Nium posts $7.3m in revenue and $25.4m in losses, but margins are improving

Prominent fintech startup Nium was growing fast on some counts.

In 2018, the Singapore-based firm handled up to US$1.5 billion in transactions. Last year, it hit US$5 billion, Nium CEO and co-founder Prajit Nanu told Tech in Asia in February. While he expected that number to triple this year, that prediction appears to have been lowered.

Nium CEO and co-founder Prajit Nanu / Photo credit: Nium

Its latest financial filings show that the company booked US$25.4 million in losses after taxes in 2019. While its revenue more than tripled to US$7.3 million, this was outweighed by its ballooning expenses.

However, Vertex Growth’s managing director James Lee remains optimistic. “Notwithstanding Covid-19, Nium continues to see strong business growth and a clear path towards profitability. […] Margins have also been improving.”

He adds that the volume of transactions year to date has exceeded 2019’s numbers and is expected to double by the end of this year.

Nium, which helps consumers and small and medium-sized enterprises remit money, has diversified to help businesses build fintech products.

The company had been aiming to raise US$100 million from investors and was eyeing profitability by the third quarter of 2020. Among Nanu’s plans was launching an initial public offering on the coveted New York Stock Exchange between 2021 to 2022 and achieving US$150 million in annual revenue prior to listing.

To reach those milestones, however, the company would need to manage its cash flow – a challenge amid current circumstances.

Higher operating expenses as well as staff costs drove Nium’s increasing losses in 2019. Employee salary expenses more than doubled to US$9.8 million, while advertising spend and promotions grew almost threefold to US$7.2 million. The latter alone almost surpassed total income for the year.

Dwindling cash

While Nium reported US$47.6 million in cash and cash equivalents at the end of 2019, that included US$41.6 million in funds held by customers in deposits – cash held with the company before being remitted.

Excluding that, Nium would be left with only US$6 million to spend on operations.

In December 2019, the company was reportedly seeking to raise up to US$100 million through a series D round, according to a DealStreetAsia report. A fundraise of that size would typically value a company in the hundreds of millions of US dollars.

Diversifying from remittances