Voyager Digital Ltd (FSE:USD2 | CSE:VYGR | OTC:VYGVF): Bringing crypto to the masses
A public, licensed crypto-asset broker that provides investors with a turnkey solution to trade crypto assets, Voyager Digital’s goal is to bring a better, more transparent and cost-efficient alternative for trading crypto-assets to the marketplace.
Founded in 2018 and listed on the Canadian Securities Exchange (CSE:VYGR), the OTC Markets (OTC:VYGVF) and the Frankfurt Exchange (FSE:USD2), Voyager Digital is a small-cap with a market cap of $100 million. Voyager offers investors best execution, data and custody services through its institutional-grade platform, making it the ultimate, all-in-one destination for investing and trading digital assets on mobile, and well-positioned to continue its growth and reach profitability by early 2021. Co-founder and CEO Steve Ehrlich discusses Voyager’s impressive revenue growth in the last 12 months, its plans for product and geographic expansion, and the reasons why he and Voyager are bullish about the future of crypto-currency and alternative banking.
“The crypto-currency market is an extremely fragmented market today,” Mr Ehrlich explains, “with over two hundred global exchanges in the marketplace, where people can trade from around the globe on these different exchanges.”
The market is also fragmented in terms of custody, how people hold their digital assets, so it can be very confusing for the average retail investor to participate in one of the fastest-growing assets in the markets. Voyager’s job is to help customers navigate these complex markets and understand alternative banking.
“I got together with my co-founders, there was four of us – Phillip Eytan, who’s a serial entrepreneur, who started billion dollar companies like Socure and Pager; Gaspard de Dreuzy, who’s been in the capital markets; and then most notably outside of myself is Oscar Salazar, who was the founding CTO of Uber.”
The co-founders bounded together two and a half years ago to take a look at the competitive landscape of the crypto-currency market, bringing together the breadth of their knowledge to try and bring a more consumer-friendly product to market.
“[We wanted a product] that really simplifies the markets but gives the consumer enough information that they can make a really good decision on which crypto-assets they want to hold, earn and invest in and trade over the near future. That’s how we came together, and we started building the product off of a few meetings.”
One of the biggest problems in trading crypto-currency at the moment is the fact that there are multiple exchanges. This means consumers don’t know where they should open up an account in order to start trading on an exchange.
“There is very little price transparency in the crypto market,” Mr Ehrlich says. “So one exchange can have a price of Bitcoin, and another can have a different price. You have no idea where to go. That’s one of the confusing parts, and it keeps the retail investor from really participating in that market because of the fragmentation.”
Another issue is that most investors don’t understand how custody works. There is a lot of talk about different types of self-custody – owning your keys and your coin – which doesn’t make sense to a retail consumer.
“So we have to simplify it and make it easy for people to understand security, custody and trading of these markets, which is what the Voyager platform does and brings to the US market today.”
Other market players tend to work in two ways: one initiates lots of exchanges on one side of the world, creating a complex trading platform, either on a desktop or mobile; the other tends to be full of apps that oversimplify the market, making it so that consumers can only purchase Bitcoin.
“We play down the middle. We want all the retail consumers to use our platform. I’m ex E*TRADE, I was there in the days when E*TRADE first grew up and started bringing online brokerage to the masses; we want to bring crypto to the masses.”
Voyager has four distinct differentiators from competitors. One is the offer of 42 coins for people to trade, more than is offered in the other two models. Secondly, not only can consumers trade but they can also earn interest without locking up the coins.
“[Thirdly] we allow people to transfer coins in from other places to fund their account, and then four is the ease of use of the app, where you can actually download the app and then fund and trade all within two minutes or less, abiding by all regulatory requirements and making it really simple for people to open, trade and buy their crypto-currency.”
As far as Mr Ehrlich is concerned, the company is still in the early stages of its journey. The adoption of crypto-currency is in its infancy, and so there is plenty to come in terms of realizing potential.
