Making Bitcoin accessible: Interview with Relai CEO Julian Liniger

Alex (00:01.282) Hello and welcome to a new episode of Bitcoin Fiat and Rock and Roll. As many of you know, we have decided to switch completely to English with this podcast and to allow an international audience to follow as well. And this is also why our guest and the topic of today’s podcast fit perfectly. Even though we have actually agreed to do this podcast while we were still a German speaking podcast, but Julian Liniger, the CEO of Relai and our guest today is flexible enough to switch to English. So first, thanks Julian for being here today and for doing the podcast with us. Julian (00:38.562) Thank you Alex for inviting me and of course flexibility is key, right? Alex (00:41.934) Okay, that’s it. And I have heard that you are planning with Relai your European expansion. So I would even say it’s a perfect fit today that we make this available to people outside the German, Switzerland, Austria region. Julian (00:54.37) Yes, sir, absolutely. But it’s interesting that the EU expansion is including all these countries with all these different languages and actually none of them is English speaking, right? So the UK expansion, of course, needs to unfortunately still wait a bit. But that’s also that’s one of the challenges, right? We can’t, of course, cover all the different languages. English, I guess, is good enough. Alex (01:08.108) Yeah, it’s true. Alex (01:21.582) Yeah, I definitely want to know more about this expansion. Also the hurdles you see and the complexities and the regulation. We’re going to discuss that later. And we will also talk a bit more about you personally later. I just want to make sure that I get the main facts right about you. So you are Swiss. That’s maybe the first interesting fact. Where exactly in Switzerland have you been born? Julian (01:43.276) Yes, I’m born and raised in a very small town called Arberg, which, you know, with like four, maybe now 5,000 inhabitants in the canton of Bern, so close to the capital city of Switzerland in Bern. And I still live in this canton, just in another smaller city called Biel, which is basically, you know, a town between Bern and Zurich and we have our offices in Zurich. But yeah, my upbringing is in a very small countryside village with four or five thousand people. Alex (02:16.174) Yeah. I mean, it’s funny that you say a small village with four or 5,000 people, because for Swiss standards, I would say that’s already at least a town, if not a city, right? If it’s 4,000 or 5,000 people. Julian (02:25.55) Yeah, it’s definitely not a city. think a city would be from 15,000 onwards. You could call yourself a city. But yeah, it’s a town. It’s maybe not a village, it’s true. So actually where I really grew up and did kindergarten was in Kaplan, just next to Arberg. When I grew up there, was like 900 people. Alex (02:31.554) Okay. Julian (02:49.366) So yeah, this was definitely a small village, then yeah, if you talk to an American, like four or 5,000 people, it’s not even a village for them, right? Yeah, it depends on the perspective. Alex (02:49.518) Okay, okay. Alex (02:57.39) No, it’s true. So a young Swiss citizen currently at the age of in your early 30s, I believe, 32, I once heard that you became a Bitcoiner in 2015, so roughly 10 years ago. So how does a young Swiss guy in his early 20s, coming from a small village in Switzerland become a Bitcoiner? So early actually, 2015. Julian (03:07.694) Yeah, 32. Julian (03:24.034) Yeah, actually, just talking to a friend of mine, a friend of mine was a techie. I’m not a techie. haven’t I have studied psychology and business administration. Actually, at the time, I was, think, in my first year of university, very interested in psychology, but also in business. And so also in, you know, stuff like finance, trading, stocks, etc. Just got it got into this whole thing beginning with my 20s. and I was sitting in the living room of a friend of mine who was a techie. He was a pure techie, he studied computer science and he was one of the people because I knew him from first grade and already in first or second grade his parents had a computer. There was one of the, he was one of the only guys that had a computer. you know, I feel really old now talking, talking about this, but back then no one really had a computer. My mom got a computer when I was in like probably fourth grade or something. And then we started exchanging emails, but he was already, he had a head start off a few years. So, and he was always super interested in computers. And so we were gaming a little bit and like just talking in this, I think it was some, it was summer or. or spring 2015 in his living room. then we started talking about cryptocurrency somehow. And he showed me Bitcoin. He owned like 10 or 12 different coins. And he showed them to me. He showed me Bitcoin, but he showed me the other coins. they don’t even exist anymore. Alex (04:59.47) Yeah. And there were, mean, 2015, we did not have 20,000 cryptocurrencies, right? We maybe had a hundred at best. I can’t