Message to shareholders (no details) To Banxa Stakeholders:
For those of you that may have missed our investor webinar update, I write to you with updates on Banxa’s recent progress, including obstacles we have overcome and where we plan to go next. Over the last year, our company learned some hard lessons that made us stronger. To state the obvious: being a publicly traded crypto company is not easy!
A DIFFICULT JOURNEY
I am proud of the Banxa team for showing resilience over the last year. Just over a year ago, in June 2022, our management team made the difficult decision to reduce our workforce substantially. And although we weathered many storms over the past 10 years in this industry, we faced a choice: make painful cuts to reduce costs, or risk extinction as a business. As CEO, I was accountable for putting the company in that position, and it was my responsibility to guide us back to safe ground.
In retrospect, we now know that crypto markets would remain depressed. Had we not taken action, Banxa might not be here today. In the bear market, we went back to basics. Our team prioritized our core products with the most market demand, starting with Banxa’s industry-leading on/off ramp solution that boasts the highest conversion rates and a virtually unmatched number of direct payment options.
We also started to lay the groundwork for a coherent long-term strategy that fits within our existing core competencies. As part of this work, we came together as a company to agree on Banxa’s purpose, mission, vision, and values for the next decade and beyond.
Markets were not our only setback. In November 2022, BNXA shares got into a trading halt at the TSX Venture Exchange in Toronto, CA as a result of the company’s failure to file audited results in a timely manner. Some of the reasons were out of our control. For one, auditing standards for crypto assets are still nascent and very much in flux. We were asked to change our revenue recognition models, plus auditors were rightfully very strict post-FTX collapse. The sheer volume of financial data to process was more than we had ever experienced, following the hypergrowth and skyrocketing transaction volumes Banxa facilitated in FY2022. Our transaction volumes grew 100 times in only three years. All of this made for a very lengthy audit process, which we had to tackle with our scaled-down team that was stretched very thin.
Other factors, however, revealed areas where we needed to improve. To put it bluntly, our internal processes needed to be better. We realized that, in the wake of Celsius, Three Arrows Capital, FTX, Terra, and so many other crypto scandals, we needed to live up to the highest standards possible. So, our team spent eight months working through these issues while continuing to rightsize the business. On July 10, the trading halt on Banxa’s shares was lifted at the TSX Venture Exchange and we emerged as a leaner, more focused business. We have recently celebrated a breakeven quarter and are on a path to sustained profitability, thanks to our sacrifices and progress.
VIRTUES OF A PUBLIC COMPANY
Banxa’s re-listing felt like a milestone for our company because of everything that happened over the last year and what it took to reach this point. Shortly after the re-listing, myself and other members of the management team had the opportunity to share our perspective on the company’s progress along with our go-forward strategy, “Enabling Economic Innovation through Crypto Infrastructure” (link: https://tinyurl.com/yck4tjj6), during a live webinar with investors (link: https://tinyurl.com/yckp3vn8).
As a publicly traded company, everything Banxa does is scrutinized. Administrative demands can sometimes get in the way of our “startup culture” focused on innovation. And yet, I have learned to embrace our status as a public company. For all the challenges, one thing is certain: we have nowhere to hide. We report regular, audited financial statements. We have a board of directors elected by shareholders. We share our value proposition and business strategy with markets frequently. Being a public company has made us more transparent and trustworthy in the eyes of the market and provides us with distinct advantages over many of our crypto peers.
OUR CENTRAL THESIS: “EMBEDDED CRYPTO"
Looking ahead, Banxa is doubling down on our mission of building the infrastructure to extend the benefits of crypto to every merchant and consumer in the world.
Our thesis is that we are entering a new paradigm of “embedded crypto,” where economic innovation through safe and compliant crypto infrastructure becomes commonplace and unremarkable. This is the next chapter to follow the “embedded finance” movement, where financial products and payment tech were folded seamlessly into a customer’s journey by the likes of Stripe, Uber, Doordash, and many more.
Simply put, we believe that by 2030 every technology company will use crypto and digital assets, with transactions powered by interconnected blockchain infrastructure. Banxa is building for this new world. The distinction between "crypto" and "fiat" will fade, and every commerce business will operate within the context of a borderless and interconnected financial ecosystem. This new era will be defined by interoperability, integration, ease of use, and compliance – all of which are central to Banxa's mission and vision for the future.
The industry is still nascent, but the awesome potential of this technology is too compelling to ignore. While others try to sell demand that doesn’t yet exist, Banxa is supporting merchants and platforms to meet their payment needs today while simultaneously preparing for future demand across Web2 and Web3 including PSPs, crypto exchanges, wallets, social applications, and much more. Banxa is building the core financial infrastructure that will enable a world where crypto is embedded into our daily lives - whether we see it or not.
WHERE IS BANXA GOING NEXT
Banxa has ambitious goals as we prepare for the future of embedded crypto. Enable users to transact. Empower merchants to grow. Provide access to global borderless transactions. Guarantee a seamless user experience. Embody safety and compliance.
I am motivated by how far we have come since Banxa’s founding back in 2014. Our team processed close to USD $1 billion in transactions last financial year alone. Banxa is privileged to partner with amazing companies and projects across Web3. Of course, none of our achievements would be possible without the incredible Banxa team: thank you for making our company special.
As we embark on this new chapter, we are energized and focused on driving innovation, expanding our global presence, and delivering unparalleled user experiences. Together, let's create a trustworthy and inclusive global financial system, empowering merchants and individuals alike, through the frictionless flow and exchange of digital assets, by anyone, anywhere, anytime.