“First and foremost for investors in Voyager, you’re getting in at an early stage, when we’ve only touched the surface of the number of investors that will actually open crypto accounts, trade and hold crypto.”
The company is looking to expand its offering to the market, with ideas about debit and credit cards, margin on trading, a desktop version of the platform, and utility to its token all possibilities in the future, which will expand margins and revenue for every customer.
“Then there is our geographic expansion. We’ve just recently announced we’re going to enter the Canadian market by the fall of 2020, and we have plans to enter the European market, the Asian market and the Latin American market right after. So our investors are really getting in on the early stages of where we’re going to be twelve months from now.”
The company’s Board is made up of co-founders Phillip Eytan and Gaspard de Dreuzy, in addition to Jarrett Lilien, former CEO of E*TRADE Financial and a long-time friend and colleague of Mr Ehrlich, who brings a wealth of invaluable capital market experience. There is a similar level of experience in the company’s management team.
“Gerard Hanshe is our Chief Operating Officer, a long term capital markets guy, and Janice Barrilleaux, who is also ex-E*TRADE, runs our compliance and has been with us a long time and has long-term experience in the capital markets. So we’ve got a really experienced team here, which sets us apart from a lot of other crypto-currency companies.”
One of the benefits of this experience is in a regulatory sense. The team understands what regulators want and need, from Know Your Customer to anti-money laundering rules, and the company does everything it can to abide by those rules.
“The other thing is, we have a breadth of connections within the industry as we keep growing this out, and we see that there are quite a few people that have transitioned from the traditional capital markets into the crypto and digital world. We use those connections, that experience, to broaden our network and expand what we’re doing and our product.”
The team at Voyager Digital is full of seasoned veterans, professionals who have been around the block. In Mr Ehrlich’s case, 25 years in trading has shown him the ups and downs of the business and helps him navigate issues more effectively.
“I was around the stock market in 2001 when it crashed, around the financial crisis of 2008 and saw what happened there, so I’ve navigated these waters in difficult times, either as part of E*TRADE or running my own company. You can’t dismiss how important that is when you’re building a public company from the ground up.”
This means the company knows when is the right time to launch products, when to pull back, when to look at expanding the team and when to contract. Having gone through the difficult market cycles, the team is helping set Voyager Digital up to be the most successful public company and the only successful agency broker in the space.
“We’ve only really been in the market for about twelve months with our product at this point in time. From a near-term perspective, we’re expanding our customer base. We’ve seen tremendous growth in the quarter ending June . We’re expecting to see more growth in the quarter ending September.”
The company’s immediate goals are product expansion, setting up a desktop version of the product, and adding some utility to its token. The longer-term vision is geographic expansion into Canada and to add debit and credit cards.
“These are all within our near, short and long-term goals, and we think in building out our product, building out our business, growing to be a tremendously successful company, these are on our horizon.”
With Bitcoin now becoming the digital gold, the company is bullish on crypto. Especially in the US, where money is being put back into the economy, people are looking for alternative banking options, which at the moment are gold or digital gold.
“In this virus time that we’re in, in this pandemic, most people do not want to use dirty dollars. They want digital dollars. I think all this is starting the adoption of crypto-currency. That’s why I’m so bullish on this – people want alternatives to what’s in the marketplace, and I think they’re starting to realize what is there and how we get to the future.”
Mr Ehrlich is right to be bullish. As of June 30th 2020, Voyager has amassed over 230,000 global users across its platforms, and has preliminary unaudited revenue of approximately $1.1 million for the ending of the fiscal year, a staggering year on year increase of 1,159%.
“We’re extremely happy about the progress we’ve made at Voyager,” Mr Ehrlich concludes. “We’ve seen progress continue through the month of July, and expect it to exceed our numbers over the near-term.”
By providing secure housing, and offering trading and withdrawals for more than 39 digital assets to its customers, Voyager Digital is simplifying the crypto-currency process, making it more accessible to consumers. Find out more about Voyager Digital Ltd by visiting www.investvoyager.com.