Q1 2021 Mogo Inc Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the MOGO Q1, 2021 earnings conference call at the.
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. When the depressed star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero.
Now, let's turn the call over to Craig Kitchin Investor Relations. Please go ahead.
Thank you and thanks for joining us today, everyone. Just a couple of quick notes before we get started the.
First today's call will contain forward looking statements that are based on current assumptions and 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 the regulators in Canada. The U S, which you can find on SEDAR Edgar and on our website.
On today's discussion will include adjusted financial measures, which are non <unk> measures. These should be considered as a supplement to and not as a substitute for the I F or S financial measures and lastly, the announced today are discussed in Canadian dollars, unless otherwise indicated and as per our normal practice, we do have the presentation slides day those can be.
Found on the IR section of the website a battle.
That I will turn it over the day fell or to get US started day.
Thanks, Greg.
Good afternoon, and welcome to Mobiles first quarter 2021 results conference call I'm joined today by Greg seller of President and CFO.
It's been an active and highly productive start to 2021 for mobile 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.
I've really accelerate our growth plans envisioned significantly.
Today, we are in an even stronger position to take advantage of the accelerating adoption of digital wallets and digital finances on.
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 the building wealth and instead continues to live a life dominated by financial stress of.
Almost everyone of them has the bank account they are 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 mobile the simplest and 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 on your financial journey. Your goal would be to achieve at least the $1 million in wealth in order to one day of retire and reach financial freedom.
If you make 40000 of year and saving the best 20000 of the after tax income you could easily retire of multimillionaire.
As much as we believe in gamification. We're also believe that money is the serious business and our goal is to have the seriously smart products and an experience that really helps achieve their money golf years from now of the idea of having a bank account trying to figure out what to do the cheap your goals will be a thing of the past financial literacy is being built into the product and the experience in a way that no.
One 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 comes down to spending control and saving and investing our goal is to have the most compelling and effective solution on both of these categories.
These are the 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 mobile card. Our members go to the spending card. We believe we have the most compelling card value proposition on the Canadian marketplace, a day and given our acquisition of <unk>. We are 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 and.
In Q1, we saw continued strong momentum in our card with total spend up over 1000 per cent from the same quarter last year, what's more we continue to see of 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 six times more likely to apply for a mortgage and eight times more likely to refer friends. There also logging in on average more than once a day.
Now we still have a lot of do with this product work and can continue to focus on improving the experience and assuring it really does become the best Garden, Canada in terms of helping consumers manage their money and avoid over spending and credit card debt. This really is the precursor for building wealth.
There's no doubt the digital wealth is the future and as we continue to see of secular shifts the digital wealth flow platforms.
Platforms and our goal at MOGO was 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 of.
Our Moca acquisition and quaint square investment are two key milestones as we assembled some of the key building blocks of our new wealth offering and it's not just the platforms and the attack.
It's about the people expertise and the passion they bring to the space all of US believe in the same mission and believe that of modern digital wealth platform is key to achieving it.
We see three key products needed for leading digital wealth platform is.
The simple automated investing platform solution self directed commission free stock trading and commission free crypto.
As we previously announced we plan on launching in the automated the vesting solution for our members powered by of Moca acquisition for most people beginning with an automated of more passive investment strategies, usually the smart way to go said he's continued to show that most people can't beat the market. So investing through a portfolio of low cost index E. T. S. It's usually the.
The best way for the average person to build wealth factors today, the high cost mutual funds still dominate and fees up to two per cent of 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 linked this to our cards. So that users can automatically set roundup.
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 per cent of Canadians today over 18 don't have on RSP or T. FSA accounts, which are really the two primary ways for Canadians to build wealth in the most tax efficient way. This factor of shows you how big the GAAP is as everyone should have.
One of the 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've previously announced our goals launch of Commission free stock trading for the end of the year retail stock trading continues to be of massive trend that we will we believe will continue for the long term as most people will settle on the combination of automated path of investing complemented by trading individual stocks recent data showed that DIY Canadians.
<unk> opened 2.3 million investing accounts in 'twenty 'twenty nearly triple what was the opened in 2019.
Although path of 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 on this do.
Yeah, why 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 are of a team that is passionately focused on delivering the best stock trading experience of Canada Zero Commission the stock trading with live streaming data and of simple and intuitive modern UI they will set of new.
Bar in Canada, we couldn't be more excited about this product.
Third piece of wealth is crypto.
