FinTech Silicon Valley podcasts are focused on educating and highlighting FinTech in Silicon Valley to the global community both through video and audio. The podcasts & video interviews are short and fun, one on one interviews by FinTech Silicon Valley journalists with experts and investors on how they are contributing to the community and what their perspective is on the future of FinTech.
Max Krupyshev, CoFounder/CEO of the crypto payment ecosystem CoinsPaid. He is a serial entrepreneur with long-standing experience in developing fintech and crypto projects. Having entered the world of crypto in 2013, he stood at the origins of this market in Ukraine, launching a Bitcoin Foundation to promote crypto adoption in the country. Before joining CoinsPaid, he was the product owner for CEX.IO, a global cryptocurrency ecosystem and market leader. As the CEO of CoinsPaid, he sets the goal for the company to become the connecting link between crypto and traditional businesses.
Transcription
Pemo: Welcome Max, so great to have you on the show today. I was wondering if you could tell me a bit about your history in the ecosystem and also about CoinsPaid, what you guys do?
Max Krupyshev: Yes Pemo, thank you very much for having me on the podcast. So myself, I’m involved into cryptocurrency, at that time it was blockchain, or rather only Bitcoin. It was 2013, I got curious about what is mining. Then started basically reading, watching the videos which were available there. I’m from Ukraine, so it all started in Ukraine. The community was not pretty much existent, so I founded Bitcoin Foundation Ukraine, sort of create a platform for entrepreneurs who are willing to do anything with Bitcoin and then basically worked in the mining pools, in the exchanges and the wallets and so on. And then ended up one of the co-founders of CoinsPaid.
Pemo: And tell me a bit about CoinsPaid, what you guys do?
Max Krupyshev: Yeah, so it’s mostly the payments infrastructure. So we are utilizing cryptocurrencies and blockchains only on the level of the logistics sense of blockchains, but also helping the adoption quite a lot. So the whole idea of the infrastructure is that we work with different blockchains. There is a system which allows you to exchange cryptocurrencies, to hold cryptocurrencies, but also exchange and hold fiat currencies. So it allows businesses to use cryptocurrency as a payment method to receive or to send, depending on the type of the business, but also allows businesses to maintain their portfolio in cryptocurrency. So if some company has some activities connected with crypto assets, they can use our system to receive, store and send crypto, and then in the end of the month receiving nice reports that they can submit to the regulator, to the tax office and so on. So this is very briefly, the strong side of what we do.
Pemo: And so would that be classed as DeFi?
Max Krupyshev: No, we are not really doing a lot in the Web3 DeFi. So we work with blockchains and cryptocurrencies and being pretty much how it’s called the on-ramp and off-ramp for crypto.
Pemo: No problems. And I know that the whole ecosystem has been going through quite a big change, particularly here in Silicon Valley. We’ve got a lot of tech companies laying off people over and over again. And also these dramas or stories that are coming out that some of the big tech companies in Silicon Valley have hired people just to take them off the market and they don’t have anything to do, or didn’t have anything to do. So what’s your overview on this and also what are you doing regarding hiring?
Max Krupyshev: See, it’s probably worth mentioning a bit where we are in this infrastructure ecosystem. We are working with more classic businesses, so they might not be entirely connected to cryptocurrency world. So those are international businesses who do maybe not so technical business, like e-commerce, marketing solutions, software development studios and so on. So they are not so much hit by the crypto crisis or the banking crisis and so on. So we mostly ride the wave of adoption, not so much financial cycles and not so much crypto bull or bear markets. So how it really works when crypto market is booming, our revenues don’t grow with the same speed. But also when the markets are struggling, our numbers are not decreasing. So in this sense, when the last year was for crypto, very, very bad, we doubled in size of the revenue, of the number of transactions and of the people. So beginning of 2022, I think we had slightly over 100 employees, right now we have 230. So it’s a bit sort of disconnected from the hassles that we see with the B2C markets.
For example, with the Coinbase, I know that the guys are struggling, I would say. So speaking about the layoffs, of course, when your revenues start to drop, before they hit the red line and your profits, of course companies and the CEOs, they decide to start shrinking the costs. And of course for the technical organizations usually staff is the big share of the cost. So in this case, of course, for us it’s as well the biggest one. And if we had to probably will be starting from optimizing the cost for HR but we didn’t have this issue.
We also saw that not only in the Silicon Valley, it usually starts from the west of US. But in Europe we also had some layoffs and some companies just skipping the rounds or missing the investment rounds and closing the doors completely. So we saw some good chunk of talent on the market from the crypto space and from the technical space. We managed to close some very high profile positions like a Deputy CTO, like product managers and so on. But we of course, were not hiring people who don’t have anything to do. So we are just few more things, few more things, why it might be completely different. So we never raised money, so we are not VC inflated business.
