Bear Market: crypto companies defying the laws of gravity

If you talk to an entrepreneur in the crypto universe, they'll probably tell you that these are tough times, and they're totally right.

For the past year and the fall of FTX, all the industry's indicators have been in the red: prices, investments, interest from the general public.... Everything has gone down 🙃.

While some "small" players - like Kanji - have gone out of business, others have scaled back to adapt. This is the case of Coinhouse, Ledger, OpenSea and so many others.

But in this context, some still manage to survive, and even grow (yes yes it's possible). We interviewed their bosses to find out why and, above all, how they managed to do this.

Little spoiler: all the companies we interviewed have at least 2 things in common. Can you guess which ones? 😏

👉 Bitstack (bitcoin investment app launched in 2022)

Alexandre Roubaud (CEO): "There are several elements that explain why we're doing well, but I think the most important is the fact that we've developed a consumer solution that allows a non-expert target to get into crypto.

We have a very clear value proposition with a bitcoin savings account. This strategy has enabled us to reach out to a more traditional, bank-based audience who can gain exposure in a simple way, whatever the situation on the markets. The arrival of neophyte investors looking for a sort of crypto Livret A savings account has moreover greatly offset the loss of more crypto-native users.

We have an average basket of 100 euros per month per user, and that's growing all the time. We have real recurrence, which is not the case with Exchanges, which have seen their volume fall sharply because of volatility and falling prices. Our average monthly growth in the number of active users is 15%, as is our growth in volume. We now have more than 50,000 active accounts.

Launching during the Bear Market was almost a stroke of luck because we learned to do more with less to conserve cash. We were never euphoric. There are nine of us in the business, and we really do recruit when absolutely necessary. Even though we've raised €1 million twice, we're very careful about spending, particularly what we invest in customer acquisition."

👉 Cross The Ages (card game launched in 2023)

Sami Chlagou, (CEO): "Our success is not really by chance. We created the company in 2020 with the ambition of building a real universe. It's not easy because you have to manage to bring together the best authors and illustrators, and that's what we've done with science fiction geniuses like Pablo Servigne and Alain Damasio. We've even just signed with Hachette to release a book in 14 languages, and there's a huge amount of anticipation.

The Cross The Ages game was launched this year, right in the middle of the Bear Market, and yet we've already sold 21 million cards, and their value continues to rise. The game is a huge success, and we're already profitable with a company of 80 people, 70 of whom are in France. We've hired just over 20 people this year alone.

One of our other strengths is that we're not a "Web3" or "crypto" game, we're not correlated to the market. We use blockchain technologies, but that's secondary to the story and gameplay. We have 60,000 monthly players. Our aim is to multiply that figure by 10 over the next few months.

👉 Taurus (crypto services platform for financial institutions launched in 2018)

Lamine Brahimi (CEO): "We are 4 co-founders, 3 of whom have solid experience in the traditional financial sector. From our launch in 2018, we were convinced that the development of the crypto industry would largely involve the tokenisation of unlisted assets.

We anticipated the specific needs of the market by building and constantly evolving our product. While the tokenisation of assets is now a matter of course, we have come a long way: two years ago, only 10% of our customers were using our platform to tokenise assets. Today, 80% do 🚀.

The fact that we positioned ourselves very early on has also enabled us to build a solid reputation over the long term by not spending too much money on marketing. Beyond that, we're not one of those start-ups that spends its money lavishly. We're very cautious, which means that in more difficult times, we have the means to invest.

Currently, our sales are showing double-digit growth. Last year, we had three offices in Switzerland alone. Today, we have seven, including one in Germany, France, the UK and the United Arab Emirates. Two years ago, there were around thirty of us in the company. Today, there are more than 80 of us."

👉 Meria (crypto investment platform launched in 2017)

Thibault Boutrou (COO): "Meria (ex-Just Mining) is doing well, we're breaking even, and I can see several explanations for that: the first is obviously experience. We've been here since 2017, so we know how to manage both operationally and psychologically this kind of complicated phase.

We knew that the Bull Market wasn't going to last forever, so we didn't hire too massively. We know our market, and just because there's a bull market (2020-2021, editor's note) doesn't mean we have to spend lavishly. It's also a question of resource management.

The second explanation is that we have a dual activity. On the front, we are an investment company, but behind the scenes we are primarily a technology company, and even in Bear market things happen, protocols evolve, so we continue to work, particularly on infrastructure.

The third explanation is linked to our growth model. In six years, we've never raised any funds. We did a small round this summer, but otherwise we've always had a fairly cautious approach, with a desire to control both our capital and our pace of growth while others find it very difficult to do so.

This year, we've recruited just under ten people. There are 40 of us in the company, and there are still six open positions.

👉 Flowdesk (crypto market maker launched in 2020)

Guilhem Chaumont (CEO): "I'd say there are two things. The first is the team. It's all very well to have the best product, but in a complicated macro context, it's also very important to have the right team. It's the law of chaos: when the context is complicated, people reveal themselves, and that's when you see who's important. There has to be total alignment with the vision and objectives of everyone in the company. That's fundamental.

The second thing is that we do everything to decorrelate ourselves from the market, both in terms of mindset and business, which is quite paradoxical for market makers who have their eyes riveted all day on market figures.

