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spk00: Ladies and gentlemen, thank you for standing by and welcome to the Mogul Q1 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to turn the call over to Craig Armitage, Investor Relations. Please go ahead.
spk03: Thank you, and thanks for joining us today, everyone. Just a couple quick notes before we get started. First, today's call will contain forward-looking statements that are based on current assumptions subject to risks and uncertainties that could cause actual results to differ materially from those projected. The company undertakes no obligation to update these statements except as required by law. Information about these risks and uncertainties are included in our Q1 filings, as well as periodic filings with regulators in Canada and the U.S., which you can find on CDAR, EDGAR, and on our website. Second, today's discussion will include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not as a substitute for the IFRS financial measures. And lastly, the amounts today are discussed in Canadian dollars, unless otherwise indicated. And as per our normal practice, we do have presentation slides today. Those can be found on the IR section of the website. With that, I'll turn it over to Dave Feller to get us started. Dave.
spk04: Thanks, Greg. Good afternoon and welcome to MoGo's first quarter 2021 results conference call. I'm joined today by Greg Feller, our president and CFO. It's been an active and highly productive start to 2021 for MoGo. We are building the most comprehensive digital wallet to address the needs of Canadian consumers and the transactions we've completed in the first quarter, both strategic and financial, have really accelerated our growth plans and vision significantly. Today, we're in an even stronger position to take advantage of the accelerating adoption of digital wallets and digital finances. Although we've made a lot of progress, we're clearly still just getting started. What continues to drive us is the need for better solutions to what continues to be a big problem, the wealth gap. As we all know, the average person isn't on track to building wealth and instead continues to live a life dominated by financial stress. Although almost everyone of them has a bank account, they're clearly not getting the solution they need. At the simplest level, that's what we're here to solve. We're hyper-focused on making MoGo the simplest, most engaging way to build wealth, which for most people means becoming a millionaire. If you were 20 years old today and just starting out in your financial journey, your goal would be to achieve at least a million dollars in wealth in order to one day retire and reach financial freedom. Fact is, if you make $40,000 a year and save and invest $20,000 of your after-tax income, you could easily retire a multimillionaire. As much as we believe in gamification, we also believe that money is a serious business and our goal is to have a seriously smart product and an experience that really helps achieve their money goals. Years from now, the idea of having a bank account trying to figure out what to do to achieve your goals will be a thing of the past. Financial literacy is being built into the products and the experience in a way that no in-person experience could deliver. Banking as we know it is going away and consumers will continue to move to the solutions that make it easy to manage their money and build wealth. The two critical elements of this really come down to spending control and saving and investing. Our goal is to have the most compelling and effective solution in both of these categories. These are really the two key strategic initiatives we've been focusing on here at MoGo. Now, controlling your spending is perhaps the biggest challenge for most people in terms of achieving their financial goals. Our goal is to make the MoGo card our members' go-to spending card. We believe we have the most compelling card value proposition in the Canadian marketplace today, and given our acquisition of Carta, we have a key strategic advantage in terms of vertical integration and cost advantages, which are critical to delivering a value proposition that others will find hard to match. In Q1, we saw continued strong momentum in our card, with total spend up over 1,000% from the same quarter last year. What's more, we continue to see a strong link of card users adopting our other products. Our active card members are 14 times more engaged than our non-card members, including 15 times more likely to trade Bitcoin, 6 times more likely to apply for a mortgage, and 8 times more likely to refer friends. They're also logging in on average more than once a day. Now, we still have a lot to do with this product, and we can continue to focus on improving the experience and assuring it really does become the best card in Canada in terms of helping consumers manage their money and avoid overspending and credit card debt. This really is the precursor for building wealth. There's no doubt that digital wealth is the future, and as we continue to see a secular shift to digital wealth platforms, and our goal at MoGo is to build the leading digital wealth platform in Canada. Wealth has been one of our biggest missing elements of our solution today and now really has become our top strategic priority. Our Mocha acquisition and CoinSquare investment are two key milestones as we assemble some of the key building blocks of our new wealth offering. And it's