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2019 Shareholders letter - Bitkub is profitable

Dear Shareholders of Bitkub, As I am writing our 2019’s annual shareholders letter, the world is facing a huge unprecedented health as well as economic crisis. I wake up every day social-distanced from friends and co-workers, hoping the world will recover quickly from its downturn. My heart goes out to all of those deeply impacted by the COVID-19 crisis. Amidst all this, the cryptocurrency industry, and Bitkub in particular, are less affected by the impact of COVID-19. We were fortunate to have developed a long-term digital vision for our company and constantly embraced digital tools, systems and practices necessary to support upskilling needed across the teams. 2019 marks a significant year in Bitkub history. It was the year that we became profitable as a company. It was the year that we became the largest cryptocurrency exchange in the country. It was the year that we received The Organization and Executive of the Year Award. It was the year that we established many long-term partnerships. And most importantly, it was the year that we welcomed our 100th employee. We are on the right track, doing the right work. It is important that we take some time to reflect on all of the things we have accomplished together over the years.

In this letter, I’d like to discuss the following: 1) Measure our company by the free cash flow, and the importance of building cash moat

2) Be customer centric

3) Focus on employees

4) Our 2020 focus, and the cryptocurrency future

1) Measure our company by the free cash flow, and the importance of building cash moat At the end of 2019, Bitkub reached an important inflection point. After almost two years of investing greatly on infrastructures, nurturing the best teams, and single-mindedly focusing on growth - we ended our 2019 year with profitability. Everyone at Bitkub worked hard, and is proud, to achieve over 1,000% growth in revenue, customer base, number of transactions, and extended our market dominance to over 90% despite aggressive competitive entry. We exceeded our goals for the year with a pro forma net profit of 3 million THB, despite having spent over 47 million in 2019 and 43 million in 2018.

Prioritizing free cash flow when running the business will allow us the ability to experiment and innovate quickly — building a long-term competitive advantage. In today’s fast-moving world, it is important that we bet on ideas with limited downside and unlimited upsides. While most startups prioritize metrics like growth and user acquisitions, Bitkub aims to be financially durable and growth-ready by focusing on free cash flow. We have been focusing on reducing our OPEX and CAPEX, throughout the 2019 year, to give us the advantage of free cash flow to experiment and take risks without affecting our NCR (Net Capital Ratio). We will balance our growth and cost reduction, to improve our bottom line and simultaneously accelerate growth in our business.

2) Be Customer Centric

From the beginning, Bitkub has always been a customer centric company. We set out to offer the best possible cryptocurrency services that our customers could not get on any other exchanges. For example, our fiat on ramp solutions allow customers to instantly deposit and withdraw funds to any of their thai bank accounts in a matter of seconds, 24/7. We also dramatically lowered the crypto withdrawal fees, further increasing customer value. Word of mouth is the most powerful customer acquisition tool we have, and we are grateful for the trust our customers have placed in us. Repeat usage and word of mouth have combined to make Bitkub the market leader in digital asset exchange in Thailand. By many measures, Bitkub accomplished a lot in 2019:

​1. We established long-term relationships and became the only-country’s official partner with many important strategic partners, including Ripple (Ripplenet programme), Finansia Syrus (traditional brokerage firm), R3CEV (Corda), Thai Fintech Association, Central Group, Siam Commercial Bank, SIX Network, Deemoney, Power Ledger, and True Digital Park.

​2. Bitkub employee base grew from 40 to 100, and we look to strengthen our management team in the years to come.​

3. We launched the first mobile trading application in Thailand supported by both Android and IOS that enables trade whenever, wherever.​

4. We added 30 digital assets on our exchange, with by far the most liquidity in the market. ​

5. We connected our exchange to every bank account in Thailand.

Leading with integrity, we are a strong believer that the interests of our shareholders and employees are significantly correlated to how well we treat our customers. If we do our jobs right, today’s customers will be frequent users of our products and will invite more customers in the process. This practice will generate more cash flow and long-term value to the shareholders and employees. You cannot do one without the other.

3) Focus on employees A company is when a group of people come together, with a mission, to solve specific problems. If I was limited to only having one focus as a CEO, I’d choose to focus on people. My job would be to attract and keep talented team members to run various operations in our company. Great people make great things, and thus a great company.