But this mindset is super important. I keep repeating it, we don't have tokens, we're not on Twitter, we're focused on a product that is used in Bear or Bull Market. The companies that have done best over the past year are those that have been the least opportunistic and focused on the long term.

Our bet is that the crypto universe and traditional finance will come together. We want to become the JP Morgan of crypto. The fall of FTX has had a big impact on our competitors, but not us, simply because we do market making as a service, and not direct market making where we invest our own money.

It's less profitable when the tokens take off, but it's much more resilient, and above all we're cheaper since we don't provide the capital. It's interesting in Bear and Bull Markets.

👉 Finary (wealth management app launching in 2021)

Mounir Laggoune (CEO): "We've followed the adage that when money is available, take it and then get back to work. In 2021, we raised one fund after another. For the past 18 months, we've been very frugal, taking the time to recruit well and above all to develop our product. On this point, we have operated from the outset with a paid subscription, which has enabled us to generate revenue from our users.

We have also endeavoured to think long-term. That's what we did when we decided a year and a half ago to launch a crypto investment offering, which has been available to our customers for a few weeks now. The point for us was to be ready when the market took off again. The danger when you evolve your product is that you move too quickly away from your core business, which for us is wealth management.

To take the crypto example again, we only offer cash investment. The risk is in trying to attract all types of investors. In reality, these are strategies that can quickly prove costly and not necessarily profitable. In our case, we are targeting a public of first-time investors ready to deposit several thousand euros from the first deposit with us.

A year ago, there were 8 of us in the company. Today, there are around thirty of us with a user base that has grown from 30,000 to 250,000 over the same period."

👉 Trade Republic (financial investment platform launched in 2015)

Matthias Baccino (Head of European Markets): "We don't disclose all our figures because we're not listed on the stock market, but Trade Republic is doing very well because we made two strong choices. The first was to adapt our model to the economic context. In April 2022, 18 months ago, we cut costs, particularly in marketing, and stopped hiring, even though we raised €900 million in 2021 and Trade Republic is profitable. We can't stress this enough, but we're making money with just over 500 employees.

The second is our product strategy. We have put the emphasis on ETFs and programmed investment, in equities and crypto (Bitcoin and Ethereum), which allows us to have a counter-cyclical business. Our business is not dependent on any hype like NFTs or meme stocks.

We don't need the markets to get carried away for our clients to want to invest in Dollar-Cost Averaging ETFs. It's really part of our culture and our long-term vision of investing. Paradoxically, our model in no way prevents us from allowing our clients to engage in active trading, quite the contrary. In fact, that's what we've been seeing in recent weeks, especially on cryptos."

👉 FeverTokens (smart contract platform for businesses launched in 2022)

Zakaryae Boudi (CEO): "At FeverTokens, we believe that financial infrastructures will become increasingly open-source. This is our long-term conviction and it's what drives our business.

Since our launch in March 2022, we've turned down a lot of projects, particularly in NFT or artificial intelligence, that didn't fit with this vision. It's complicated to stick to it, because we've had to turn down money, but that's also what's made us so successful.

As we're still a small team of 7, it's essential not to spread ourselves too thin by staying focused on our core business of designing smart contracts for financial players. We must not hesitate to be very demanding in our choice of clients. We only favour projects that are the most technically complex to implement.

This line of conduct has led banks such as Société Générale or Crédit Agricole to come and work with us. When you have a demanding and clearly identified positioning, reputation quickly follows. Since the partnerships with these banks were revealed, we've had a lot of demand. Since the start of the year, we've had quarterly growth of almost 200% in the number of our users and we're going to double the number of staff in the coming months."

👉 Kiln (staking platform launched in 2018)

Duncan Hoffman (head of revenue): "We're obviously riding the staking wave which has been exponentially successful since Ethereum was updated in 2022. In just one year, our revenues have increased fivefold and our customer base continues to grow. When you're in a market with this kind of growth, the danger is to just ride the wave and not look to differentiate yourself from the competition.

To continue to be successful, we have two principles. The first is that we constantly adapt to our customers (businesses) with a highly technological approach. The second is that we have particularly high standards, especially from a technical point of view.

Evolving the corporate culture is also essential, especially when you're experiencing major growth like ours. Before the Bear Market, we were a small company, and today we're over fifty. We have evolved our organisation and internal processes.

👉 Bigblock Datacenter (bitcoin mining company created in 2017)

Sébastien Gouspillou (CEO): "Overall, we have two activities in which we have acquired real expertise: bitcoin mining operations and the sale of mining machines. Today, we have a solid reputation, which allows us, every year, to win new customers and find new installations for our farms.

Bitcoin mining, is above all a matter of experience. 2018 was a pivotal year because we experienced a very tough Bear Market. But it also taught us a lot of things, not least the fact that Bitcoin miners have no control over anything except the price of their electricity. And how do you get the cheapest electricity at the most stable price? By mining using surplus electricity from renewable energy sources.

This is what we have been doing for several years now, and it means that we hardly need to worry about the Bitcoin price. In 2023, our sales grew by around 40% compared with last year, which was already a historic year for us. Today, there are around fifty of us working in the company.

So, do you have any points in common? Don't hesitate to send them to us (especially in the Discord) and share the info around you 😎.