Editor’s note: The San Francisco Business Times produces an annual list of the 100 fastest-growing companies in the Bay Area. Here’s an interview with the No. 1 company for 2022. Click here to read about others on list.
In November 2021, bitcoin reached a record high of $68,000. A few months later it had plunged in value, followed by dramatic price falls in other digital assets. Several digital currency exchanges went out of business as investors scrambled to retrieve their funds.
Against these swirling headwinds, our fastest-growing company has racked up some incredible growth figures.
Uphold, a multiasset digital trading platform based in Marin County, was founded in 2014. It has more than 1.7 million customers and revenue that has increased from $11 million in 2019 to $257 million in 2021.
This growth appears even more remarkable given some of the recent challenges the company has faced. In May 2021, it parted ways with its chief compliance officer amid allegations of the fraudulent misdirection of bitcoin worth $700,000. Then in February 2022, J.P. Thieriot stepped down as CEO.
His replacement, Simon McLoughlin, is confident that the company will weather the storms in the digital asset markets and continue to grow.
Congratulations on being our fastest-growing company. How do you reflect on that? I think it’s amazing and I think it shows the power of when you’ve got a business that has global distribution and financial content that people want to interact with. And when you’ve got a very friction-free way of onboarding people, guess what? Things can scale very, very quickly.
Will volatility in digital markets impact future growth? This year, the market’s been more difficult, but we’re still going to have a good year, given the climate, because of the scale and reach of the operation. This year we’ll still be five times bigger than we were in 2020.
What’s it been like working in this space given all the recent tumult? You’re basically sailing through a hurricane. I think we are lucky in the sense that we’re differentiated. One of the things we’re very strong on is alt coins. The other thing that’s helped us, and this is in many ways the most interesting part of our business, is enterprise adoption of cryptocurrencies for payments.
What else sets you apart? We don’t have our own order book. We’re connected into 28 underlying exchanges. When somebody places an order, we smart route the order to be most price efficient. Secondly, you get superior liquidity. There have been instances recently — Luna’s a good example — where exchanges had trouble sourcing liquidity when people were trying to sell. Because we had access to 28 order books, we’re able to provide customers with liquidity when it matters.
How are you preparing for increased regulation of digital assets? Some prices have fallen significantly. But that’s not the real story. The real story of this year is that for the first time regulators in this space, instead of standing on the sidelines, hoping it would all go away, are now busy making rules.
In Europe and the U.K., NFTs will shortly be able to represent financial transactions. It’s a huge step forward. It means that NFTs are a thing recognized by law. So we are hiring to support a major push into NFTs. We are preparing for an era when a lot of regulated securities will go onto the blockchain.
What else are you doing to keep customers informed? The origin of Uphold — it was set up in the aftermath of the 2008 financial crash — is the concept of radical transparency. So we are the only platform in the world that publishes our customers’ assets and our liabilities to customers in real time, on a public website. So you know your money’s there if you want to get it. We don’t lend it out to any third party. And we show you literally on a public website in real time that we are holding this many bitcoin and these are our obligations.
What new clients have you worked with recently? We’ve won contracts with some well known gaming companies such as Mythical Games, IMVU and others. We are helping them move from a Web 2.0 model to Web 3.0. What that means is they’re swapping out in-game digital assets that have no value outside the game into NFTs. Gamers can buy NFTs, which endow them with special powers.
Will the reputation of digital assets improve? Everybody thinks about cryptocurrencies as a vehicle for speculation. That’s a byproduct. That’s not the purpose of blockchain technology. And I think the next three to five years are going to see the serious adoption of the technology for real world purposes.
How much further does this technology have to go? If you draw an analogy with the internet, I think we’re in 1997. And just as the tech boom went through a brush fire, that weeded out a lot of the weaker players. For the firms that are still standing, it’s never looked brighter because what’s held it back up to now is a lack of regulatory clarity.
I think there’s a very clear recognition now that digital assets are here to stay. Blockchain technology is here to stay. And if you’re a corporation in this space, you’re thinking this is actually a technology I can adopt because there are rules that are sanctified. So I think the next three to five years is going to be incredibly interesting for this sector because you’ll get true adoption of blockchain technology for the purpose for which it was intended, which is utility and moving money more efficiently.
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