Pre-tax losses at TrueLayer, the UK-based payments company backed by Stripe — have increased by close to 40% (37.97%) despite the company trebling revenue year-on-year.
According to Companies House accounts for 2023 filed this week, the fintech reported a pre-tax loss of £55.6m compared to £40.3m for the year prior.
TrueLayer’s increased losses come amid the company’s efforts to cut its costs through restructuring. In 2022, TrueLayer laid off 10% of its staff, according to an announcement posted on its website.
This week’s filings state that, as of 2023, there are around 346 staff employed at the fintech, compared to 434 the year before.
Still, the financial review described 2023’s results as “TrueLayer’s strongest year-on-year growth to date,” citing growth in revenue and gross profit. The fintech more than doubled gross profit last year from £2.96m to £7.78m, and revenue tripled from £4.1m to £12.4m.
“2023 was a year of remarkable growth for TrueLayer, with revenue increasing by 200% on the previous year, as we consolidated our position as the European market leader,” a company spokesperson tells Sifted. “This financial year also saw us reach major milestones, such as becoming the first company to surpass 1m variable recurring payment transactions per month.”
Operational losses, a metric focusing solely on the company’s core business activities that doesn’t consider income from non-operational activities, also fell from £61m in 2022 to £54m in 2023.
The company filing, in particular, cited its success in markets outside of its UK home base, with the number of transactions on its Payout product growing by more than 20x in 2023 across both UK and European markets. Earlier this month, TrueLayer also deepened its partnership with Stripe, which participated in its $130m round in 2021, by becoming the payment giant’s open banking partner in the UK.
Open banking adoption?
TrueLayer is seen as a key player among payments companies that leverage open banking, a technology providing a way for financial data to be shared between third parties. It’s long been expected to usher in adoption of account to account payments (A2A) where transactions move directly from one account to another and bypass the fees incurred by intermediary card networks. Other players in the open banking space include UK-based GoCardless and Sweden’s Tink, which was acquired by Visa in 2021.
It’s not exactly taken off, however. According to a recent report on global payments by Worldpay, A2A captures 7% of global transaction volume in e-commerce compared to the 50% accounted for by digital wallets and 22% by credit cards.
Payments was, until recently, one of fintech’s hottest subsectors, but it was particularly hit hard by the onset of rising interest rates and inflation with consumers reining spending back — and hitting the toplines of payment fintechs in the process. And unlike Europe’s neobanks, payments startups typically can’t rely on tailwinds from interest income.
TrueLayer’s also not the only payments fintech that’s yet to turn a profit. Sifted previously reported that net losses at GoCardless increased by around a quarter, according to figures covering the 12 months to June last year.