not just the platforms and the tech. It's about the people, expertise, and the passion they bring for the space. All of us believe in the same mission and believe that a modern digital wealth platform is key to achieving it. We see three key products needed for leading digital wealth platform. a simple automated investing platform solution, self-directed commission-free stock trading, and commission-free crypto. As we previously announced, we plan on launching an automated investing solution for our members, powered by a Mocha acquisition. For most people, beginning with an automated and more passive investment strategy is usually the smart way to go. Studies continue to show that most people can't beat the markets So investing through a portfolio of low-cost index ETFs is usually the best way for the average person to build wealth. Fact is, today, the high-cost mutual funds still dominate, and fees up to 2% a year can make a big difference when your time horizon is 40-plus years. So having a low-cost and automated strategy can really help someone achieve their financial goals. Our goal is to also link this to our card so that users can automatically set roundups so that every time they're spending, they're also investing. And it's really that combination of our solution that becomes powerful. It's also important to note that approximately 45% of Canadians today over 18 don't have an RSP or TFSA account, which are really the two primary ways for Canadians to build wealth in the most tax-efficient way. This fact just shows you how big the gap is, as everyone should have one and be already building wealth, but most just don't have the solution that helps them do this. Think digital, low-cost, simple, and smartly designed. As we have previously announced, our goal is to launch commission-free stock trading before the end of the year. Retail stock trading continues to be a massive trend that we will we believe will continue for the long term, as most people will settle on a combination of automated passive investing complemented by trading individual stocks. Recent data showed that DIY Canadians opened 2.3 million investing accounts in 2020, nearly triple what was opened in 2019. Although passive investing makes a lot of sense, it's also important to engage people in their wealth-building journey, and individual stock investing can play an important role in this. DIY stock investing is a massive market dominated by legacy players with not only high fees but very dated digital experiences. This is one of the most exciting products we've worked on to date and we have a team that is passionately focused on delivering the best stock trading experience in Canada. Zero commission stock trading with live streaming data and a simple and intuitive modern UI that will set a new bar in Canada. We couldn't be more excited about this product. Third piece of wealth is crypto. This is a market that continues to grow and develop and research shows that we are still early days in terms of adoption. A recent U.S. survey estimated that only 14% of Americans own crypto, yet 63% are what they call crypto curious. These are people who don't own crypto, but say they want to learn more or planning on buying soon. PayPal recently cited a survey that shows 74% of millennials plan on using crypto in the next year or two. And a recent MasterCard survey showed that 40% of respondents plan on using cryptocurrency in the next year. Total crypto market cap today is just over $2 trillion U.S. compared to about $95 trillion for equities and over $90 trillion for the total money supply. Our journey in crypto started when we launched a simple way to buy and sell Bitcoin in 2018. We were one of the earlier players, and in fact, many were very skeptical and even critical of our entry in the space. We believed then, as we do now, that it was going to be an important part of the financial ecosystem. In Q1, our Bitcoin trading grew over 15 times compared to the same quarter last year. Although very strong, we know there's so much more opportunity beyond just our Bitcoin offering. So one of our next steps is to expand just beyond Bitcoin to have a more comprehensive crypto offering. It's clear to us that Canadians will increasingly want to participate in this new digital asset class and making sure we have a leading offering in the Canadian market is a strategic priority. Our goal is to launch this expanded offering in the first half of next year, given our full plate of development initiatives today. Which brings us to our strategic investment in CoinSquare. As we announced today, we will be increasing our ownership to 37%, with the option to increase further to approximately 48%. CoinSquare was our initial partner when we launched our Bitcoin account, and they've continued to build out what we clearly see as the leading crypto platform in Canada. This is one of our most strategic investments to date, and there are a lot of things that excite us about CoinSquare. With 26 coins supported, they continue to see very strong growth and now have over 600,000 users and assets under management up an incredible 230% year-over-year and rapidly approaching a billion dollars. They are now at a revenue run rate of over $95 million a year and EBITDA margins of approximately 50%. CoinSquare has multiple parts of their business that position them well in this digital assets space. Besides their consumer-facing solution, they also have an institutional-grade platform, which we think will be