remember. So he was quite active if you already own. He was a very early shit coin apparently. Julian (05:07.448) Exactly. Yeah. Absolutely. Ethereum wasn’t even there yet. Ethereum was launched, I think, 2016. it’s, believe, Nemcoin, I think, was pretty big back then. He had all these, I mean, meme coins were already a thing back then. There were these coins with these flashy logos that had no, that there was no purpose for it at all. was just jokes. Alex (05:24.258) Yeah. Julian (05:37.442) But anyway, you showed it to me and I was fascinated by this kind of blockchain technology and just having an asset that basically every second has a new price. So it’s a kind of, you can trade it 24 seven, you can hold it yourself. You are independent from banks and governments. No one can kind of seize it or freeze it or confiscate it from you. No one can block transactions. No one can just… print more of it, you know, so I was, and you can trade it 24 seven, can, you can buy stuff on the internet. You can take it wherever you want transact worldwide. It’s super global, digital, sort of asset or money or whatever. I found it super fascinating. So I went out and kind of did my research and like a week later, I asked him to buy a Bitcoin for me because I tried, but it was too complicated for me again. I was not a techie, right? It’s too complicated. I gave him a Bitcoin was like 500 bucks then. I gave him 500 Swiss francs. I went to the bank with drew 500 Swiss francs in cash. Yeah, exactly. And so, yeah, he bought, he bought one Bitcoin from me for 500 bucks, but unfortunately I sold it again when it was in his up 10%. So he gave me back 550. I thought it was a great trade. Alex (06:44.878) So wasn’t an OTC transaction, so to say. Alex (06:56.77) Yeah. Alex (07:01.332) I can definitely relate to that. did that a lot. And I was already kind of fascinated by you kind of seeing that so early that it’s fascinating, but it’s like a 24 seven globally available asset. Because when I started, like got into Bitcoin, for me, it was just another speculative asset to buy and sell. And that’s what I did for a couple of years. So I’m also regretting that now, of course, but I guess that’s how there are very, very few people that kind of invested very early and still have these Bitcoins. Julian (07:28.692) Exactly. No, I also didn’t get it in the sense that I wanted to start investing because I believe like in 10 years it’s going to be a hundred K, right? I definitely didn’t see coming, right? But I thought it was interesting and I kept learning about it and reading about it, know, listening to podcasts. And then 2017 I was in Silicon Valley doing a strange semester when I did my master degree. Alex (07:39.363) Yeah. Alex (07:57.646) Cool, where exactly have you been there? Julian (07:59.406) in Marin County, a small town called San Rafael, like 10 kilometer north of San Francisco, and a small university, Dominican University of California, like 2,000 students, which they call a small university. And then this was 2017, summer to fall, to winter, and that was exactly when, like, there was this… Alex (08:14.061) Nice. Hmm. Alex (08:27.352) Yeah. Julian (08:29.282) bubble and hype around Bitcoin. Yeah, 2017 started with like one or two K per Bitcoin and ended with like 20 K Bitcoin. And I was there, it was really fun, know, a lot of energy, a lot of conferences, a lot of like ICO launch party kind of stuff, a lot of new podcasts, a lot of new… Alex (08:31.694) close to 20K, right? Julian (08:49.664) articles and blog posts every day and press releases and stuff like that. So it was super interesting also to be there at the heart of like the Silicon Valley, the entrepreneurial startup scene. And then that was, think where it really clicked because I look back and like, okay, in two years, a lot has happened actually, because two years ago, like when I got into it, no one was really understanding it. No one’s really into it. No one’s interested. If you ask Alex (08:59.672) Yeah. Alex (09:15.406) Hmm. Julian (09:19.406) 10 people on the street, no one, no one knew about cryptocurrencies. then in 2017, maybe at least half of the people would know about cryptocurrencies and Bitcoin. so I yeah. Alex (09:30.102) It was the first time, sorry to interrupt you, I think it was also for me the first time when I realized, think like major news channels, right? Like the 8PM news in Switzerland and Germany, they started reporting about bits, they started mentioning Bitcoin. I can still remember the day when it was the first time in the Targets show in Switzerland and also in Germany when they started mentioning Bitcoin and it was around that time. Julian (09:38.958) Yeah. Julian (09:51.214) Yeah, crazy, right? Yeah, absolutely, absolutely crazy. And then I thought, okay, if that’s kind of a, if it already exists for a few years, so it started really in 2009 and 10 and 2015, was, it went from 10 cents to 500 bucks. So more and more people were interested and only two years later, even more people were interested. So it looked like, it looked to me like