This is the market that continues to grow and develop and research shows that there. We are still early days in terms of adoption of recent U S survey estimated that only 14% of Americans on crypto, yet, 63% or what they call. A crypto curious these are people, who don't own crypto, let's say they want to learn more or planning on buying soon Paypal recently cited a survey the.
Shows 74 per cent of millennials plan on using crept up on the next year or two and our recent Mastercard survey showed that 40% of respondents plan on using crypto currency in the next year.
Total crypto market cap today is just over two trillion U S compared to about 95 trillion for equities in over 90 trillion for the total money supply.
Our journey of Crypto started when we launched the simple way to buy and sell bitcoin in 2018, we were one of the earlier players and in fact were very skeptical many were very skeptical on even critical of our entry in the space. We believed then as we do know that it was going to be an important part of the financial ecosystem in Q1 of Bitcoin trading grew over 15 times compared to the same.
Part of last year, although very strong we know there's so much more opportunity beyond just sort of a crypto offering a bitcoin offering.
So one of our next steps as the expand just be on 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 of leading offering of the Canadian market is the strategic priority. Our goal is to launch this expanded offering in the first half of next year, given a full plate of development.
Their ships today.
Which brings us to our strategic investment in coin square as we announced today, we will be increasing our ownership to 37% with the option to increase further to approximately 48 per cent points.
Quite square was our initial partner when we launch of Bitcoin account and they've continued to build out what we clearly see is the leading crypto platform in Canada. This is one of our most strategic investments to date and there are a lot of things that excited us about quite square.
With 26 point supported they continue to see very strong growth and now have over 600000 users and assets under management up an incredible tune of 30% year over year and rapidly approaching $1 billion.
They're now at a revenue run rate of over 95 million of year and EBITDA margins of approximately 50%.
Coin square has multiple parts of the business of positioning them well on this digital assets placed in the space. Besides your 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 and supports all of the necessary elements and we believe they are positioned to be one of the first regulated market.
Some broker dealers to trade digital assets in Canada, they've also been Finch rack 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 of this is 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. There are 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 coin square quick trade, 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 the commission free trading.
Quite square will continue to drive its branded offering and execute on our strategy of building out the leading crypto of platform in Canada at the same time will be they will continue to power MOGO crypto, which is the point today, along with powering of expanded crypto offering.
There's no doubt the this is still an emerging space, but one of which we believe will become increasingly important and we remain focused on ensuring we have one of the leading crypto of platforms and offerings in the Canadian market, but it's also clear the there's just one component of our broader digital wealth offering and something that really differentiates us in the cane market today.
With that I'll introduce Greg to walk the talk you through the financials Greg.
Thanks, Dave.
As Dave mentioned earlier, the first quarter was amongst the most active in strategically important period in <unk> history during which we made huge strides expanding our product capabilities and accelerate our roadmap and transform our balance sheet.
In addition, we made a number of strategic acquisitions to give us increased scale on vertical integration that we believe uniquely positioned to the MOGO. There's one of maybe two fintech the scale of the massive and highly possible the Canadian market.
This morning, we continue to execute on the strategy with the announcement that we repeat the your ownership of Canada's leading crypto platform quaint square to approximately 37%, while retaining a very valuable warrant that allows us to increase our ownership to 48% added an attractive valuation.
As Dave highlighted earlier, we're now with the athletes in exactly the function of $900 million and a revenue run rate of over 95 million based on April revenue. The addition of the company generating over 50% EBITDA margin in the recent months.
Therefore effect of 48% of ownership of the point, where both exercise of the warrant we see it as an extremely valuable asset that we believe can serve as the catalyst in 2021 as the market begins to better appreciate the true value of this platform and the opportunities of our two companies have together, we believe as long as we continue to execute on the planet continues down the path of <unk>.
Leveraging the unique position that mogul on points, where each haven't seen fintech sector that the combined power and value of the two platforms will become evident.
The transaction, we announced the expected to clean in two separate transactions the exercising of our call option on $3 2 million <unk> common shares from the existing shareholders under the original investment agreement and the purchase of $2 2 million share from watching the total value of these two transactions is approximately $48 million and we have the option of paying it.
Cash and stock or a combination.
Turning to our first quarter results of the 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% broke 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 billion of the quarter as we previously communicated after demonstrating the strong underlying profitability of our model in 2020, we need of financial and strategic decision to invest that cash flow in 2021 and areas that we believe will drive long term value of an accelerating revenue growth of 22 and beyond.