increasingly important. They've also been very focused on the regulatory front, including ensuring their platform supports all the necessary elements, and we believe they're positioned to be one of the first regulated marketplace and broker dealers to trade digital assets in Canada. They've also been FinTrack regulated since 2017. In addition to this, they've been working on becoming one of Canada's first qualified custodians for digital assets, leading all this as a very experienced management team and board of directors. In terms of their platform, they've built a broad offering that includes web, mobile, and a full-service over-the-counter service giving customers multiple options in terms of buying and selling digital assets. They have also several different pricing models that enable them to offer competitive pricing to all segments. Founded in 2014, they are truly one of the pioneers in Canada. Although they've been doing this for a while, they're constantly improving their platform and recently launched CoinSquare QuickTrade. which is a brand new platform designed to dramatically improve not only the customer experience, but the ability for them to continue to evolve their offering. This new platform is also designed to speed up deposits and offers no fee funding, withdrawal options, along with commission-free trading. CoinSquare will continue to drive its brand and offering and execute on its strategy of building out the leading crypto platform in Canada. At the same time, they will continue to power Mogul Crypto, which is Bitcoin today, along with powering expanded crypto offerings. There's no doubt that this is still an emerging space, but one in which we believe will become increasingly important, and we remain focused on ensuring we have one of the leading crypto platforms and offerings in the Canadian market. But it's also clear that this is just one component of our broader digital wealth offering and something that really differentiates us in the Canadian market today. With that, I'll introduce Greg to talk you through the financials. Greg?
spk05: Thanks, Dave. As Dave mentioned earlier, the first quarter was amongst the most active and strategically important period in MoGo's history, during which we made huge strides to expand our product capabilities, accelerate our roadmap, and transform our balance sheet. In addition, we made a number of strategic acquisitions to give us increased scale and vertical integration that we believe uniquely positions MoGo as one of maybe two syntax of scale in the massive and highly profitable Canadian markets. This morning, we continued to execute on this strategy with the announcement that we were increasing our ownership in Canada's leading crypto platform, Coinsquare, to approximately 37%, while retaining a very valuable warrant that allows us to increase our ownership to 48% at an attractive valuation. As Dave highlighted earlier, Coinsquare now has assets in a custody of approximately $900 million and a revenue run rate of over $95 million based on April's revenue. In addition, the company is generating over a 50% EBITDA margin in the recent months. Therefore, our effective 48% ownership of CoinSquare, both exercise of a warrant, we see as an extremely valuable asset that we believe can serve as a catalyst in 2021 as the market begins to better appreciate the true value of this platform and the opportunities our two companies have together. We believe as long as we continue to execute on our plan and continue down the path of leveraging the unique position that Mogul and CoinSquare each have in the Canadian fintech sector, that the combined power and value of these two platforms will become evident. The transaction we announced is expected to include two separate transactions. The exercising of our call option on 3.2 million points where common shares from existing shareholders under the original investment agreement and the purchase of 2.2 million shares from Riot Blockchain. Total value of these two transactions is approximately $48 million, and we have the option of paying in cash and stock or a combination. Turning to our first quarter results, it was a strong start to the year with many metrics showing accelerating growth. which we believe sets us up well to deliver on our 2021 goals, including our target of 80% to 100% growth in subscription services revenue in the fourth quarter of the year. Key highlights include record net member additions, accelerating subscription services revenue, and strong gross margins. In addition, we reported an adjusted EBITDA loss of $1.1 million in the quarter. As we previously communicated after demonstrating the strong underlying profitability of our model in 2020, We made a financial and strategic decision to invest that cash flow in 2021 in areas that we believe will drive long-term value and accelerating revenue growth in 2022 and beyond. Specifically, we're increasing our product development investments and resources to deliver a P2P solution, along with free stock trading by year-end. In addition, we are investing in geographic expansion of our digital payments business card into the massive U.S. finance market. We saw a record number of net member additions in Q1 driven by mostly by increasing adoption of MOGO crypto and spend products. This was a third quarter in a row, so an increase in net member additions. In addition, post quarter end, we closed the acquisition of MOGO, which now brings our member base over 1.6 million members. If you were