While Voyager Digital hopes to bring cryptocurrency-backed debit cards and expand internationally in the short term, the company is also focused on delving into the NFT space next year through a new partnership.
The publicly traded cryptocurrency platform announced yesterday a $75 million investment from cryptocurrency marketplace maker Alameda Research, which trades more than $5 billion a day. CEO Steve Ehrlich said that in addition to helping the company with order flow and asset management, Alameda will eventually help Voyager become more involved in the NFT space.
“They understand the NFT space; they’ve helped build the Solana network,” he said of Alameda Research on Friday’s earnings call. “NFT is the core of what we want to bring to market in 2022, and it’s important for us to have some more assistance as we develop our own team to do that.”
Ehrlich said Voyager intends to make NFT available to its users on multiple platforms, which currently total more than 2 million users.
The CEO said Voyager could look to build its own NFTs, noting the company’s relationships with NFL tight end Rob Gronkowski and NASCAR driver Landon Cassill. But more than building its own NFT, the company will focus on providing access to the NFT and its marketing platform to as many people as possible.
“Customers don’t know how the Internet still works today – more than 20 years after it came out – but they use it,” Ehrlich said.” We want them to use the system and make it easy, and that’s why we look at NFTs and how we bring that marketplace – whether it’s on Solana, Algorand, Avalanche or Ether.”
Ehrlich’s remarks came during a conference call to wrap up Voyager’s fiscal year 2021, which ended on June 30. The company reported total revenues of $175 million for the year, up from $1 million in the previous year. During the year, assets under management grew from $35 million to $2.6 billion, and funded accounts jumped from 23,000 to 665,000.
Chris Allen, an analyst at Compass Pointe Research & Trading, said in a note that the $154 million in trading revenue beat expectations of $143 million. Fees from cryptocurrency asset loans were $21 million, below the research firm’s estimate of $31 million for us.
Voyager earlier this month expected its revenue for the first quarter of fiscal 2022, which ends Sept. 30, to be between $63 million and $67 million, down from $109 million in the previous quarter.
Ehrlich said Friday that the company focused on its account growth last quarter, which he called the most important long-term metric and strategy. He added that maintaining that growth used significant expenses.
Ehrlich said October was an active month for Voyager, and he noted continued account growth and transaction volume.
“I think we’re gaining market share with people,” he said, adding that this morning the Voyager app is ranked No. 55 in the U.S. Apple Store.” With the coin we have, with the ease of use of the platform and it’s intuitive …… we are gaining market share.”
The CEO attributed the app’s boost in part to its recent partnership with the Dallas Mavericks. Along with the deal, the company offered $100 worth of bitcoin to those who downloaded the app, deposited $100 and traded at least $10.
“The record revenue …… can be achieved this quarter validates our strategy of focusing on account growth,” Ehlrich said.” We expect to continue to invest heavily in marketing, product development and security.”
To keep pace with its growth, Voyager expects to double its workforce in the next six to nine months as it looks to hire more developers, product managers and marketers.
Voyager Chief Financial Officer Evan Psaropoulos said the company began engaging with borrowers earlier this year to accommodate additional lending capacity and expects to continue to see the benefits of those lending relationships.
Voyager partnered with Blockdaemon in April to enable its users to earn interest on a broader range of coins offered on the platform, Psaropoulos said, adding that Voyager expects to see $40 million to $50 million in revenue per quarter from steady bets starting this quarter.
In addition to NFTs, the company’s future focus includes launching an enhanced loyalty rewards program and a debit card backed by cryptocurrency, as well as expanding into Europe, according to Ehrlich. The CEO noted that European regulators earlier this month approved Voyager to serve customers in France and the European Union.
Coinify, Voyager’s recently acquired cryptocurrency payments platform, offers personal payment processing for 15 cryptocurrencies and transaction settlement for 20 fiat currencies, which Ehrlich noted will be the “backbone” of Voyager’s expansion into Europe.
Voyager is also considering offering credit cards or mortgages.
“Because we have a lot of assets, [clients] will want to borrow from us against some of those assets, so we’re trying to look at the credit side of things …… but these are long-term programs for us.”