Mode Global Holdings very focused on revenue and user growth (AQSE:MODE)

Mode Global Holdings plc (AQSE:MODE) Chief Executive Officer Rita Liu caught up with DirectorsTalk to discuss what the company does, what their unique selling points are, highlights from the interim results and what investors can expect for the rest of 2022.

Q1: First off, Rita, could you just explain for us what Mode Global Holdings actually does?

A1: So, Mode first of all is a fintech start-up whose vision is to give trustworthy access to UK public of cutting edge technology such as crypto and open banking. Our mission is to be the most trusted platform for UK customers to discover, own and utilise digital assets. In order to demonstrate our value proposition to be a trusted platform to access crypto services, we’ve gone great length to ensure we have all relevant licenses and approvals. We are one of the very few companies in our space that has both EMI license and cryptoasset registration approval.

The Mode app, which is the main platform for our users to access our services, was launched early 2020 so just about two years ago. We’ve built a diverse suite of products for our users to get access to crypto, not only can you buy, sell and trade crypto, but also you can earn cashback through our Bitcoin cashback products which now has 350 brands and names including day to day brands such as eBay. You can also pay with Mode Pay which through open banking you can pay with any UK bank account with one of our largest merchants THG on some of their most famous brands, such as Lookfantastic, you can pay with Mode Pay and get cashback in Bitcoin.

So, we built a suite of product for our customers to get access to crypto in the period of two years, which is very early stage for a start-up and we also managed to grow the user base to over 100,000 users so that’s of overview of the company.

Q2: Could you just explain the unique selling points that Mode has? Why is it different?

A2: I think mainly three points.

First of all, our regulatory status, which I mentioned, so we have been regulated since day one because we do see in our industry regulations are very important factor for the industry to prosper in the long term. It also is very important for customer protection so it’s very important for us to build around our mission, which is to be the most trusted platform for users to get access to crypto. So that’s why we’re having very pro-regulation. Our regulatory status, as I mentioned, is very rare so our EMI license covers the fiat fund so we offer GPP account for our users through a compliant way, and we also have the cryptoasset registration approval from FCA. So far there’s only 38 companies that have  got the registration approval in UK to offer cryptoasset services to UK customers so we are one of very few companies that have both licenses that cover fiat and crypto in the space, in the UK.

The second point is, of course, as I mentioned, our various ways to get access to crypto for our customers. So, besides buying which is the most common way for customers to get access to crypto, we do see the need for the general public to start their journey in a more simple way. So, through our Bitcoin cashback, you don’t need to put your own money in to buy crypto, you just shop with Mode by clicking a link on our app, and when you complete the transaction, you’ll get cashback in Bitcoin, in your Mode wallet safely. So, that’s also another unique selling point in our view, by offering our customers other ways to get access to crypto. Just on top of that, we also have our Bitcoin payroll product where our customers can opt to get part of their salary to be paid in crypto or Bitcoin into their Mode wallet so really in a diverse way for our customers to get access crypto is one of our USP’s.

Finally, the third point, I think our USP is we aim to provide the simplistic experience for the general public to access crypto, as you know, in the crypto space is very jargon-filled, sometimes it’s quite hard to understand for a beginner. So, we aim to provide the simplest route for users to access crypto, we aim to build a very simple onboarding and fiat top up experience, which we continue to optimise on. Also, that’s why we do a lot of education as well, we have a Mode Academy portal on our website where we talk about a lot of 101 knowledge about crypto, about Bitcoin to our user base. So, really providing that simplest onboarding experience for our customers is also one of our USP’s.

Q3:  You’ve recently issued interim results, could you just talk the highlights?

A3: I think there are five highlights I summarised here so let’s start with, relatively negative one.

The revenue did drop due to a wide market-led crypto winter and economic downturn, which heavily impacted user behaviour and sentiment and but there’s lots of positive in our first half a year.

My second point is our cost optimisation started to show results, loss per share improved significantly compared to last year and why, I will talk about that.

The third point is a successful launch of the highly anticipated Bitcoin cashback, which leverages affiliate networks and combines crypto. So, the first weeks of the launch, we saw 129% of growth in customer purchase, we launched with 100 brands, and now the brand pool has grown to 350 and there are some very well-known brands endorsing us with better rate and co-marketing activities such as Farfetch, Deliveroo because they see the potential of offering reward in crypto to their user base through us.

The fourth point is despite the market downturn, we continue to grow the user base. As you can see from the results we reported, by period end we have over 90,000 registered users, and this number now stands at over 100,000 users. So, as a fintech B2C app, as you know, user base is obviously a very important metric as it demonstrates our ability to attract users and this also offers a very good foundation for us to continue to generate revenue from a growing user base.

Finally, this one is also related to the previous point. So, we reported a diversification of our user base, from previously very highly centred around trading to a diversification to more non-trading users such as our cashback users. So, this in turn will lead to diversification of revenue, that’s why we are very confident that down the road we have a very strong and healthy revenue monetisation trajectory.

Q4: Just looking forward then, could you just summarise what investors can expect from Mode Global Holdings in the remainder of 2022?

A4: So, we are only three months until end of the year, definitely there are still some very exciting things coming for the rest of the year.

So, as you know, we announced that we got approval from FCA to launch extra tokens on our platform, actually they approved 10 other tokens. So, for some of the people that don’t know, even if you are registered, you still need to get approval from a regulator on change of directions and any new services you intend to add.

We are adding extra tokens this month, in October, starting with Ethereum so this is a significant step for the company because this enables us to offer our users more choices other than Bitcoin. They can access all the tokens through Mode, we’ll start with trading, buy and sell but we’ll also offer other features which we already have on our platform with all the tokens as well. For example, our cashback product, we intend to add cashback with Ethereum in the tokens, just as our customers prefer.

So, this is a very important step for us in terms of revenue growth, and also user growth so that’s one thing we’re very focused on for the rest of the year and we’re very excited about it.

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