Voyager Digital

Hi there,

I would like to bring your attention to Voyager Digital. I’m bullish on it, but maybe someone here can help me identify some glaring problem with the company that I’ve failed to see?

First heard of the company via Beth Kindig’s Twitter last year, and saw later I/O Fund was holding it, in the brief time I was a paid subscriber to their service. Not sure if I/O are still holding.

So, what is Voyager Digital? In the company’s own words:
Voyager Digital Ltd. is a fast-growing, publicly traded cryptocurrency platform in the United States founded in 2018 to bring choice, transparency, and cost efficiency to the marketplace. Voyager offers a secure way to trade over 60 different crypto assets using its easy-to-use mobile application, and earn rewards up to 12 percent annually on more than 30 cryptocurrencies. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. (actually they currently have more than 60 coins on offer)


Bit of a mess here, they are listed on several exchanges with different symbols:

VOYG (Toronto Stock Exchange, CAD)
UCD (Frankfurt SE, EUR)
With a Nasdaq listing expected in 2022 that hopefully will unify all of the above.

Market Cap:
~$1.67 B USD


So here’s where it gets interesting.

(Voyager 's financial year begins July 1st, so Q1 is Jul-Sep, Q2 Oct-Dec, Q3 Jan-Mar, Q4 Apr-Jun)

(also, below table is in millions USD)

 **Q1       Q2       Q3       Q4**
**FY20     0,07     0,09     0,28     0,42**
**FY21     2        3,3     60,4    109** 
**FY22    81,5    165**

So this FY they are already 40% up from the last one, while only 2 quarters in.

QoQ performance is erratic but tremendous:

 **Q1      Q2        Q3     Q4**
**FY20     -       22%      220%    48%**
**FY21    380%     78%     1593%    80%** 
**FY22    -25%    102%**

Q3 FY21, the quarter ending March 21st 2021, is not a typo, the explosion was helped by the Gamestop/WallStreetBets quarter, where the Voyager app really benefited from the Robinhood (HOOD) debacle, as retail investors were looking for other places where to put their money.

There was a big hiccup on the recent Q1, with Voyager attributing it to facing slower market volumes across the industry. Crypto took a big beating over the summer, Voyager’s revenues did too.

AUM (Assets Under Management):

End of FY19 $5M
End of FY20 $37.8M (+656%)
End of FY21 $2.6Bn (+6778%)
End of Q2-22 $7Bn (+169%)

Verified Users:
3.2M at the end of Q2 FY22, from below a million a year before.
More than a million funded accounts (1,075k).

Voyager are looking to begin operations in Europe and Canada this year, currently they operate in most of the US. Company also plans to expand into NFTs, the Metaverse, launching a debit card, and adding credit products and equity trading.

Team has grown from 35 employees at the start of 2021, to 250 at the end of the year.

The big gorilla in this space is probably Coinbase (COIN), with over 73M verified users, $255Bn AUM, live in more than 100 countries and sporting a $60Bn market cap. Compared to them, Voyager Digital are still in their infancy, seemingly with a lot of room to grow.

Voyager will announce the results of its fiscal 2022 second quarter ending December 31st on or about Feb 14th (they announced the above preliminary results already).

Recent partnerships include National Women’s Soccer League, NASCAR Driver Landon Cassill + Kaulig Racing, Dallas Mavericks, NFL’s Rob Gronkowski, NBA’s Victor Oladipo.

Voyager is about a ~8% position for me, currently, and I’m looking forward to the Nasdaq uplisting. It seems to me like an extremely undervalued company right now. My simple take is, if cryptocurrencies continue to do well, this one will do very well too. As long as there aren’t significant decreases in crypto trading volumes, revenue will continue to do well, and the company is making efforts to diversify its revenue sources further. Re: stock price, I got into it in July at around 9€, and have seen it climb to 16€ and all the way back down, swinging in sync with the Bitcoin etc prices.

