The crisis generated by the covid has not stopped the good progress of Wallapop’s sales. Despite the confinements, the Catalan platform for the sale of second-hand items increased its turnover by 26% in 2020, to 20.79 million euros. The losses, however, were multiplied by four: the red numbers reached 23.9 million, compared to the 6.3 million registered in 2019, according to the accounts of the company deposited in the Mercantile Registry.
This strong increase in liabilities is due to a large provision for long-term staff compensation in relation to the incentive plan: 42.7 million euros, compared to 14.1 million registered as of December 31, 2019. The company, which last year starred in its largest financing round (157 million) and was confirmed as one of the start-up (emerging companies) best valued in the country, thus intends to shield the remuneration of its employees against possible changes in ownership.
“The plan will allow each beneficiary to receive an incentive linked to the fulfillment of the objectives, conditions and requirements that are indicated in the plan and, where appropriate, in the invitation letter from each one of them. Said incentive will give rise to the payment of an amount or the delivery of rights, especially in the event of a liquidation event ”, reads the annual accounts report. With this provision, the company breaks the path of debt reduction in which it had been on in recent years – in 2018 it obtained a profit of 134 million from the sale of its stake in LetGo Usa.
The start-up, which has just entered the Italian market, increased its workforce in 2020. Permanent employees increased from 150 to 196, including an increase from 28 to 55 in the number of senior managers and administrators, for which remuneration is not broken down. Total spending on personnel jumped from 12.9 million to 40.5 million due to provisions.
The company’s working capital was reduced from 32.7 million to 16.1 million. The company points out that it has signed several loans with financial institutions for more than three million euros “to meet the treasury needs”, in addition to a capital increase already in 2021 for 75 million. The firm details that in August 2020 it benefited from the guarantee line launched by the Government and formalized an ICO loan for 190,000 euros, maturing in August 2025. To this are added others, one of them for two million with the Institut Català de les Finances and also expiring in 2025.
Last year, the firm declared a profit tax of 589,788 euros, compared to 765,406 the previous year. As of December 31, 2020, it had registered deferred tax assets of 12.6 million euros, as at the end of 2019, “corresponding to negative tax bases pending compensation.”
Impact of the pandemic
Wallapop believes that the COVID crisis continues to generate uncertainty. “The evolution of this pandemic is having consequences for the economy in general and for the operations of society,” it acknowledges in its annual accounts. It adds that its effects in the future “are uncertain”, but at the same time it clarifies that at the time of preparing the report there had been no significant effects on the company’s activity. Nor does it consider that the health crisis will cause relevant effects for the year 2021, as has happened for many technology companies.
Likewise, the company does not mention other additional risks that may complicate the company’s operations: “The main challenge for the company for 2021 is focused on maintaining the positive evolution of recent years, continuously improving the product and the monetization of the itself, in order to increase the turnover and profitability levels ”.
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