Curve crowdfunding

Malthusian

chamelion wrote: »

£70M in funding and 1/4 billion valuation. This isn't a mom and pop shop

Indeed not, most mom and pop shops make money.

This business on the other hand has blown through $70 million, can't get its existing institutional investors to give it any more money, and has resorted to tapping up its customer base via CrowdCrap before it brings down the curtain.

$1/4 billion valuation lol. Companies House shows net assets of £5.3 million as at October 2018. Most of this was cash they'd raised from investors and hadn't yet spent. The movement in the profit and loss account suggests they are losing £5 million a year. If it's not listed on an liquid exchange its shares are worth precisely nothing, until the very moment you can persuade somebody to hand over cash for them. If someone asked you to pay £20 for a pint of milk would you not want some fairly solid evidence that it's worth 40 times its apparent face value?

Naturally a business is worth far more than its current net assets if it's going to be extremely profitable in the future. So how do they plan on achieving profitability and exit? A glance at their website suggests they make money by charging you £10 a month for travel and gadget insurance (an extra fiver if you want a metal card and even more useless junk like the right to sit in a smelly airport lounge). This is not an exciting technology firm, this is a positively geriatric business model which banks have been using for donkey's years.

The market for people willing to pay too much for insurance they don't need is not huge, which is why they're losing £5 million a year.

Alexland wrote:

If you really want to get involved and it adds a bit of excitement to your life for a few months then I don't see the harm of risking between £10 to £50.

The standard MO for a scheme like this is in a few months' time they will launch another round of crowdfunding, where they will proudly announce that the business has grown to half a billion $ (based solely on the fact that they are offering punters half as many shares per buck as in the previous round).

Then everyone who invested £50 will kick themselves they didn't invest more last time and invest however many few hundreds or thousands are lying around in their current account, thinking they're going to be like the Facebook founders and retire on their Curve shares. Then Curve will go bust.

chamelion

Malthusian wrote: »

Indeed not, most mom and pop shops make money.

This business on the other hand has blown through $70 million, can't get its existing institutional investors to give it any more money, and has resorted to tapping up its customer base via CrowdCrap before it brings down the curtain.

$1/4 billion valuation lol. Companies House shows net assets of £5.3 million as at October 2018. Most of this was cash they'd raised from investors and hadn't yet spent. The movement in the profit and loss account suggests they are losing £5 million a year. If it's not listed on an liquid exchange its shares are worth precisely nothing, until the very moment you can persuade somebody to hand over cash for them. If someone asked you to pay £20 for a pint of milk would you not want some fairly solid evidence that it's worth 40 times its apparent face value?

Naturally a business is worth far more than its current net assets if it's going to be extremely profitable in the future. So how do they plan on achieving profitability and exit? A glance at their website suggests they make money by charging you £10 a month for travel and gadget insurance (an extra fiver if you want a metal card and even more useless junk like the right to sit in a smelly airport lounge). This is not an exciting technology firm, this is a positively geriatric business model which banks have been using for donkey's years.

The market for people willing to pay too much for insurance they don't need is not huge, which is why they're losing £5 million a year.



The standard MO for a scheme like this is in a few months' time they will launch another round of crowdfunding, where they will proudly announce that the business has grown to half a billion $ (based solely on the fact that they are offering punters half as many shares per buck as in the previous round).

Then everyone who invested £50 will kick themselves they didn't invest more last time and invest however many few hundreds or thousands are lying around in their current account, thinking they're going to be like the Facebook founders and retire on their Curve shares. Then Curve will go bust.

good read

curious to see whether it goes exactly as you say, or this turns into the next billion dollar company. reminds me of bitcoin naysayers when it was under a buck.

Thrugelmir

Malthusian wrote: »

$1/4 billion valuation lol. Companies House shows net assets of £5.3 million as at October 2018.

In their infancy Amazon and Facebook would have been similar.

Market value rarely bears any meaningful relationship to liquidifiable balance sheet assets.

DrSyn

chamelion wrote: »

good read

curious to see whether it goes exactly as you say, or this turns into the next billion dollar company. reminds me of bitcoin naysayers when it was under a buck.

I expect that is the main reason that many of the newbie investors will be tempted by.

Malthusian

chamelion wrote: »

curious to see whether it goes exactly as you say, or this turns into the next billion dollar company.

Nobody is going to make a billion dollars from selling overpriced travel insurance for £10 a month.

reminds me of bitcoin naysayers when it was under a buck.

What naysayers? Almost nobody outside the tech community had heard of Bitcoin when it was trading under a dollar in 2011.

The get-rich-quick market isn't going to inject billions of dollars into Curve shares in the way it did into BitCoin.

Thrugelmir wrote: »

In their infancy Amazon and Facebook would have been similar.

Again, Amazon and Facebook were genuinely groundbreaking technology firms with a dominant market position, they weren't selling packaged travel insurance.

Market value rarely bears any meaningful relationship to liquidifiable balance sheet assets.

It does when you can't find any Greater Fools to sell to.

Curve's profit and loss movement suggests it was due to burn through its remaining £5.3 million net assets by *checks watch* gee well ain't that a coincidence, roundabout now.

When it can't persuade its customers to put in any more money, its market value will be the same as its net assets, less than nil.

Thrugelmir

Malthusian wrote: »

Again, Amazon and Facebook were genuinely groundbreaking technology firms with a dominant market position, they weren't selling packaged travel insurance.

Amazon was hardly groundbreaking at the outset. May have evolved in time. Their business plan was very simple. To shift boxes at a cheaper cost. In the process driving emcumbrents from the market.

Facebook makes money from advertising. Not the technology. Newspapers used to make money from advertising particularly property. The rise of Rightmove was the ultimate demise of local paper publishing. People love something which is free to use.

Technology disrupts markets finding winners is more challenging.

Having presented at a real life Dragons Den event in London. Where the minimum investment level was £2 million. There's no end of ideas. Rasiing finance is a very different matter. The day we were there no one was ultimately backed.

antrobus

chamelion wrote: »

£70M in funding and 1/4 billion valuation. This isn't a mom and pop shop

Neither was Theranos, $9 billion dollar valuation.

Or indeed any other name from a long list of large(ish) businesses, startups or otherwise, that have crashed and burned.

antrobus

Curve is an example of what is now known as a fintech. There are a lot of them about. Indeed according to this website there are 1,018 of them.

https://www.crunchbase.com/hub/united-kingdom-fintech-companies#section-overview

I think I can reliably predict that about a 1,000 of them ain't gonna amount to much. Perhaps a handful of them may succeed. But I'd be hard pressed to tell you which ones.

Thrugelmir

antrobus wrote: »

Curve is an example of what is now known as a fintech. There are a lot of them about. Indeed according to this website there are 1,018 of them.

https://www.crunchbase.com/hub/united-kingdom-fintech-companies#section-overview

I think I can reliably predict that about a 1,000 of them ain't gonna amount to much. Perhaps a handful of them may succeed. But I'd be hard pressed to tell you which ones.

Reckon a fair number will get swallowed up by established players.

jim1999

Does feel more like a marketing gimmick to me. I mean how many genuine investors would be attracted by the prospect of "Curve swag"?

I kept an eye on it in case it was an interesting way of getting access to Curve Metal, but in reality you're getting very little from Curve in the way of rewards - the entire proposition is on the company being worth more in the future and being able to cash in down the line.

That doesn't fit with my investment principles (i.e. not to invest in individual companies at market rate) so not something I'll be looking at further.