Typically we are increasing our product development of that investment and resources to deliver of PDP solution, along with feedstock trading by year end. In addition, we are investing in geographic expansion of our digital payments business card into the massive USA ens market.
We saw a record number of net member additions in Q1, driven by mostly by increasingly the option of mobile kept doing the spend products. This was the third quarter in a row. So on an increase of net member additions. In addition post quarter end, we closed the acquisition of both of which now brings our member base of over one 6 million members. If you were to also include points. We're at 600000 members.
The part of a broader member ecosystem, we would have in excess of 2 million members, which puts us in rare territory and book the scale and breadth.
We are still very early days of monetizing debate and consider this an extremely valuable asset.
As we continue the rollout of new features.
You can see continued strong member growth through 2021.
And beyond.
Q1 revenue of $11 million 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 15% year over year in card was up 80% sequentially in the 1000 per cent year over year.
In addition to having a low cost customer acquisition model.
On the best monetization models of any consumer of Fintech globally, we have eight to seek ways to monetize the member base with more revenue streams and our focus on continuing to expand our percentage of monetize members. While also growing our member base.
In the midst of the 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 of 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.
The end of Q4. In addition, we completed the or the conversion of the convertible debentures, resulting in reduced interest expense and leverage going forward.
Building on our significant product development corporate development activity in crypto currency reallocating five per cent of the value of our cash and debt portfolio in crypto currencies.
And of the acquired Bitcoin and Ethereum, which we see as important asset on our balance sheet.
And this is part of our $25 million of investment portfolio, which includes the dozen equity investments in private technology need gaming companies, including crude sweet lent media, which ultimately the large states and enthusiast gaming a leader entitled Gaming In addition.
To that portfolio as I mentioned, the outcome of digital assets on our balance sheet, which we look at.
Which we see as an opportunity to expand our knowledge in support of the blockchain ecosystem on technology.
Our goal with the majority of these investments is the monetize them.
Which were recently able to do with our vending investments specifically post quarter end, we sold our then investment for proceeds of $4 $7 million of 116% increase from book value.
Which we believe highlights the significant value we have in this portfolio.
The strong start to 2021, along with the number of exciting product launches coming up.
The increased confidence of meeting or exceeding the outlook, we presented with the Q4 results.
Typically 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 two.
2021, as compared to the same period in 2020.
With that we'll open it up to questions.
Thank you, ladies and gentlemen to ask a question. Please press Star then the number one on your telephone keypad well pause for just a moment part of the QD of roster.
Your first question comes from Doug Taylor with Canaccord Genuity. Your line is open.
Yeah. Thank you hi, good afternoon.
I think obviously youre coin square.
Transactions have been very well timed here.
I think one of the things that investors are looking for is just some information on what the range of outcomes of your intentions are with that asset.
From the consolidation the ultimately to potentially monetizing that through some other way can you can you just talk about how youre thinking about the different alternatives that are available to you.
Going forward.
Sure Doug It's Greg So yeah look we view quaint square in a partnership with the points where in the investment with coin square is very strategic we don't view this as the path of investment.
Obviously today's announcement that we're increasing that stake.
And investing more on the relationship is clear sign of that.
And then we have of warrant, which we believe is a very attractive price werent that'll get us of 48%.
With which ultimately we believe we will exercise at the appropriate time.
We fundamentally believe as we believe points. We're also believes that any next gen digital platform digital wallet in the Fintech space really has to have the combination of both Chris.
Crypto and traditional Fintech products, and we really see MOGO endpoints, whereas 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 gonna be moving to equity accounting on our our percentage ownership.
For us to consolidate we'd have to be north of 50%.
Which is it is something that we will look at in combination.
With the the management team on board of Quaint square.
So we're not focused on monetizing points, where we're focused on.
Investing in that relationship.
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 is a massive opportunity to build on that.
Yeah.
Yeah.
So so quite square I mean, certainly has the potential here to kind of become a.
A dominant part of the story of given your investment in the us and the recent trends in crypto and I guess, you are asking investors to make a call of little bit more on the on the future of that asset and an investment MOGO.
I Wonder if you could offer up I mean your views on.
Coin squares competitive positioning it's been a leader in Canada as you say, but.
What's your.
Your view on the competitive market and the potential for other players to enter it or the barriers to entry.
So the coin square could continue to enjoy the market share that it's on it.
