“More and more Aussies are using crypto for groceries and online shopping,” according to Aussie fintech CryptoSpend, which has just announced a $5m capital raise on the back of significant growth over the past few months.
The first – and only – crypto-focused card in Australia to be backed by Visa operates just like a regular Visa card but accommodates the use of 15 different tokens, plus AUD.
The crypto-payments startup’s two founders, Andrew Grech and Richard Voice, have confirmed they’re seeing a shift in the purchasing trends of Australians using the CryptoSpend card.
“We’re seeing a lot less discretionary spending and much more spending on necessities,” said CEO Grech.
“Earlier on last year and at the end of 2021, it was more about one-off purchases, higher-end restaurants and luxury items,” he added.
“But now we’re seeing Aussies spend crypto on everyday purchases at supermarkets, on fuel, takeaway food, online shopping, cinema tickets and so on.”
Grech and Voice, the company’s COO, put this down partly to the app becoming more familiar with users.
“It’s convenient for people as they can track their purchases within the app,” said Voice, while Grech noted that with the rising cost of living and people generally having less disposable income, cryptocurrency holders had potentially become more inclined to use their crypto for everyday purchases.
“People love spending their crypto,” added Grech. “And we’re fortunate to have a broad range of customers – from those using their Cryptospend card to tech-savvy crypto traders who use our app regularly to buy and spend their preferred popular cryptos.”
‘Massive growth’ spurs fresh capital raise
On Wednesday morning, Cryptospend announced a new $5 million Series A capital raise, which comes, its two founders told Stockhead, on the back of record earnings and growth in recent months.
“(The $5 million) is a bump up from the previous $2 million we raised at the end of 2021 into January 2022,” said Voice.
“And that’s to meet the demand we’re seeing on the platform.”
Despite the downturn in the crypto sector in 2022, given the ongoing bear market, sector lay-offs and crypto-company implosions, CryptoSpend is something of an anomaly and has actually seen “massive growth”, which, said Grech: “highlights how the adoption of people using their crypto to spend has continued to become more and more popular”.
And regarding said growth, CryptoSpend has managed a massive base lift in just one year, expanding from 1000 users to more than 17,000 active customers across Australia, with the majority of those coming on board since October 2022.
It’s also achieved a 6-times lift in revenue since Q2 last year, and has tens of millions in transaction volume, with an average card usage of 36 times per month per user, and it’s grown its staff from four at the start of 2022 to 15.
The firm plans to use raised funds to further its ambitious growth plans, which will include:
- More hires
- More product offerings such as in-app crypto swaps
- The addition of more tokens and the building of a web-based platform
- International expansion – firstly to New Zealand, likely later this year.
In terms of potential investors for the raise, Voice said the focus would fall on their current investor group across finance and fintech, including veteran fintech investor Andrew Porter.
“We’ll definitely be going to them but we are also opening the floodgates to potential VCs and family offices and other parties that want to be involved with us on this journey.”
Due diligence and a slice of luck
CryptoSpend is a Sydney-based firm (soon moving into a new office space on George Street) launched in 2020 – just two years after the founders struck up a friendship while studying at the University of Technology.
Stockhead had to ask the duo just how the hell such a young company managed to thrive during the worst of last year’s bear market, when so many other fintechs and crypto companies were struggling, if not worse – imploding.
“It’s been a combination of due diligence and luck,” admitted Grech.
“In fact, Luna and UST were tokens we were considering listing at one stage, but we ended up pulling away from that. We were also looking at using FTX as a liquidity provider … so we’ve managed to dodge a few bullets.”
“We’ve relied on a bit of instinct,” adds Voice, “but when you go and talk to these companies you’re potentially going to partner with, you do have to do a lot of due diligence.
“And that means looking through order books, looking at their backing and a host of other factors. It comes down to the fact we never want to offer a product to our customers that we don’t quite believe in ourselves.”
We fired one final question at them: “Where is the crypto space right now in terms of mainstream adoption?”
“I think if we’re not already at mainstream, we’re almost there,” answered Grech.
“You can see governments all around the world moving quite quickly on regulation now, including our own. And that’s because they understand it’s a rapidly-growing space and they need to step in to make sure it’s safe for consumers.”
If you’re keen to understand how the CryptoSpend Visa card works (you can earn XRP rewards for using it) take a quick gander through the firm’s website.
This content first appeared on stockhead.com.au
**All information in this article is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by CryptoSpend to invest, buy, or sell any coins, tokens, or other crypto assets. Any descriptions of CryptoSpend products or features are merely for illustrative purposes. Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. It is essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.