“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.

Stockhead spoke with the crypto-payments startup’s two founders late Tuesday, who confirmed they’re seeing something of a shift in the purchasing trends of Australians using the CryptoSpend card. (The card, incidentally, is the first and only crypto-focused one in Australia to be backed by Visa, and operates just like a regular Visa card but accommodates the use of 15 different tokens plus AUD.)

“We’re seeing a lot less discretionary spending and much more spending on necessities,” said co-founder and CEO Andrew 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 fellow founder Richard Voice, the company’s COO, puts 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 have 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

This morning Cryptospend announced a new $5 million Series A capital raise, which its two founders informed Stockhead comes 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 layoffs 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 17x on its user base in just one year, expanding from 1,000 users to more than 17,000 active customers across Australia, with the majority of those coming on board since October last year.

It’s also achieved a 6x on revenue since Q2 last year, has tens of millions in transaction volume with average card usage of 36 times per month per user, and it’s grown its staff from just four at the start of 2022 to its current 15-strong team.

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, as well as international expansion – first of all, 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) that Grech and Voice founded and launched in 2020 – just two years after they struck up a friendship while studying at UTS.

One thing we had to ask the duo was: just how the hell did such a young company manage 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, plus how you can earn XRP rewards simply for using it, take a quick gander through the firm’s website. 

 

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.

 

 

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