A UK financial technology business once touted as a potential “unicorn” lost £19m ($25m) last year as it bet big on international expansion.
Ebury, which helps small and medium-sized businesses trade globally, opened 13 new offices around the world in the 12 months to April 2018, accounts filed recently with Companies House show. The big expansion push meant it swung from a profit of £1m in 2017 to a loss of £19m.
“As expected, the strategic investments we have made during the last year to expand geographically have not yet yielded meaningful revenues,” the board of directors wrote in the accounts.
“These investments are clearly visible in our overheads expenses, which increased by £19m year-on-year. However, we are expecting all newly opened offices to generate revenues and margin contributions by the year end 30 April 2019.”
Ebury’s board of directors also disclosed that the company plans to raise fresh funds from investors this year.
“It is the intention of the company and its board of directors to raise further growth equity during 2019 to seize the vast growth opportunities ahead of us,” the accounts read.
Ebury did not respond to emailed requests for comment from Yahoo Finance UK.
The company has raised close to $120m in equity capital to date, according to Crunchbase, making it one of the best funded fintechs in Europe. The company was founded in 2009 and uses technology to help reduce the cost and complexity of international trade for smaller businesses. Boutique tech investment bank GP Bullhound named it as one of 17 potential next “unicorns” — private tech businesses worth over $1bn — in 2017.
The 2018 accounts show Ebury opened new offices in Paris, Milan, Dusseldorf, Athens, Warsaw, Lisbon, Bucharest, Brussels, Ostrava, Manchester, Toronto, Washington, and Dubai last year.
It also invested over £44m in company infrastructure, including joining banking payment network SWIFT and gaining an e-money license in the UK.
The expansion helped payments rise by 58% to 236,000 in the year. Booked trades by value rose by 50% to £6.9bn. 8,000 new clients were signed up across the year. Revenues rose by 15% to £43.7m. Net assets fell from £33.3m to £14.2m.
Ebury’s directors flagged Brexit risks in the accounts and said they have set up an office in Belgium just in case.
“If the passporting rights to the EU are revoked for Financial Conduct Authority (FCA) regulated companies, the group would transfer and novate its non-UK clients to the Belgian entity,” the directors wrote in the report.
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.