to also include points where 600,000 members are part of a broader member ecosystem, we would have an excess of 2 million members, which puts us in rare territory in both scale and breadth. We are still very early days of monetizing the base and consider this an extremely valuable asset. As we continue to roll out new features, we expect to see continued strong member growth through 2021 and beyond. Q1 revenue of $11 million was up from $10 million in Q4. The sequential growth was driven by subscription and services, as we discussed, which was up 32% sequentially. second quarter in a row of accelerating growth, and it now represents 53% of our total revenue. Crypto trading volume was up over 400% sequentially and 1,500% year-over-year, and card was up 80% sequentially and 1,000% year-over-year. In addition to having a low-cost customer acquisition model, we believe we have one of the best monetization models of any consumer fintech globally. We now have eight distinct ways to monetize our member base, with more revenue streams to come and are focused on continuing to expand our percentage of monetized members while also growing our member base. In the midst of a busy first quarter on the strategic front, we were also able to execute on our plan to significantly strengthen our balance sheet during the quarter. Building on the steps we took in 2020, we raised $81.6 million in net cash proceeds in Q1 and had more than $120 million in combined cash investment portfolio at quarter end, up from $30 million at the end of Q4. In addition, we completed the early conversion of our convertible to ventures, resulting in reduced interest expense and leverage going forward. Building on our significant product development and corporate development activity in cryptocurrency, we are allocating 5% of the value of our cash and bets portfolio in cryptocurrencies. And we've acquired Bitcoin and Ethereum, which we see as important assets on our balance sheet. And this is part of our $25 million investment portfolio, which includes a dozen equity investments in private technology and e-gaming companies, including Hootsuite, Blue Ant Media, which also owns a large stake in Enthusiast Gaming, Alita, and Tidal Gaming. In addition to that portfolio, as I mentioned, we also have digital assets on our balance sheet, which we see as an opportunity to expand our knowledge and support the blockchain ecosystem and technology. Our goal with the majority of these investments is to monetize them, which we were recently able to do with our Venn investment. Specifically, post-quarter end, we sold our Venn investment for proceeds of $4.7 million, 116% increase from books value, which we believe highlights the significant value we have in this portfolio. A strong start to 2021, along with a number of exciting product launches coming up, give us increased confidence in meeting or exceeding the outlook we presented with the Q4 results. Specifically, we are guiding towards continued increase in net member additions during the year, accelerated growth in subscription services revenue, 80 to 100% year-over-year growth in subscription services revenue in Q4 2021 as compared to the same period in 2020. With that, we will open it up to questions.
spk00: Ladies and gentlemen, to ask a question, please press star, then the number one on your telephone keypad. We'll pause for just a moment and pause the Q&A roster. Your first question comes from Doug Taylor with Canaccord Genuity. Your line is open.
spk01: Yeah, thank you. Good afternoon. I think obviously your CoinSquare transactions have been very well-timed here, and I think One of the things that investors are looking for is just some information on what the range of outcomes or your intentions are with that asset, you know, from consolidation ultimately to, you know, potentially monetizing that through some other way. Can you just talk about how you're thinking about the different alternatives that are available to you going forward? Sure, Doug.
spk05: It's Greg. So, yeah, look, we view CoinSquare and our partnership with CoinSquare and the investment with CoinSquare as very strategic. We don't view this as a passive investment. Obviously, today's announcement that we're increasing that stake and investing more in the relationship is a clear sign of that. And then we have a warrant, which we believe is a very track price warrant that will get us to 48%. which ultimately we believe we will exercise at the appropriate time. We fundamentally believe, as we believe CoinSquare also believes, that any next-gen digital platform, digital wallet in the fintech space really has to have a combination of both crypto and traditional fintech products. And we really see MoGo and CoinSquare as bringing the best in class of both sides in Canada. So we see very strong synergies between our two companies. With this investment, we're going to be moving to equity accounting, our percentage ownership. For us to consolidate, we'd have to be north of 50%, which is something that we will look at in combination with the management team and board of CoinSquare. So we're not focused on monetizing CoinSquare. We're focused on investing in that relationship and really leveraging both of our platforms to build value. We think ultimately the two platforms together, as I mentioned with over 2 million members, the technologies, the scale, the breadth of products we think is unique in the Canadian market. And we think there's a massive opportunity to build on that.