kind of an exponential, growth journey, this whole thing. so, and so I was just more and more convinced. And that’s when I then started probably to the end of 17, beginning of 18 to look at it very seriously and really starting investing money. I still did a lot of shit with ICOs and altcoins and stuff like that. still wasn’t really Bitcoin only. but, but I started to invest long-term. and believe in it as a disruptive revolution, revolutionary technology and asset. So that was a good moment for me because I really finally understood it. Alex (11:03.48) Yeah. And then fast forward two to three years in, I think it was 2020, you together with, I think one of your colleagues, Adam founded Relai. So let’s maybe dive into what is Relai. I think you once said that Relai wants to bring Bitcoin to the masses. I’m not sure if that’s still kind of your vision and maybe you can explain how do you want to achieve this, bringing Bitcoin to the masses. Julian (11:22.177) Mm-hmm. Julian (11:29.304) That’s absolutely still our mission. We want to bring as many Bitcoin to as many people as possible. And we basically do that by just making it super easy for normal people out there to get started with Bitcoin. Because at the beginning when we started 2020, so I was already into Bitcoin maybe five years, and so people started to of course ask me, okay, Julian, you know about this Bitcoin thing, can you help me buy it? more and more people wanted to get some Bitcoin, to get access to Bitcoin, but it turned out to be super hard for like normal people. Like not everyone is a techie or a finance geek, right? For these people, there were the tools they used, you know, they could buy Bitcoin. I was able to, you know, have an exchange and buy Bitcoin at this point, but 90 % of the people, know, construction workers, carpenters, people that just work in an office, hairdressers, taxi drivers, these guys they had no idea how to buy a webcam but they wanted, the need was there and so they asked me how can I do it. Alex (12:39.608) think it’s also maybe for the international audience that might not have an insight into this. It’s also in Switzerland, but even more so in Germany, I believe many people don’t invest at all. It’s not like in the US where everyone kind of, it’s totally normal to invest into equity and stocks and everything. in Europe, maybe even Europe overall, I don’t have a good insight into other European countries. Julian (12:52.408) No. Alex (13:03.944) It’s like the share of people investing is very small or relatively small. that’s of course, I mean, Bitcoin is just another way of you have to open an account somewhere. You have to like pre-fund that account with money. You have to then click on buy and sell. Maybe there’s even such a thing like a limit on market order. And that’s way too complex for most people. Julian (13:20.396) Yeah, absolutely exactly. You describe it exactly right. And we wanted to make Bitcoin accessible and still today we’re going to make Bitcoin accessible for those people. We just wanted to make it super simple. You you can download an app within a few clicks. You have your account, you have your Bitcoin wallet and you can buy, sell, set up a savings plan weekly or monthly, know, automate your investment. You can get your Bitcoin, hold your Bitcoin, track your Bitcoin and send and receive and pay with your Bitcoin. Basically everything you want to do with Bitcoin just in one very simple mobile app. That was where it started. And now we kind of branch out to other customer segments as well. So we now serve not only like small retail investors like these people on the street, but also high net worth individuals with Relai Private. So these are people that want to invest 100k, 200k, half a million, bigger amounts. But also just in an easy way, Bitcoin only, the Swiss brand, they trust, regulate it and self-custodial, so they want to hold it themselves. These are our three core principles as well. And even businesses. So a bit more than a year, we also started with Relai Business. And around 150 to 200 businesses now are already onboarded and have added Bitcoin to their balance sheet. So basically it’s really about making it super easy for different customer groups to get into Bitcoin because we believe we’re still very early in this journey, only like 8 to 10 % of Europeans own Bitcoin. For businesses, it’s even much less. Alex (14:57.923) Mm-hmm. Alex (15:10.35) Yeah. Julian (15:10.67) And so we believe that in the next 10 years, this will change and it will be closer to 50 % of people and businesses. And that’s what we want to make, help make happen. So what you said initially, yes, we want to bring Bitcoin to the masses. Absolutely. Alex (15:24.942) Cool. So there were two main, so I’m an avid user of Relai. have been a client for many years and there were two reasons why I started using Relai. And you were one of the first and only ones who offered these two features at the beginning. The first one was a really easy way to set up a savings plan. just, I’m a lazy guy. know there may be even cheaper