Pemo: Oh, very impressive, okay.
Max Krupyshev: So we have 230 employees right now. So you can have the feeling of the size of the business and operation. We completely started with initial below one million investment and we just hit the break even after almost one year. So the budget was enough for us to survive from that money, and that is why we never hired people upfront. We never spent money in a crazy way just to increase the valuation, to get the better rate for the next round. That is why all the spendings, they were sort of thought through. So if we need a person, we understand exactly why. We understand exactly what the job would be about and what is the value that we expect from the position? And if you do these things on the entry, then you pretty much know why you have those people in the first place and you will need to fire them only because the things that they do, you don’t need anymore.
Pemo: Got it. Well that’s a very careful approach. Obviously that’s not been happening in Silicon Valley. And as you said, also there’s layoffs in Europe. So yeah, really talent is so important and it seems that I guess the big tech companies had more money than sense.
Max Krupyshev: Yeah, I mean when you become really big and when things are going your way, you see that the capital markets are very much alive, it’s very easy to raise money, it’s very easy to show quick results. What I see, especially from US, that companies just slightly overdo the scaling. I mean we were not able to afford it in the first place. But in the second place you have… It doesn’t make much sense. But we see for many projects in US, this approach completely worked. The companies which were burning millions every month ended up to have great investments. And after having million of users, they started to do the monetization.
We see this happening with Instagram, it was completely free for years, right now you have to pay for the ads there. With Twitter, I mean it pretty much was free for how many years. And right now you even have the premium accounts, monetization tools and so on. So many companies who grow with this sort of idea that we will now be very cheap or completely free. We raise money, we raise money, and then we will understand what to do. Or even the founders will exit during one of the rounds so that they are not so much interested what would be the future of the business. And this is dangerous and risky approach as we can see, especially in the blockchain and Web3.
Pemo: Yeah.
Max Krupyshev: Because what we saw-
Pemo: So a lot of people got burnt with FTX. Obviously you guys weren’t affected by that, is that correct?
Max Krupyshev: Yes. We never had business with FTX. That is why we were not so much affected, but also the snowball which sort of started accumulating after the FTX, we saw a few other funds and companies collapsed because of the money which were stuck at FTX. We were extremely lucky not to be exposed to any of them.
Pemo: Great credit to you. And the other thing I’d like to ask you about, just the great contribution that Ukrainian entrepreneurs have been contributing to the ecosystem. I’ve interviewed a few and really appreciate the fact that you’ve come out of a devastation with the war. Do you have any thoughts or words you want to say about that?
Max Krupyshev: I mean, it’s very hard to commend that. I mean Ukraine, despite being outside of European Union, despite being outside of the NATO, and pretty much if you are entrepreneur in Ukraine, you are a bit disconnected from big VC money. Because if you are European, then European investors would be more likely to invest in you. If you are in US or from US, you are more likely to raise money from US investors. For Ukrainian entrepreneurs, this is a bit of a challenge, right? Because you don’t have access to the market. The whole VC game in Ukraine was looking very strange for many, many years. You were like the people were raising seeds of $20,000 sharing the terms of the company. So just imagine you have the evaluation of the company of around quarter million. It probably never happened in US. So that is where just the difficulty is a bit higher.
So all these people who are building European businesses, US businesses from Ukraine or being Ukrainians, of course they were always trying to get connections in Europe or US. And right now is the start of the war. Of course Ukraine infrastructure, ecosystem is not self-sufficient. So international business or the size of the company, of the usual one that can work in the whole world. Ukrainian market is just not enough, especially with cryptocurrencies.
We don’t have any big companies in the space operating in Ukraine and for Ukraine. So many entrepreneurs were always sort of moving around on the events and so on. And right now is the start of the war. Everyone has teams there, developers, account managers or whoever. So it’s been really hard. We also have few people in Ukraine who you have to help, who you have to increase the salaries and help them with the internet, help them with the logistics to be more safe because male are not allowed to move from the country. So we see the huge community of the entrepreneurs who are helping in the way they can. We sort of help each other. We have communities in every country, in every industry where we support each other. But Ukrainian entrepreneurs, in my opinion, were always extremely ethical and extremely helping the roots.
Pemo: Right. So good, thanks for that feedback. And yes, I have been following it in the news, the struggles that Ukrainian tech people have that are still in the country and my prayers go with them, that this war finishes soon. And Max total delight to interview you today and all the best with CoinsPaid. I think you’ve got a great model that will withstand all these ups and downs in the market.
Max Krupyshev: Thank you very much Pemo. It was a pleasure.
Pemo: Yeah, have to come back soon. Thank you, bye.