We know that the right players will make almost any team manager look good. I’m fortunate to be surrounded by an amazingly talented and diverse team. Importantly, we have just welcomed our 100th employee. This is a key milestone for us as a company. Apart from the market cap, the number of employees is an interesting indicator of a company’s potential. Bitkub has just entered its third fruitful year, and now we are 100 people strong.

We will continue our practice of working only with people who bring positive energy to the team - those who we like and admire. This practice ensures good results and for sure ensures an extraordinarily good time. We invest significantly in training and nurturing our workforce through continuous learning, teamwork and mentoring. With Bitkub, opportunities are endless. We believe in the philosophy of David Ogilvy: "If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But, if each of us hires people who are bigger than we are, we shall become a company of giants." My main focus in 2020 as a CEO is to expand the company to 150-200 people, shifting my role from being a time teller to becoming more of a clock builder. I look forward to updating you all with the results in the years to come.

4) Our 2020 focus, and the cryptocurrency future

Ouch. 2020 has been a brutal year for many companies around the world. As of this writing, more than 10% of the world’s population lost their jobs, and within a few months most companies will be running out of cash. Nevertheless, by almost any measure, Bitkub is in a much stronger position now than at any time in our history.

2020 is the year that we focus on building our cash moat, with our current run rate almost twice our burn rate. We expect to stay lean and keep our OPEX/CAPEX fixed while we scale our company’s turnover volume. Our revenue has been growing in a healthy manner month over month, and by June this year, we will have made all our initial investment back (both seed and pre-A) of 117 million THB. So far our up to date performance for 2020 reflects exactly just that.

Our company is better positioned today than it was a year ago, and the cash piles that we have been building and continue to grow will prove to be crucial for our employees and the company in times of crisis. Cryptocurrency Exchange is a scale business characterized by high fixed costs and relatively low variable costs. This makes it difficult to stay competitive in the long-run, to be a medium-sized company. With a long enough financing runway, we can acquire enough customers to achieve the needed scale without relying on the risk of the capital market shutting its doors. We have a plan to continue to grow our market shares by optimising for growth but without compromising on our yearly net profitability. This is a tough challenge to achieve and there can be no guarantees. The way we plan to achieve this is by automating as many functions in our company as possible to reduce our OPEX/CAPEX, and eliminating errors at their roots. At Bitkub, we have been doing a better job of eliminating errors and mistakes - 2020 has been our best year yet. Eliminating the root causes of mistakes and maximising the velocity of information will save our company’s time and money. This is our top priority, and every person in the company is committed to helping with these goals. I look forward to reporting to you our progress at the end of this year.

Now, let’s talk about the future. Why are we so optimistic about cryptocurrency? Industry growth and new customer adoption will be driven over the coming years by the arrival of digital yuan, libra, central bank digital currencies, and open sourced blockchains. Traditional financial systems have been broken for a long time, especially in developing countries. Currently more than 1.7 billion adults globally remain excluded from traditional banking, even though one billion have a mobile phone and nearly half a billion have internet access. We are entering a new fintech era where digital currencies are proliferating. Bitcoin and other cryptocurrencies have been touted as the future of money, with Blockchain as its groundbreaking underlying technology. We are on our journey to digitize and foster truly borderless and global transactions may it be for currency, assets or anything of value. Similar to the internet, we will go through a pivotal period of transformation.

Finance 2.0 will become programmable, interoperable, and upgradable. Bitkub hopes to be a bridge to finance 2.0 by building innovative but also safe and compliant financial applications that can serve everyone.


Bitcoin Blockchain has been around for just a decade, and already over 50 million users/wallets worldwide were created. In the upcoming decade, we foresee the number of users to hit 1 billion worldwide whether direct or indirect. Most tech companies and social banking apps will humanise crypto components to their products. Sending value across the internet will be as easy, global, and instantaneous as sending an email. To formally close, we believe that the current financial service experience is the worst it will ever be. It can only get so much better from today. We will see significant growth in data, in mobile devices, in internet access, and in blockchain technology. We are excited to be participating in this multi-trillion dollar global market. We have a firm belief that the world of finance is changing and we are on the forefront of this groundbreaking evolution.

2019 was indeed an incredible year. The world needs to know more about the incredible story written here at Bitkub. We are grateful to our customers for their trust, to bitkubers for our hard work, and to our shareholders for your continued support and encouragement. How we write the next chapter matters more than ever this time. We look forward to continuing the work and delivering value with all of you.


Founder and Group CEO of Bitkub

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