ways to say, I go to one of these professional exchanges and buy Bitcoin every month. I won’t do it, right? I’m too lazy. I will forget it. So for me, it was super important to just have someone who takes care of that. And I just set it up once and then it’s running. So that was like number one. And number two for me was that it’s really non-custodial so that I have the Bitcoins actually directly on my wallet. So that was the two reasons why I started using Relai. I know you have a bit more competition in that space today. And would you still say that this is kind of what… Julian (16:05.678) Hello? Julian (16:17.326) Mm-hmm. Alex (16:21.154) what makes you Relai or what makes Relai Relai that it’s savings plans capabilities, but also this non-custodial setup. Julian (16:29.772) Yeah, absolutely. There are a few more things as well. So what we did basically, we asked the product market fit question, the so-called Sean Ellis score. This is a very nice, just one question that you ask your active users and you get the result of whether you have hit product market fit or not. So if your product is good enough to scale yet or not. And this question is, how would you feel if you could no longer use Relai or the product tomorrow? And so if 40 % of the people say they would be very disappointed if they could no longer use Relai, then you hit product market fit. In our case, it was even more than 60%, which is cool. And only a few people said, well, I don’t care. And some said, I wouldn’t care at all if it’s back tomorrow. But so more than 60 % said yes, I’ll be very disappointed. So that’s a great first step. But then these people that are active Avid Relai users, as you also described, thank you for your trust. Then we ask them a further question of, what is it that makes you use Relai and not another company? And indeed the number one reason was self-custodial because this is really something that we don’t really have much competition. Most other competition are custodial. So they hold the Bitcoin on behalf of the customers and that comes with counterparty risk and all the other things. And you can really only use Bitcoin as it’s intended to be with all the benefits if you use it in a non-custodial way and that gets more more popular. So these people that want self-custodial actual Bitcoin and they want to control it, they like Relai because of that. it also, the second reason was that we’re Bitcoin only. So self-custodial Bitcoin only and the number three is that we’re Swiss made so this Julian (18:45.622) Swiss brand, Swiss regulation. And people also mentioned the just simplicity, user-friendliness. You can just automate, as you said, the savings plan. And then number five was low fees. Where actually there are ways you can buy Bitcoin much cheaper, but it’s probably what they mean is, okay, it’s so easy and you can just automate things. have one… fee for all of these things, you you don’t have to add a withdrawal or whatever, just with a few clicks, you get your Bitcoin automatically to your own wallet where you own the things and it’s just not complicated. And for that, you only pay 1 % or even a bit less than 1%. So these are the five reasons why people like Relai and why we are kind of the leading Bitcoin only. broker in Europe, even though of course there are a set of competitors that maybe focus on other stuff. if you’re looking for a Bitcoin only app, self-custodial Swiss made super easy and rather cheap, then that’s also what we are optimized for. Alex (20:02.742) Yeah. So, I mean, I understand that there is definitely like demand from the retail side and people that are just happy kind of storing Bitcoins themselves. Now you mentioned that you’re also like high net worth individuals and even businesses. Is it really the case that businesses, in particular businesses, I would assume, are they looking for non-custodial setups or are you also thinking about maybe building custodial solutions for these businesses going forward? Julian (20:32.076) Yeah, indeed. It’s super interesting. I don’t know what it is. I really don’t know whether it’s it. This is just the main need out there in the market that high net worth individuals and businesses really want the Bitcoin and control it themselves. Or maybe the reason is because we of course position ourselves now for five years. You know, what we say is we are Bitcoin only. Alex (20:54.03) Mm-hmm. Julian (20:57.134) There are no other coins on our platform. We are self custodial. So it’s not about, we don’t take custody and we’re Swiss made. These are the three things that we’re just hammering down. This is our message. This is our brand, right? So the people that we, the people in businesses that we attract, you know, they, they are probably maybe also kind of trained for it already by us or primed for that message. But indeed we don’t have a lot of businesses or high network individuals that ask for other coins, for example, or ask us to do custody. So it’s really these people that are on the same value line. They want Bitcoin and Bitcoin only, and they want to take