spk01: Yeah. And so, so coin square, I mean, certainly has a potential here to kind of become a, a, a dominant part of the story given your investment and the recent trends in crypto. And I guess you're asking investors to, you know, make a call a little bit more on the future of that asset in an investment in MoGo. And so I wonder if you'd offer up, I mean, your views on Coinsquare's competitive positioning. It's been a leader in Canada, as you say, but, you know, your view on the competitive side market and the potential for other players to enter it or the barriers to entry so that Coinsquare could continue to enjoy the market share that it's had so far.
spk05: Yeah, so Coinsquare, we think, has been a leader for a long time in Canada. We believe they have a best-in-class institutional-graded platform. We don't believe any other Canadian platform has that. You know, they've got one of the broadest, if not the broadest portfolio of offerings, both on the retail and the institutional and high net worth side. We think that they are very well positioned on the regulatory front to get the appropriate regulatory approvals there to operate in Canada as an exchange. And they've got unique assets around the custodial side. They are not a consumer app offering a couple of products, which I would argue most of the other players in Canada are. They are very much a broad cryptocurrency platform. So we think their position in Canada is unique. And we think there are significant barriers to entry, both on the fintech space and the crypto space in Canada. Obviously, the Canadian regulators have been very clear that anybody operating the crypto space in Canada ultimately is going to have to be regulated. And we think that is going to be a barrier for a number of the international players. And there are other barriers as well in Canada for foreign players to come in here. So, you know, and we see the same barriers for players competing against Mogul in Canada. We think it would probably take a player 24 months to build and put in place all of the functionality, regulatory, compliance, et cetera, provincially and federally across Canada that MoGo has. And I think that would be the same, if not more so with, you know, with, with coin square in a lot of aspects. So, you know, we, we believe ultimately that this is a market where Canadian players like MoGo, like wealth simple are uniquely positioned and, and there are barriers to entry and, there's really no other players of scale in the space as well, and scale matters. So, you know, we think we're in a really good position, and that's obviously why we are very focused on investing. We believe there is a land grab opportunity. For the first time in Canada, fintech adoption is accelerating. It was well behind the U.S. and Europe, and now it's accelerating. And we think we're in a unique position to take advantage of that. We're obviously well capitalized in our balance sheets. And we think between the assets and capabilities we have at MoGo now with MoCA as well and the team there, and then the partnership with CoinSquare, we feel really good about things going forward.
spk01: One last question for me, not to lose sight of the performance of MoGo outside of CoinSquare. Yeah, you talked about the growth in the subscription and services revenues and you're still sticking to the 80 to 100% growth guide for kind of year over year in Q4. Can you help us just think about how or decompose that growth and your performance so far between Crypto, which has obviously been very strong, the contributions from Carta, Mocha going forward, so that we might better understand the drivers going forward.
spk05: Yeah, so I would say that the Q1 growth, Mocha is not in Q1, so it's not part of it. Carta clearly is a big contributor to it. just given that we've included their results for a portion of the quarter and just over half the quarter from Carta. But by far, the fastest actually growing revenue product streams were Mogo Spend and Crypto. I would say that at the growth rates that we're seeing, we think they're well on their way to being in a position to be you know, more than 10% of our subscription services revenue at some point in the near future. So, you know, they're getting to a scale that they're actually going to be meaningful drivers of absolute growth as well, because as you know, they've both been coming from a small base. So we feel very good about that. You know, MoCA, our focus on MoCA is going to be, and Dave, I think, touched on this a little bit, but our focus on MoCA is going to be really bringing their kind of best-in-class investing on automated savings into the MoGo account and really getting it out to our broader member base. And that, we believe, will give us a lot more opportunities to monetize that member base outside of the subscription model. And then also, the MoCo team is very focused already on helping develop our free stock trading So, you know, there's no way we could do all of this that we're doing without that acquisition and the team that we've got there. So I think that's why we feel good about our ability to, you know, kind of deliver on the targets that we've put out there.
