Zwipe reports funding into 2020 as preparations ramp up for biometric payment card commercialization
Despite negligible revenues in Q1 2019 and a cash burn rate expected to increase going forward, Zwipe believes it will remain fully funded through 2019 and into 2020, and remains optimistic that it is positioned to be a leading supplier in the biometric payment card market.
In an operational update for the first quarter ending March 31, Zwipe reported a cash burn of NOK 46.4 million ($5.4 million) for the quarter, though only NOK 15.9 million ($1.9 million) was operational. The remainder included extraordinary expenses related to debt repayment and fundraising activities, which were driven higher than normal by a fundraising round and the company’s initial public offering on the Oslo Bors Merkur Market. The company held a cash balance of NOK 82.8 million ($9.7 million) as of the quarter’s end, and received the first NOK 10 million ($1.2 million) of a total NOK 23 million ($2.7 million) grant from the EU’s Horizon 2020 program. Roughly NOK 1.5 million ($180,000) is expected to be paid out from that grant during the rest fiscal 2019. Zwipe also says that it expects to receive a grant for NOK 5 million ($580,000) from the Norwegian government in Q4 2019 after a grant application was approved in Q4 2018. The grant funds expected to be delivered this year and the company’s cash on hand add up to roughly NOK 99.3 million ($11.6 million).
As Zwipe carries out its Generation NxT program to advance its supply chain and reduce costs in preparation for the commercialization of biometric payment cards, the company expects its operational cash burn to increase.
Out of the 17 biometric payment card pilots announced in 2018, Zwipe technology is featured in 12, and the company is involved in 11 current pilot projects.
“Throughout the first quarter, we continued to strengthen our market position by building new important strategic partnerships, supporting our long-term ambition of catering to the unique needs of different regions,” says Zwipe CEO André Løvestam. “The scale and scope of the opportunity we face is continually confirmed with increasing interest from stakeholders globally and we remain confident in Zwipe’s strong position in the biometric payment card value chain as we continue on our mission of making convenience secure.”
Major recent partnership announcements during the quarter include the selection of Fingerprint Cards’ T-Shape sensor for the latest generation of its biometric cards. There will be 579 million biometric payment cards used globally by 2023, according to Goode Intelligence, though there is some uncertainty about when the market will take off. ABI Research forecasted in March that significant growth will start in 2021.
Zwipe launched an operating system solution for payment network applications to work with biometric payment cards, wearables, and other new payment technologies earlier this month.