self custody. And for them, we are the perfect partner. And I also think there are second order effects of that. We can just be much faster and simpler in onboarding for for both retail clients, private clients and business clients. We onboard a high network of individual that wants to invest one million within 24 hours. A business that wants to take half a million of Bitcoin on balance sheet, we onboard them in 48 hours. And that’s not, you cannot get this anywhere with, for example, know, Bitpanda or any other custodial multi coin exchange because they have such a different set of regulatory requirements and there the onboarding processes are like for a business that wants to invest half a million several weeks for a business that wants to invest 50k or 100k not even possible because it’s too small for them because it would be too much effort and work for them to even onboard this kind of SME business. And so we can lower this threshold and improve and increase the speed of the onboarding a lot because we are Bitcoin only and self-custodial. Alex (23:01.042) And do you think this speed and agility is going to change, of course, to the negative potentially if you now become regulated? I know you’re trying to achieve regulation under the markets and crypto assets regulation. assume it’s like one of these crypto asset service provider license since you’re trying to get. Do you feel like that this might be slowing you down going forward because they’re just more requirements and rules you have to follow? Julian (23:27.086) I actually don’t think so. from based on the visibility we have currently and we’re in the middle or I mean hopefully at the end of the process of getting the Mika license in France We already have a company there and we’re we have submitted all the files We’re in back and forth now with hopefully the last Communications we have with the regulators there and we should we expect in q1 or q2 this year the license. So we already know kind of all the processes, the monitoring systems that needs to be in place, the certifications and then of course the requirements that we will have. One of them is of course that all users need to be KYC’d. That’s something that we have now already implemented. So there are a few things of course that are a bit more cumbersome than before in Switzerland. But it’s not like a crazy amount of new regulation. It’s a lot, but not on the user side. For the user, and that’s exactly again, because we don’t deal with potential security coins, DeFi coins, other altcoins, meme coins, et cetera. We don’t deal with all that, right? We don’t have liquidity farming or… some sort of dividend like schemes and we don’t take custody on behalf of the customer. you’re just Bitcoin only, it makes it super easy also for the regulator. And so there are no crazy restrictions that others and requirements that others might have. There’s a lot on the business. So for us as business to get this license was, we still don’t have it, touch wood, hopefully we’ll get it soon, but The whole application process was very expensive, involved a lot of work from different outside lawyers and accountants and auditors and a lot of, just a lot of work. Internally as well, we hired a full team of regulatory risk management legal compliance people. And we have written, I think, more than 100 different policies. Alex (25:46.883) Yeah. Julian (25:47.022) implemented a lot of monitoring systems. We had to get certain certifications, ISO certifications, cybersecurity audits that we had to, you know, I could go on and on and on. was a lot of work, but for the user, not much will change other than, of course, they have to go through the KYC process, which since October, every user has to do anyway here also in Switzerland. Alex (26:11.874) Yeah, that, that, that makes sense. And I think you have to go, I mean, that’s good news, I guess, for all the users and, just on your point with that regulation and the license, you have to go through that wants to really understand what it means, right? It’s, it’s crazy. And of course I also do that as part of my job and it’s unbelievable. I mean, you’re handing like hundreds, not thousands of pages of paper. It takes months. Julian (26:26.627) Yeah. Alex (26:36.91) if you have bad luck, even years to get this license, a lot of back and forth with a regulator. So good to hear that it at least feels close for you. I mean, in particular, the French regulator has already handed out the first MECA licenses, right? They are known to be rather on the quick end for a tier one regulator. would say, was that a conscious decision to say we go to France instead of, I mean, I don’t want to name one of these smaller countries, but you… Julian (26:39.223) Yeah. Julian (26:53.891) Mm-hmm. Alex (27:04.216) There are satellite countries in Europe that have a bit, let’s say, more open and friendly regulators, but that have not the same reputation, of course, as the French or the German regulator. Julian (27:15.054) Absolutely, we see this as quite key for the long-term future of the company. We want