So far yes.
Yeah. So so quaint square, we think has been a leader for a long time in Canada. We believe they have a best in class institutional grade platform debt. We don't believe any other Canadian platform has that.
They've got one of the broadest if not the broadest are.
Portfolio of of offering both on the on the retail and the institutional and high net worth side.
We think that they are very well positioned on the regulatory front.
Hum to get the appropriate regulatory approvals there two operating Canada as an exchange.
And they've got unique assets around the custodial side. So they are not a consumer app offering of couple of products, which I would argue on most of the other players in Canada.
They are very much a broad crypto currency platform.
So we think there 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.
B of 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.
We see the same barriers for players competing against MOGO in Canada.
We think it would probably take a player.
24 months to to build and put in place.
All of the functionality regulatory.
The compliance et cetera, provincially and federally across Canada that MOGO has.
And I think that would be.
On the same if not more so with the with coin square in a lot of aspects. So.
We believe ultimately that this is the market where Canadian players.
Like MOGO like well simple are uniquely positioned.
And there are barriers to entry, where there's very there's really no other players of scale in the space as well and scale matters.
We think we're in a really good position.
And that's obviously why we are very focused on investing the.
We believe there is a land grab opportunity for the first time in Canada Fintech adoption is accelerating of is well behind the U S and Europe and now it's accelerating and.
And we think we're in a unique position to take advantage of that were obviously well capitalized on our balance sheet and we think between the assets and capabilities. We havent MOGO now with the with with Moca as well on the team there.
And then the partnership with the points, where we feel really good about going things going forward.
Sure.
One last question for me not to lose sight of the performance of <unk>.
On the outside of coin square.
Yes.
<unk> talked about with the growth in the in the subscription and services.
The revenues and Youre still sticking to the the 80% to 100% gross guide for kind of year over year on 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 card Oh.
Moca going forward, so that we might better understand the drivers going forward.
Yes, so I would say the the Q1 growth the moca is not in Q1. So it's.
It's not part of debt.
Our debt clearly is a big contributor to it.
Just given that where we have included the results for a portion of the of the quarter and just over half the quarter.
From car to.
And then.
But by far the fastest actually growing revenue product streams, where MOGO spend and crypto.
I would say that at.
The growth rates that we're seeing we think there 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 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 both of them coming from the small base. So we feel we feel very good about that.
Moca.
Our focus on Moca.
<unk> is going to be and Dave I think touched on this a little bit, but our focus on moca is going to be.
On a really bringing their kind of best in class investing on automated savings into the MOGO accounts and really getting it out to our broader member base.
And that we believe will give us a lot more opportunities to monetize on that member base outside of the subscription model.
And then and then also you know the bulk of team is very focused already on on helping develop our free for each of the stock trading.
Solution so.
There's no way, we could do all of the that we're doing are without that acquisition and the and the team that we've got there so.
That's why we feel good about our ability to kind of deliver on the targets that we've put out there.
I'll pass the line. Thank you.
Thank you your next day.
Your next question comes from Scott Buck with H C. Wainwright Your line is open.
Hey, good afternoon guys.
Greg I'm curious in terms of the overall operating results what is your crypto exposure I mean is it less than 10% less than five percentage of total reps right now the.
Yeah, I would say it's been yes, it's definitely an in in kind of single digit percentage range. So you know as we.
As we've said.
In the past.
We it given it's the high growth product for US we've got a lot of leverage on the upside to crypto, but given the fact that it's 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.
Okay. That's perfect and then second in terms of <unk>.
Closing of the Moca transaction I'm curious as you guys start to work through integration.
You recognize any new or identified any new opportunities cross selling or otherwise as you start to work through that.
Well I would say the biggest opportunity is.
As the pre stock trading I mean, there's no way we'd be in a position to feel.
We feel comfortable I'm talking about launching that before year end.
And if you look at the success well simple had with that solution is really the only pre stock trading solution in Canada. It has been significant we do believe that that is the product that has one.
One of the biggest opportunities to move the needle in terms of high member growth out of low.
Low cost.
And we think it's a core part of any any broader digital wallet solution that the obviously we're building so.
Yeah, I would say that is the biggest area of focus and we.
There are definitely other opportunities that we're that we're seeing as we talked about.
We are ultimately be building a vertically integrated.
Financial Fintech platform and.
Card of really bringing that vertical integration on the payment side Moca really brings it on the on the investing side.
