. Carry less. See more. Spend smart. Save more” (MOF Team, 2019, para. 1).

Yet, the company’s mission goes beyond reducing the number of cards carried by people. The startup aims at integrating all financial services in a single platform that will allow users to manage their finances easily (O’Hear, 2016). Hence, Curve does not compete with banks; instead, it represents a new industry that overtops the banking industry.

In the beginning, Curve identified its target audience quite specifically. Initially, it targeted its product at entrepreneurs and freelancers because they were financially savvy and needed to manage numerous streams of income and spending, which was quite complicated (O’Hear, 2016). Another segment of the startup’s target audience is travelers, and the problem that this population is faced with and that Curve is trying to solve is currency exchange fees charged for using credit and debit cards abroad (Blakey, 2018).

In the future, the startup aims at delivering its product to the mainstream audience, although it is a challenging task (Smith, 2018). The reason for this is the complexity of the product since, as Bialick admits, it is “not one that right now you can go and advertise to bring users in” (Smith, 2018, para. 10). Geographically, Curve targets European markets and aims at expanding its presence there; however, the US market is also attractive to the startup, and its goal is to enter this market as well (Smith, 2018). Thus, enlarging its target market and international expansion are among the primary goals of Curve’s marketing strategy.

In order to differentiate themselves from competitors, companies can either reduce the cost of production to offer the lowest price or add some unique features to their products to justify high prices. At the same time, firms may choose to deliver their products to the mass market or focus on a specific segment.

As was mentioned earlier, Curve’s goal is to make its product available for the mainstream audience. Yet, Curve does not aim at providing its services at the lowest price because its product is original and innovative. Consequently, its marketing strategy can be characterized as broad differentiation since it aims at providing a unique product and charge prices that are justified by the value received by customers.

To convey the value of its product to customers, Curve pays much attention to its branding. Curve’s goal is to build a “visual identity” that will correctly represent its “badass brand and personality” (Discover Curve, 2019, para. 8). Curve defines its brand as “uncomplicated,” “distinctive,” “trendsetting,” and “stylish” (Discover Curve, 2019). The next section will describe how Curve has managed to establish its brand identity, as well as how it achieves its other strategic marketing goals.

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Tactical Plan

To address the identified customers’ problem, Curve developed a card and a mobile app, which allowed users to carry a single card in their wallets while having access to all their cards. Curve’s product is unique as compared to similar products of its competitors, such as Monzo, Starling, Cleo, and Plum (O’Hear, 2018). While these companies provide customers with a financial manager collecting data from all their accounts, Curve goes beyond this and enables customers not only to have access to all their financial data but also to carry only one card (O’Hear, 2018).

Curve also developed additional advanced features to differentiate itself from competitors. The feature “Go Back in Time” is useful if customers paid with the wrong card; in this case, customers have two weeks to change from which of the cards linked to Curve the money for the purchase should be withdrawn (O’Hear, 2018). To further increase its competitiveness, Curve plans to develop Curve Credit, which will offer credit on purchases made with a Curve card (O’Hear, 2020). The new feature will bring Curve closer to its goal of becoming a platform integrating all financial services.

In order to solve the problem of hidden card fees that travelers are faces with, Curve offers its customers money-saving foreign exchange abroad. Travelers can use a Curve card in foreign countries that support MasterCard and Visa cards. When using a Curve card abroad, customers are not charged a currency exchange fee on weekdays and are charged a 0.5% fee on weekdays (Barton, 2020).

Furthermore, Curve uses the wholesale interbank rate for currency conversion, which is usually lower than that offered to customers (Barton, 2020). In addition, both travelers and other types of customers are offered 1% cashback for purchases made in three or six selected retail stores. The available number of stores to select depends on the customer’s plan.

Curve developed three plans to satisfy the needs of various segments of customers. Curve Blue is a free card, while Curve Black costs £9.99 per month and has some advanced features (Thales, 2020). Curve Metal is a premium card offered at £14.99 per month, or £150 annually (Thales, 2020). The premium card is made of metal, allows for selecting six retail stores for cashback, unlimited fee-free spending abroad, and several types of insurance available to the UK residents (Thales, 2020). The development of three plans has allowed Curve to offer its product to a larger number of customers.