to grow really big and be international and I think they’re the foundation of just having solid countries where you are regulated. So the goal would be to be regulated properly in Switzerland, in France and then in England, right, the UK. That I think is kind of a cornerstone for future growth. It makes it short-term a bit harder. It’s going to take longer. It’s going to be more costly than if you do it with one of these, as you call them, satellite jurisdictions. But in the end, it’s just a much better look also for future investors, for big clients, and just for partners like banking partners, payment service providers. exchanges, etc. It’s just a different look if you regulate it in France, basically the second biggest country or also most recognized country from a regulatory perspective in Europe, than if you, again, know, if you maybe are in one of these small countries. It’s just, it’s going to make things easier long term, even though it’s kind of harder short term. But I think it’s, this hard work is going to be worth it. And France specifically has made a lot of great development lately in becoming this startup hub, fintech hub, and also Bitcoin and crypto hub from regulatory perspective. So they, from the beginning said, we want to be early. We want to attract these companies. We want to make it fast and relatively easy, but also very compliant for them to get the license. so big companies like… Coinbase, Circle, Binance, they all made this decision for their kind of Europe expansion to get regulated there. And that was also then helping us make this decision. And in terms of Mika specifically, what a lot of people don’t know is that France basically drafted Julian (29:34.814) The AMF, so the regulator in France basically drafted the MECA regulation. It was not Germany or any other countries. It was really France. And so if you get the French MECA license, it’s basically like one to one the MECA license. Because you always need to get a local license first, right? If you get the license in, let’s say, Austria or Liechtenstein or whatever, then… Yes, you get this local license, then there’s usually a big gap between the local license and the MECA license. So then the second step to kind of transform this local license into MECA license is sometimes even more work than to get the license in the first place. For us, there will be pretty much no gap. Once we get this license, which is hard to get, then pretty much automatically or maybe within a few weeks, we will get the MECA license as well. And so it was from the beginning. conscious decision for us to go to France. Alex (30:36.494) You already mentioned this KYC discussion and of course you started as a small startup that I believe in the beginning you had no or a very light KYC approach, right? So I think it was possible to buy up to 1K or so of 1K Swiss francs or euro worth of Bitcoin each day, I believe, right? 100K per year. Julian (30:59.04) Mm-hmm. Mm-hmm. Alex (31:01.772) And then you, at one point you decided, okay, we now we decide consciously decide to go down this regulated route because it might close some doors, but it also opens a lot of doors. Right. And you’re a Bitcoiner, you know, the Bitcoin space. Well, a lot of Bitcoiners are very skeptical about anything like regulated KYC and everything. So I could imagine that that was a big fight for you maybe within yourself, but also with the community. So I just wanted, how, how, did it, how, how did that go? Julian (31:24.354) Yeah. Yeah. Alex (31:29.58) Did you have some really tough conversations? How did you get to that conclusion, that decision that that’s the right thing to do in the end? Julian (31:35.67) Yeah, so for us it comes down to principles again and I’m coming from the absolute like from the Bitcoin side and not from the ratify regulated site, whatever. I find it really cool to have this free money, you know, that is coming from libertarian and Austrian economics basics and crypto anarchist basics as well, where, you know, you want to be as free as possible and as sovereign as possible, et cetera, with the least amount of regulation possible, et cetera. I’m coming definitely from that perspective as well. But from a business perspective, look, the principle was always let’s try to be as light as possible on regulation. But let’s be a regulated company because in order to grow to a global company and have millions of customers and bringing tens of thousands, hundreds of thousands of bitcoins to people at scale, you need to be regulated. Like there’s no other way, because you’re a company, you’re not Bitcoin. Bitcoin can get away with this because it’s decentralized open source technology. But as a company, you just get shut down. So yes, let’s try to be as lean as possible and try to get away with as much as possible, but still be regulated. And that’s what we did. And basically, it was not really a business decision. was… that we start doing KYC, we were basically forced to. I mean, we knew that with Mika, there’s no way to do no KYC or light KYC. There’s just, know, if