Coinbase blowouts earnings 😲; India’s first crypto unicorn 🦄; Ripple is focusing on Asia 🥊

Good Morning FinTech. 21/30

Good morning Everyone,

And happy Thursday! We’re almost done with the week - what a blast it was… Here are 3 FinTech stories to start your day:

Coinbase blowouts earnings 😲

The report 💸 Coinbase, the biggest cryptocurrency exchange in the US, has reported its second-quarter results after market close on Tuesday that handily exceeded estimates, with a surge in user growth and trading volume helping boost results despite a volatile stretch of trading for digital currencies.

Shares gained more than 3.5% in late trading immediately following the results. At the point of writing, $COIN is trading at over $278 per share.

The numbers 📊 Coinbase posted $1.9 billion in transaction revenue in the second quarter beating the estimates of $1.57 billion. The U.S.’ largest cryptocurrency exchange grew to 8.8 million monthly transacting users (MTUs) and 68 million total users in the quarter.

Other notable figures:

• Net income of $1.6B, including a tax benefit of $737M mostly related to stock-based compensation awards tied to the company's direct listing in April.

• Adjusted EBITDA of $1.12B, down slightly from last quarter's $1.15B.

• Revenue of $2.2B, with $1.9B from transaction revenue and $103M from subscriptions and services revenue.

• Institutional transaction revenue of $102.4M, up 20% compared to Q1.

• Custodial fee revenue of $31.7M, a 35% increase from Q1.

• Trading volume was $462B, up 72.5% from $335B in the previous quarter.

• The firm added 450 employees, ending the quarter with a total of 2,176 employees.

✈️ THE TAKEAWAY

Coinbase keeps growing. For now. Strong results signify that Coinbase continues to leverage the growing retail and institutional interest in digital assets, yet one has to be very cautious when thinking about the future. Even the exchange itself has warned that its number of monthly transacting users and trading volume would be lower in the third quarter. Key reason? Growing competition. Exchange’s margins and future revenue growth rates will probably fall as competition from the likes of Binance, Gemini and Kraken eat into its business. More importantly, more traditional players like PayPal and Square also have big stakes in the crypto game, so it will only become more tough. For Coinbase and for everybody else.

India’s first crypto unicorn 🦄

New unicorn in town🇮🇳 CoinDCX, Indian crypto exchange, scored a $90 million Series C funding round led by investment firm B Capital amid surging cryptocurrency interest among consumers in India this year, according to The Economic Times.

What is it? 🤔 CoinDCX operates a crypto exchange through which consumers can buy and sell various digital currencies and a lending platform where users can earn interest on their cryptocurrencies. So think of it like Coinbase or Binance.

Big growth 📈 CoinDCX boasts more than 4.5 million users and said it doubled its user base over the last two months. Consumers in India can’t seem to get enough crypto: overall investments jumped 612% year over year in April 2021 to $6.6B, up from $923M.

✈️ THE TAKEAWAY

India + Crypto = 🚀 India has the 11th-highest crypto adoption rate globally, according to Chainalysis. High consumer interest is fueled by a young, tech-savvy population seeking high returns from their investments. More importantly, people who have been excluded from mainstream financial institutions can easily access crypto platforms, which makes them even more attractive in the developing countries. Despite the uncertain regulatory environment, both investors and consumers are still piling into crypto FinTechs in India.

Ripple is focusing on Asia 🥊

The partnership 🤝 One of South Korea’s largest remittance service firms has joined Ripple’s network of institutional payment providers in a bid to hasten payments between the country and Thailand.

Global Money Express Co. Ltd. known as GME Remittance, has linked with Siam Commercial Bank, Thailand’s largest bank by market capital, through the use of RippleNet, according to a blog post on Tuesday.

With the new partnership, Ripple & GME seek to “accelerate and scale” payments in a bid to facilitate the remittance needs of some 184,000 Thai nationals residing in South Korea.

Asia focus 🔎 Ripple is focusing on Asia, which the company has said is its fastest-growing market with the number of transactions growing 130% year-over-year.

✈️ THE TAKEAWAY

Focus where the growth is. Given the reported growth numbers, it’s pretty clear why Ripple is focusing on Asia. Not to mention the overall size of the market and huge remmitances vertical. At the core, despite all the controversy that Ripple is currently facing, their product (RippleNet) might actually make a ton of sense. Especially in the internal money transfer space. I would watch them out more closely.

🔎 What else I’m watching

• Crypto project 👀 Crypto exchange Coinbase said it’s working with PNC Bank, the fifth-largest commercial bank in the U.S. by assets, on a crypto project.

• Flywire is on the rise 🚀 Flywire, which focuses on high-value payments in healthcare, education and travel, reported that its total payments volume soared 85% year over year to $1.9B in its first quarter as a public company. The Boston, Massachusetts-based FinTech reported that revenue surged by 56% to $37M in the second quarter of 2021. Revenue less ancillary services soared by 77% to $33M.

💸 Following the Money

• Toronto-based FreshBooks, a provider of cloud-based accounting software, raised $130M in fresh funding at a valuation of over $1B.

• Upgrade, the lending platform launched by former LendingClub Chief Renaud Laplanche, has closed a $105M Series E round at a $3.325B pre-money valuation.

• London BNPL player Zilch has acquired US debt funding platform Neptune Financial to fast-track its launch stateside. The terms of the deal were not disclosed.

• Digital currency trading platform FalconX hit a valuation of $3.75B for its latest funding round — a more than fivefold increase in five months.

👋 That’s it for today! Thank you for reading and have a productive Thursday! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:

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