spk01: I'll pass the line.
spk00: Thank you. Thanks. Your next question comes from Scott Buck with HC Wainwright. Your line is open.
spk06: Hey, good afternoon, guys. Greg, I'm curious, in terms of the overall operating results, what is your crypto exposure? I mean, is it, you know, less than 10%, less than 5% of total reps right now?
spk05: Yeah, I would say it's in, yeah, it's definitely in kind of single digit percentage range. So, you know, as we've said in the past, given it's a high growth product for us, we've got a lot of leverage on the upside to crypto. But given the fact that it's really at this stage not a material portion of our revenue, we've got limited downside on the downside in our financials from crypto.
spk06: Okay, that's perfect. And second, in terms of closing of the Mocha transaction, I'm curious as you guys start to work through integration, if you recognize any new or identified any new opportunities, cross-selling or otherwise, as you start to work through that?
spk05: Well, I would say the biggest opportunity is the free stock trading. I mean, there's no way we'd be in a position to feel comfortable talking about launching that before year end. And if you look at the success Wealthsimple's had with that solution, it's really the only free stock trading solution in Canada. It has been significant. We do believe that that is a product that has one of the biggest opportunities to move the needle in terms of high member growth at a low cost. And we think it's a core part of any broader digital wallet solution that obviously we're building. So, yeah, I would say that is the biggest area of focus. And there are definitely other opportunities that we're seeing is We talked about we are ultimately building a vertically integrated financial fintech platform, and Carta really brings that vertical integration on the payment side. Mocha really brings it on the investing side, and there's other components of that they bring to the table, including regulatory compliance as well. It's a complex industry and it has got regulations across provincial and federally. And so, yeah, I mean, we see a lot of opportunities to leverage, you know, their capabilities and their team as we continue to build out the broader solution here.
spk06: Thanks. I appreciate that. And last one for me, I'm curious if you could provide a little bit of color on how you think about ROI on some of the investment spend you're doing, whether it's on the marketing side or the tech side.
spk05: Yeah, great question. I mean, that's basically how we assess all of our spend, in particular on the marketing development side. We believe we're in a world now where product development is marketing, and in fact, it's the most effective marketing. We believe the most successful fintechs out there are succeeding because of great products, not because of heavy marketing dollar spend. Marketing is a complement to it, but it doesn't replace a great user experience. So we very much look at, on the marketing side, we look at CAC to LTV ratios. We look at and we adjust how fast we want payback depending on what level of investment we're prepared to make and what level of investment we're making on the product side. And then on the product side itself, from an ROI perspective, it's the same thing. You could have a free product, but if a free product which has some costs. But if that free product is driving a lot more users at a lower cost that are engaging and monetizing other products, that could be the best marketing dollars you spend and drive a very effective ROI. So, you know, that's absolutely how we kind of manage our spend and investment both on the product development and the marketing side.
spk06: That's very helpful. I appreciate the time, guys. Thanks, John.
spk00: Your next question comes from Suthan Sukumar with 8 Capital. Your line is open.
spk02: Good afternoon, gents. My first question, I guess, is related to the last question on the momentum you're seeing with the new member growth quarter over quarter for the past few quarters. I think you mentioned earlier that Mogul Crypto was somewhat of a gateway for some of this user acquisition this quarter. I'm curious, looking ahead, what do you see as some of the biggest drivers for the user acquisition going forward? Is it really going to be driven by launch of new products, or do you guys have plans to continue playing around with the brand messaging side of things?