someone even buys one euro worth of Bitcoin with you, needs to go through the whole KYC process. And so we already knew beginning of last year that from now, basically 2025, when Mika is in place, we need to have a Julian (33:34.382) KYC process for all of our users from EU countries. And even though we don’t actively market in EU countries, because currently we are only licensed in Switzerland, so we only work on this reverse solicitation model. We’re not actively trying to acquire users in, for example, Germany or France or Italy or all these EU countries. But we passively are able to be… be open for them. Alex (34:03.928) So I can download the app, can buy Bitcoin, but you’re just thought I won’t see any commercial on the TV or any German website from you. Julian (34:12.622) Yeah, exactly. That’s exactly how it is. And so in order to, so we had to go into that MECA license thing and get regulated. And so we knew that when MECA is coming, we need this KOC process for all users out of EU countries. And this is actually organically currently like 80 % of our users. Only 20 % of our users, even though we were actively marketing in Switzerland and not outside, only 20 % of our users, because Switzerland is small, right? And we speak the same language as Germany and Austria. So actually most of the users come from there, but also French and Italian are also Swiss languages. So we have these websites and the app also supports these languages. So a lot of users are coming already from Alex (35:03.054) True, yeah. Julian (35:10.862) these countries. Alex (35:13.902) So how many users do you have in total? Julian (35:16.526) In total now it’s around 140,000 active users. Alex (35:20.162) Wow. And you said 20 % in Switzerland and then what’s second is Germany, France, Italy. What other mean? Julian (35:25.006) Yeah, it’s Germany, Italy, then Switzerland, and then think Austria, France, and probably Spain. And then there’s the long tail of the other countries. But then the thinking was, we need KYC for 80 % of the users anyway, right? Then once we also have the MECA license, we can actually start doing active marketing. Well, this number will go up to 90, 90. Alex (35:39.234) Yeah, yeah, sure. Julian (35:54.318) 5, maybe 99 percent. So all of a sudden Switzerland will not be like a very, very big market for us anymore. And if the regulation is different, mean, would it make sense to really fight for this, you know, one to 10 percent in the future Swiss, that the people that they can do the non-KYC when actually 90 percent of the users plus anyway need to do the KOC. So that was then the decision along with the anticipation we already knew from FINMA and from VQF, our regulators, that it will also come in Switzerland. They’ll get this full KOC thing sooner or later it will also come in Switzerland. that was then the decision, okay, we can stop fighting. doesn’t make sense anymore to invest a lot of resources in trying to still protect this no KOC thing for Alex (36:23.662) Hmm. Julian (36:50.018) Swiss users, which are the minority. And I think now it’s even faster than we thought. So I think even this year, it will be enforced also by Swiss regulators. Alex (37:02.574) Okay. And of course all the existing users had to go through this KYC. Then do you have a number on how many of the existing users did that and how many have not done that yet? And potentially, of course, you could lose some of these clients as well. Julian (37:16.92) Definitely, definitely messy, messy process. Not everyone will do it. But we’re now like 50-50. So I think we’re at pretty much 72,000 registered users now. And the others are either not active anymore because maybe they started using Relai four years ago and they stopped two years ago. So they are maybe not even active anymore at all. Alex (37:19.022) Julian (37:45.71) And then there’s definitely this category of people that just don’t want to register and they now try to find other ways to buy Bitcoin in a more anonymous way or whatever without getting registered. So I believe we still make every day like conversions from old active users that are still no KYC but then now decide to keep using the app and do the registration. it’s maybe 80-20. So 80 % are actually new users that just download the app, quickly do the KVC and start using us. And so, yeah, maybe this number will, the number of registered users will definitely grow and eventually outgrow the active users now. Alex (38:35.788) Yeah. Yeah. No, no, that makes sense. And, So I had a question in mind, I forgot now. Oh yeah, I wanted to ask, what’s the growth of users you have currently every year? mean, let’s say you’re now 72 that have really registered on your platform, have gone through that KYC. How quickly is that number increasing each year? Julian (39:02.36) So the registered users, we haven’t really measured before, right? But I can talk about like total active users, monthly active users. these basically, along with other important metrics for us like trading volume, revenue, asset active users, app downloads, all these metrics