The crypto winter is not only affecting Binance and the U.S. crypto exchanges. The poor market sentiment has also affected the business figures of Austrian crypto exchange Bitpanda. The main crypto exchange from the German-speaking region saw its 2022 revenue drop from €477 million to €90 million with the loss really exploding to €116 million. Bitpanda was long considered a high-flyer among European fintechs. Currently, however, there is a hangover mood.
The company has grown strongly over the last few years, while at the same time regularly posting a profit at the end of the year. In the hype year of 2021, for example, revenue rose by a staggering 764 percent to €477.9 million, yet the startup was still left with €37.5 million.
One year later, the crypto winter environment is now brutally reflected in the business figures. Net sales fell by 80% to €90 million. An unscheduled depreciation of€ 33 million dragged the result down further. Bottom line, Bitpanda presents a loss of around €116 million – more than the company’s net revenue.
On average, the Austrian fintech had 600 full-time positions last year, down from 400 in 2021, and around 270 employees were laid off in 2023. Overall, Bitpanda shows a significantly worse performance than its competitors such as the US-based Coinbase.
In the business figures, you can see the pitfalls of a stock exchange: In good times, the providers have an operating leverage as the fixed costs do not grow as strongly as the sales. The business generates profits. But in bad times, this effect also makes itself strongly felt. People don’t trade and sales collapses but the fixed costs still have to be covered. At Bitpanda, this was noticeable because the fintech was in the process of building up the team in its record year. As countermeasures, the company cut back on marketing and imposed a hiring freeze.
The financial statements also contain juicy details on the thorny issue of the company’s valuation. Bitpanda was once valued at around €3.3 billion by well-known backers such as Peter Thiel‘s Valar Ventures and Hedosophia. In the 2022 financial statements, the valuation was reduced to €1.3 billion and devalued by €2 billion. The auditors reduced the goodwill they used to calculate provisions.
The company says: “This is merely the balance sheet valuation in accordance with Austrian accounting standards of the provisions for the employee program, which was necessary, among other things, in the course of the reorganization.” The reorganization is a change in the company structure. Nevertheless, the revaluation should not be a good sign.