And there's other components of of that they bring to the table, including.
Regulatory compliance as well on and it's a it's a complex industry and it is Scott regulations across provincial and federally and so.
Yeah, I mean, if we see a lot of opportunities to leverage their capabilities and their team as we continue to build out of the broader solution here.
Thanks, I appreciate that and the 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.
The investment spend you're doing whether it's on the marketing side or the the tech side.
Yeah, Great question I mean are that's basically how we assess all of our spend in particular on the marketing and development side. We believe we're in the world now on the.
The product development is marketing and in fact, it's the most effective marketing we believe the most successful fintech out there are succeeding because of great products not because of heavy marketing dollar spend.
Marketing as a complement to it but it doesn't replace the great user experience.
So we very much look at.
On the marketing side, we look at a.
CAC to LTV ratios, we look at and we adjust how fast we want payback, depending on what level of investment where we're prepared to make on what level of investment we're making on the on the product side.
And then on the product side itself from an ROI perspective.
The same thing you could half of free product, but if a free product, which has some cost but of that free product is driving a lot more users at a lower cost that are engaging in monetizing the other products that could be the best marketing dollars you spend.
And drive the.
A very effective rois so.
That's absolutely how we how we kind of manage our spend and investment both on the product development and on the marketing side.
Thats very helpful. I appreciate the time guys.
Thanks Scott.
Your next question comes from Dan C Tomorrow with the capital your line is open.
Good afternoon, Joe.
The first question I guess as it relates to the last question on the.
On a really on the momentum you're seeing with the new member growth quarter over quarter for the past few quarters margin.
I think you mentioned earlier that.
The crypto.
The mobile crypto was somewhat of a gateway for some of the user acquisition this quarter.
I'm curious when looking ahead, what do you see of some of the biggest.
The biggest drivers for the user acquisition going forward is it really can be driven by launch of new products or or how do you guys have plants.
Can you kind of playing around with the the brand messaging side of things.
So it's Dave.
Yeah, I mean, I think there's there's a lot of different products and value props that we think you know.
MOGO offer 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.
The link between active card users in our other products I think we're increasingly positive.
Positive on around focusing a lot more of our marketing and user experience actually around the card. So we've obviously been working on that for a while and and increasingly we are essentially designing the experience where more and more by default of user gets the card.
So I think the card will become increasingly.
An important focus from a 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 and the card. There is no other card in the marketplace today in Canada. The not only offers one per cent bitcoin cash back, but also automatically offset to your carbon footprint.
And all for for no annual fees I mean, the the market in Canada is bass of debit cards in Canada, just over 250 billion of year of spend on debit cards on the vast majority of them zero of the awards in fact, most of them come with $15 a month fees of the banks.
And then the credit card space Youre talking over 500 billion of 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 get yourself into the into debt. So we think this secular shift away from even wanting to use credit cards will continue you're starting to.
Obviously, a lot of momentum globally in this space and I think as people start to the increasingly see the link between controlling their spending and the ability who actually build wealth and starting to realize that actually one of the main reasons I can't build wealth has been using a credit card I'm in debt I had no money available of left at the end of the month they're.
Theyre 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 lack some of the rewards. So the best the best of both worlds is getting credit card level type of awards with the 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 roundup. So.
When you are actually using the card by default you're automatically investing at the same time.
And then obviously of users can adjust that but you can just see increasingly there is that automatic link between our products. So when you're using the card today at the end of each month of your bitcoin rewards get deposit and the bitcoin Bitcoin account that obviously helps to drive engagement. There and then in the case of wealth youre going to 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 roundup and actually true heading towards that target right. So that the card essentially becomes the gateway for a lot of these other.
The products that we're offering and that's the I would say.
Starting to see that more in terms of the stock trading that's clearly going to be free stock trading clearly going to be of customer acquisition opportunity for us as well, but that's not going to be launching until the next at the end of this year. So that'll really start to have an impact next year.
Great.
That's helpful.
Could you just share an update on on where things are at with your peer to peer of payment strategy. Both in terms of timing, but also.
In terms of the how you're thinking about bringing that product to market within the app and integrations with the digital wallet on and what sort of business model do you anticipate.
With Peter Ter.
So it's interesting we've been looking at the PDP market space for a while obviously you see in the U S. Venmo cash out you know the two dominant players.
In Canada again, we know it's primarily interact E M T.
Although well simple as having some success with their new effectively Peter peer solution.