spk04: It's Dave. Yeah, I mean, I think there's a lot of different products and value props that we think, you know, MoGo offers today that definitely are appealing to the market. But I'd say given the momentum we're also seeing on the card and also given the momentum and the link between active card users and our other products, I think we're increasingly positive around focusing a lot more of our marketing on and user experience actually around the card. So we've obviously been working on that for a while and increasingly we're essentially designing the experience where more and more by default a user gets a card. So I think the card will become increasingly an important focus from a marketing perspective. As well as just from a value prop. Similar to free stock trading, we think we have a very compelling value proposition in the card. There's no other card in the marketplace today in Canada that not only offers 1% Bitcoin cash back, but also automatically offsets your carbon footprint. And all for no annual fees. I mean, the market in Canada is massive. You know, debit cards in Canada. Just over $250 billion a year spent on debit cards and the vast majority of them, zero rewards. In fact, most of them come with $15 a month fees for the banks. And then the credit card space, you're talking over $500 billion a year spent on credit cards. And increasingly what we're seeing is more and more people are looking for better control. That is the problem with credit cards. People, it's easy to get yourself into debt. So we think this secular shift away from even wanting to use credit cards will continue. You're starting to see, obviously, a lot of momentum globally in this space. And I think as people start to increasingly see the link between controlling their spending and the ability to actually build wealth and starting to realize that actually one of the main reasons I can't build wealth is because I've been using a credit card, I'm in debt, I have no money available left at the end of the month, they're going to start to more and more see the benefits of shifting away from that But the problem with debit cards in the past is they've also lacked some of the rewards. So the best of both worlds is getting credit card level type rewards with a control of using your own money. And then just as I mentioned in my comments, we're looking at launching Mogul Wealth at the end of this year. And that is also going to be linked to the card where we're effectively going to set it up where there's automated roundups. so that when you're actually using the card by default, you're automatically investing at the same time. And then obviously users can adjust that. But you can just see increasingly there's that automatic link between our products. So when you're using the card today, at the end of each month, your Bitcoin rewards get deposited in Bitcoin in your Bitcoin account. That obviously helps to drive engagement there. And then in the case of wealth, you're gonna have, for those that are choosing to keep that on, automated monthly money going directly into your wealth account as well. And our goal and focus there is going to really be getting them to go beyond just the roundups and actually hitting towards that target, right? So that the card essentially becomes the gateway for a lot of these other products that we're offering. And, and that's the, I would say that you're going to start to see that more in terms of the stock trading, that's clearly going to be free stock trading, clearly going to be a customer acquisition opportunity for us as well. but that's not going to be launching until the end of this year, so that will really start to have an impact next year.
spk02: Great. That's helpful. Could you share an update on where things are at with your peer-to-peer payment strategy, both in terms of timing, but also in terms of how you're thinking about bringing that product to market within the app and integrations with the digital wallet and And what sort of business model do you anticipate with peer-to-peer payments?
spk04: So, you know, it's interesting. We've been looking at the P2P market space for a while. Obviously, you see in the U.S., Venmo, Cash App, you know, the two dominant players. In Canada, again, we know it's primarily Interact EMT, although Wealthsimple is having some success with their new, effectively, peer-to-peer solution. But increasingly, we actually believe this is going to become more likely to be an important part of the card experience. So when you actually look at most use cases for P2P, it usually comes out of somebody's spending money. So if you're buying lunch or something and somebody's going to pay you back, which would be a common thing to happen where somebody's got to pay somebody back, really that money's got to – it's like I would have used my own money to pay for it, but you paid for it, so I've got to pay you back. I don't actually want to have a separate account with separate money. That really just comes out of my spending budget. So really we see that increasingly as just a core functionality of the card itself. So you're using the card. You're controlling your spending. Let's say you're on $1,000 a month budget. You're using the card in terms of your main spending. Sometimes you have to pay people back. You want that money to come out of that essentially just like a transaction, no different than if you paid for it yourself. comes out of that. So we see it increasingly being a core function of the card. And also we believe that in the long run, that's where most P2P will happen. Whichever card becomes the dominant card in someone's wallet, right, that will increasingly, assuming they have a P2P solution, be increasingly where someone, you know, decides to essentially do their person to person transfer. So our goal is to still launch a P2P functionality before the end of this year. But again, we really see it as kind of a feature predominantly for the card. Even though you're still going to have the ability to sign up and be able to do P2P without the card, but in terms of that daily average use and that high use, really a card feature. Now, it isn't going to be a revenue driver. It is really just a product feature that drives more adoption usage of the product even in our own surveys that is clearly one of the things that people are looking for hey I wish I had the ability to do some p2p with this card because sometimes I have money in there I gotta I have to be able to pay somebody back with that money but again we really just see it as primarily going to be a card feature obviously a low friction and hurdle point for somebody to sign up for mogul as well and then but not a revenue driver
spk02: Got it. Thank you. And last question for me, guys, is on M&A. You guys have obviously been quite active with strategic acquisitions and investments over the past little while. Do you guys plan to remain opportunistic on M&A going forward, or do you have what you need in kind of the big building blocks and kind of just, you know, we're going to shift focus now to just straight execution in business?