As for branding, the startup fulfills its strategic goal of establishing a “badass” brand image by changing the card design, launching promotional campaigns, and increasing its web presence. In 2019, Curve redesigned its card and painted it red, “the colour of courage, energy and passion” (Discover Curve, 2019, para. 4).

The startup also launched a marketing campaign and placed its ads on its “website, social media, marketing campaigns, emails,” as well as in the London Underground (Discover Curve, 2019, para. 6). Regarding web presence, Curve reaches its audience on Instagram, Twitter, Facebook, and LinkedIn and is featured in such popular publications as Wired, Financial Times, Forbes, TechCrunch, The Wall Street Journal, and The Telegraph. The company maintains its blog, Discover Curve, in which it explains how to use its product, shares its news, and conveys its brand image.

Revenue Streams

Curve has two types of revenue streams: transaction-based revenue and recurring revenue. Recurring revenue comes from customers subscribing to Curve’s two paid plans: Curve Black and Curve Metal. The sources of Curve’s transaction-based revenue are interchange fees, registration fees, currency exchange, and some additional fees (Barton, 2020). The startup earns money on every transaction that customers make using its card, as well as withdrawal charges and overseas spending (Barton, 2020).

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While it is possible to identify Curve’s sources of income, the startup’s exact amounts of revenue are not available to the public. For this reason, some crowdfunding investors think of withdrawing their investments, blaming Curve for lack of transparency (Coulter, 2019). However, Curve did not respond to crowdfunding investors’ concerns about its profitability.

Growth Engine

The growth engine of any startup is its customers, so companies make efforts to attract new clients and retain existing ones. Curve currently claims to have 500,000 customers and aims at increasing that number so that it reaches 1 million (O’Hear, 2019). However, leaked data shows that only about 14% or 16% of these 500,000 users are active clients that use a Curve card once a month or more (Coulter, 2019). These figures suggest that the company should work on retaining its customers.

To get new clients, Curve uses a number of incentives. While preparing for the consumer launch, Curve allowed people subscribing to their waitlist to skip the queue if they invited a friend (O’Hear, 2018). Currently, the startup provides its customers with referral codes, which encourage users to invite other people to use a Curve card. A customer provided with a referral code may share it with friends, and when a friend registers in the system, receives a card, and spends some money using it, both people obtain £5 (Ott, 2018).

For retaining customers, Curve provides them with 1% cashback and allows them to earn loyalty points (Discover Curve, 2018). Finally, Curve’s blog uses content marketing to nurture leads, as well as provide existing customers with additional information on the startup’s product and educate them about better ways of managing their finances.

Conclusion

To sum up, Curve is a promising startup that solves customers’ problems regarding the complexity of managing finances and the burden of carrying a large number of cards. The startup’s marketing efforts are directed toward attracting more customers, differentiating from competitors by offering new, unique features, expanding its markets, and building a strong brand image. Curve is faced with some obstacles hindering its expansion, including the product’s complexity for the mainstream audience and a failure to partner with American Express. Yet, the startup attempts to address these problems and strengthen its position on the market.

References

Barton, C. (2020). Curve review. Web.

Blakey, D. (2018). Curve card targets travellers with fees free offering to cover all cards. Web.

Coulter, M. (2019). Leaked numbers show $200 million fintech startup Curve has far fewer active users than the number of ‘customers’ it has claimed. Web.

Discover Curve. (2019). New look. Same curve. Web.

Discover Curve. (2018). It’s been an amazing year at curve and we’re just getting started. Web.

Furber, S. (2019). Curve yields to Amex because fintech promised too much, too soon, say insiders. Web.

MOF Team. (2019). In conversation with… Curve’s Shachar Bialick. Web.

O’Hear, S. (2020). Curve begins quietly testing Curve Credit, its planned Klarna competitor. Web.

O’Hear, S. (2019). Curve, the ‘over-the-top’ banking platform, raises $55M at a $250M valuation. Web.

O’Hear, S. (2018). Curve, the fintech that connects all your cards to a single card and app, gets full consumer launch. Web.

O’Hear, S. (2016). London-based Curve de-cloaks with all your bank cards in one, and broader fintech convergence play. Web.

Ott, G. (2018). How to get your “free” £5 from the UK’s Curve card. Web.

Smith, O. (2018). Curve hits 300,000 users with U.S. expansion planned, but this all-in-one card is still too clever for its own good. Web.

Thales. (2020). The Curve card goes full metal jacket. Web.

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