Finally, some comments from the latest earnings call, by Steve Ehrlich, Voyager’s Co-Founder and CEO:
(bolding is mine)

What an exciting time for Voyager. Wow. We recently announced we reached a major milestone with the addition of 1 million funded accounts. And we now have over 2.7 million verified users on the platform. I’m also very happy to add that we have nearly $7 billion of customer assets under management. The acceleration of our growth is happening in calendar year 2021, as we started on January 1st with only 43,000 funded accounts and $240 million of customer assets under management. When we raised significant capital early in the year, we committed amongst other important objectives, to use our capital to grow our accounts. I am happy to say that we achieved this objective and we’ll continue to achieve this objective. I believe we are now a major player in the crypto ecosystem.

While the quarter ending June 30th experienced extraordinary growth, in late June, we started facing slower market volumes across the industry. Recent earnings reports by other public companies in the industry evidenced our predicted slowdown. Based on our view that market volumes would return after Labor Day, we invested heavily in customer acquisition through our loyalty and rewards program. As we saw some competitors take a step back from marketing, we seize the opportunity to invest in the future and grow our accounts. Recognizing that our business is volume dependent, we took the strategic decision to invest heavily not only in marketing but improvements to our system architecture, the addition of new coins on product diversification. This has resulted in a return to profitability in the current quarter as volumes have jumped significantly.


We intend to be one of the few participants in the top tier as the crypto industry emerges from its infancy.

As a result of our strategic decisions and aggressive spending, the first fiscal quarter ending September 30th resulted in the loss for the quarter. However, I’m extremely excited to say that our strategy is paying off as Voyager is achieving record revenue to date in the current quarter ending December 31st, and is on track to significantly exceed our revenues for the quarter ending June 30th. In addition, we have returned to profitability. I would like to turn to some of our initiatives going forward. Voyager is a product-focused Company with a vision to be the primary digital asset financial platform for retail crypto investors. And today, we are taking another step in that journey as we are launching our preregistration of the Voyager debit card.

What is unique about the crypto backed Voyager debit card is that you can hold your funds in the USDC stable coin and easily pay your bills using the USDC in your account. We believe the phased roll-out of this product in the March 2022 quarter, beginning in January, will develop deeper relationships with our customers and also increase the conversion of the 2.7 million verified users who have yet to become funded accounts. And we have seen that already begun today with the sign-ups. This follows our recent announcement that the popular Voyager token has increased utility as it is now integrated into the quantify payment system, allowing holders the ability to use the token for payments with over 30,000 global merchants. Our goal is to significantly increase the number of merchants and offer token holders discounts on purchases if they use the Voyager token for payments.


In our last call, we discussed the addition of staking rewards as an additional product feature, and as you can see in the September financial statements, we started to institute our staking program in September, and we’ll keep adding more points over the next few months. The addition of staking revenue provides a solid base on top of our transactional revenue. We anticipate continuing to grow the yield and staking revenue. We think that staking is an effective account acquisition tool, and also drives significant stickiness and retention on the platform. Another measuring stick of the success of our strategy is that we delivered significant funded account growth during the September quarter, while our public Company competitor is reporting a decrease in funded accounts for the quarter.

Thus, we believe we are actively gaining market share. Despite the increased market share, evaluation multiples roughly half of those same competitors. On the geographic expansion, we are working towards launching in Europe on our waiting exemptive from the Ontario Securities Exchange to enable us to launch in Canada. In addition, we continue to work within New York Department of Financial Services toward our goal of receiving a New York build license. It would be remiss of me not to discuss customer service and the significant improvements we have made this year. We have grown our staff, edited AI-based held function on the after – on an AI-based chatbot, and are working diligently on bringing AI efficiencies throughout customer questions, expeditiously, and adding live chat phone as part of our service offering.

We are working towards being the best on class service for customers – for crypto customers. Now that we have achieved our TSX listing, Voyager has engaged counsel to start the process to seek a listing on Nasdaq during 2022. The timing is obviously subject to regulatory and exchange approvals. Lastly, the investments we made in 2021 continue to pay off as we have driven a significant uptick in App Store rankings. The increased rankings helped drive the record revenues we are seeing, to put in context. And if we want to look at our results on a calendar year basis for calendar 2021, we will exceed over $360 million of revenue for the calendar year 2021.

Full call transcript:…