spk05: Yeah. So, yeah, I would say, look, we feel really good about where we are right now and the building blocks that we've got. And we've got a lot of work ahead of us on executing on the stock trading and continue to expand our partnership with CoinSquare. So we've got no shortage of opportunities with what we've got. So I think our focus right now is on... you know, growing our business, executing on our product development roadmap and continuing to expand our relationship and our partnership with CoinSquare. You know, if there was an M&A opportunity that we thought made sense that accelerated our product roadmap or brought other pieces to the table that we thought, you know, was going to be valuable, then obviously we'd look at it. But, you know, I think we feel pretty good about where we are at this point in time right now.
spk02: Perfect. Thank you, Tens. I'll pass the line.
spk00: Again, to ask a question, please press star, then the number one on your telephone keypad. Your next question comes from Bill Zeng with Raymond. James, your line is open.
spk07: Hey, guys. So pre-pandemic, you were doing 17, 20,000 number additions a month, and obviously this quarter, you know, was a lot higher. Is it safe to say that we can expect this to be sustainable for the balance of this year, or do you think there's room to grow that base even more?
spk05: Yeah, it's great. Look, I think we continue to believe that there is an opportunity for us to increase that and continue that trend of adding more NET members in 2021 than we've historically been doing. So, And we think that that opportunity actually will accelerate further in 2022 when we've got products like free stock trading out there. And we will have a very unique and compelling value proposition that we don't think anybody else in Canada will have. So we're still, despite our scale, there's still a massive opportunity. And so, yeah, I think there's definitely an opportunity for us to continue to grow net member additions as well.
spk07: Great. And on the investment portfolio side, I know you've mentioned monetization in 2021. How should we think about that cadence here?
spk05: Sorry, how should we think about the cadence, did you say?
spk07: Yeah, exactly.
spk05: So, look, I think, you know, these things are always hard to predict. You know, Vanna, we had an opportunity because they did a bigger raise and we sold into that raise. You know, there's obviously a lot of real money went in there that's expecting multiple valuations to go higher. But, you know, that's not a long-term strategic investment. So, we monetized it. And so... We do believe there is a reasonable probability that we'll have other monetization opportunities out of that portfolio this year. But it's always hard to call it exactly when. But again, a number of those investments we don't see as strategic. So when there is an opportunity to monetize those, and we think, to be honest, the majority of those investments, we believe... have value above book value, which we obviously saw a significant increase over book value on Vena. And we think we've got that opportunity in some of our other investments as well. So we want to capitalize on that when that opportunity presents itself.
spk07: Okay, great. That's all for me.
spk00: Okay, and I'll turn the call back over to presenters for closing remarks.
spk04: Thank you. Well, clearly it's been an exciting time for MoGo. We've already accomplished a lot so far in 2021 and have multiple important catalysts, I think, coming up in the next few quarters in terms of new product launches and enhancements. All of this really geared towards continuing to build out what we, you know, our plan to really kind of have the most powerful engaging finance app in Canada. Thanks again for joining us today and for your interest in MoGo, and we look forward to talking to you again with our Q2 results. Thanks.
spk00: This concludes today's conference call. You may now disconnect.
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