But but increasingly we actually believe this is going to become more and more likely to be an important part of the card experience. So when you actually look at most of the use cases for of P to P.
It usually comes out of somebody's spending money so if your <unk>.
Buying lunch or something of somebody's going to pay you back which would be a common thing.
Thing to happen, where somebody's got to pay somebody back really that money's got it was like I would've used my own money to pay for it but you pay for it. So I got to pay you back I don't actually want to have the separate account with separate money that really just comes out of my spending spending budget. So really we see that increasingly as just a core of functionality of the card itself. So you're using the card.
You're controlling your spending let's say you are on $1000 per month budget Youre 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 that just like a transaction no different than if you paid for yourself comes out of that so we see an increasingly being a core of function of the card.
And also we believe that in the long run.
That's where most PDP will happen, which whichever card becomes the dominant card in someone's wallet right that will increasingly assuming they have the PDP solution be increasingly where someone decides to two of essentially do their person to person transfer. So our goal is to still launch.
Our PDP functionality before the end of this year.
But but again, we really see it as kind of a feature predominantly for for the card.
Even though you are still going to have the ability to sign up to be able to do PDP without the card, but in terms of that daily average use in that high use.
Really of card card feature now it isn't going to be a revenue driver. It is really just a product feature of that drives more adoption the usage of the product even in our own surveys that is clearly one of the things that people are looking for of Hey, I wish I had the ability to do the some PDP with this card.
Because sometimes they have money in their I got a I have to be able to pay somebody back with that money.
But again, we really just see it is primarily going to be a card feature.
Obviously of low friction and hurdle point for somebody to sign up for MOGO as well.
And then but not of revenue driver.
Got it thank you.
And last question on fruit from you guys on is on is on M&A you guys have obviously been quite active.
The strategic acquisitions and investments over the past of awhile.
Do you guys plan to kind of.
We remain opportunistic on M&A going forward or or.
Do you have what you need and kind of kind of the big building blocks in the kind of the.
There's been a shift focus not to just straight execution on the business.
Yeah. So yeah, I would say look we feel really good about where we are right now in the end the building blocks that we've got and we've got you know a a lot of.
Of work ahead of us on.
Executing on the stock trading and continue to expand our partnership with Queen square So.
We've got you know no shortage of opportunities with what we've got so I think our focus right now is on.
Growing our business executing on our product development roadmap and continuing to expand our relationship and our partnership with the coin square.
If there was the <unk>.
And the M&A opportunity that we thought it made sense of accelerated product road map.
Or brought other pieces of the table that we thought.
What's going to be valuable then.
And then obviously, we'd look at it but but some.
I think we feel pretty good about where we are at this point of time right now.
Perfect. Thank you I'll pass the line.
Again to ask a question. Please press Star then the number one on your telephone keypad. Your next question comes from Bill Zhang with Raymond James Your line is open.
Hey, guys.
So pre pandemic, we're doing 17 20000 member editions of month and obviously this quarter.
On a lot higher.
Is it safe to say that we can expect us to be sustainable for the balance of this year or do you think there's room to grow at that pace even more.
Yes, it's Greg look I think we continue to believe that there is an opportunity for us to increase that.
And continued that that that trend of of.
Adding more.
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.
Grow net member additions as well.
Great.
On the.
The investment portfolio side.
I know you had mentioned on monetization in 2021, how should we think about that cadence here.
Sorry, you kind of how should we think about the cadence of the day, yes.
Yes exactly.
So look I think these things are always hard to predict.
Banner, we had an opportunity because they did a big array that we sold into that right.
Are we there is obviously a lot of real money went in there that's expecting multiple evaluations of go higher but.
That's not a oh of long term strategic investment so we monetize it and so we.
We do believe there is a reasonable probability that we will have other monetization opportunities.
Out of that portfolio this year.
And.
But it's always hard to hard to call that exactly.
Win, but again a number of those investments we don't see of strategic.
So when there is an opportunity to monetize those and we think we think you know.
To be honest the majority of those investments.
We believe.
Have a value of above book value.
Which we obviously saw a significant increase in over of book value on better and we think we've got that opportunity in some broad the investments as well so we want to capitalize on that when the when that opportunity presents itself.
Okay, Great that's all for me.
Okay.
I'll now turn on the call back over to the presenters for closing remarks.
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 are planning 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.
This concludes today's conference call you may now disconnect.
Okay.
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