are basically anywhere between two and three X. I think the… Alex (39:30.082) wow. Yeah. wow. Julian (39:30.862) per year, the last four years actually, pretty consistently. the active users are the hardest, monthly active users are the hardest to grow, but they grow at like 2X and then we have managed to grow volume and revenue even more aggressively, more like 3X every year. Alex (39:52.462) Yeah. So the fees, believe like 1 % or what’s the fee currently to buy Bitcoin at Relai? Julian (39:59.438) Yeah, we initiated a new pricing policy, so new fee and also referral commission system. It was basically now a 1 % fee. And if you have a referral code, it’s 10 % discount. So you’re at 0.9 % fee. Alex (40:15.32) Yeah. And we have one, of course, I didn’t mention that, but I should plug it maybe now it’s it’s a rock, right? R O C K. And it’s actually a nice, it was a nice thing for you to change that because I believe now in the beginning, I think it was that you only profited for a couple of months, right? When you people applied through your referral call, but now it’s like a continuous thing, right? Julian (40:19.843) Ha Julian (40:37.431) Yeah, so the whole story here again is and that’s again like community, Bitcoiners, some like it, some not, et cetera. At the beginning, we were also a bit naive, right? We wanted to give a lot back to the users that referred us and to the Bitcoiners that referred us. So the first version of the referral program was you get half a percent of whatever the people that you bring invest forever. So if you bring someone that invests 1K into Bitcoin, you get five euro. And if he does that every month, you get that every month forever. So that was basically half of the revenue we make. just share. We just share with people. So at the beginning, when we had a few hundred users, that was fine. We didn’t make any revenue anyway. We didn’t think about profitability or whatever. But then fast forward a few years, we had like Alex (41:18.926) of your margin, right? I can imagine. Julian (41:34.834) we hit 100,000 users and like maybe 20,000 monthly active users and monthly maybe, I don’t know, 20 million or something volume. And then all of a sudden we started spending like six digits a month just on these referral commissions. So we then had the CFO that looked at all this. and said, this doesn’t scale guys. We will never make money if we continue like that. And so we’re a business. We need to eventually make money. So I had this discussion, what can we do, et cetera. And we grew pretty fast. So we needed to do something quickly. Otherwise, we were just bleeding more and more cash. And so we decided to cap this at three months. the program stayed the same. You still get half a percent of whatever your Alex (42:01.132) He wasn’t happy. The CFO wasn’t happy. Julian (42:27.498) the, person you bring invests, but only for three months and then it stops. so we thought that’s, that’s great. It was great for us for, for the business. So finally we, we could kind of, control this cash outflow and make some money. But, then the community didn’t like that. All the influencers, the affiliates, the ambassadors, the active users that brought a lot of clients and every month they, they earned something from it. They of course hated that, right? And so there was a big shit storm also. A lot of people stopped using the app and yeah, was, this was tough. It was actually in the end, just a wrong decision because we didn’t think it through. We didn’t think about what will this do with these people, right? What will their reaction be? But yeah, for last year is with, this was the, what would you describe? This was the program. Now we changed it again. And now I think we really thought it through and we found a great model where The fee is 1%. If you use a referral code, you get 10 % discount. And for the one that brings the person gets 10 % also from the fees. So basically now you don’t get 0.5 % on everything that the person you bring invests, but 0.1%. So you get less, but you get it forever again. Because we talked to a lot of these affiliates, influencers and referral people. We asked them and actually, 80 % of them said, I don’t care if I get less, I just want it forever. Like what they didn’t like is that it stops after three months. And so that was the crucial insight that we now implemented. And now everyone seems to be very happy. Alex (44:00.343) Yeah. Alex (44:04.142) Yeah, yeah. Alex (44:10.606) I mean, it’s good to see that you listen to your clients. And I have to say, I also prefer the new model. I understand, of course, that everyone prefers the original one, but that was not sustainable. So I wanted to get back to you. You also mentioned revenues and stuff. I just want to get a rough idea and also how many Bitcoins you actually sell every month. So I’m not sure if you have these numbers like per month or per year, how many Bitcoins are being bought via a Relai? Julian (44:20.558) Yeah. Julian (44:38.542) I think we posted about it around Christmas or a bit before Christmas last year and then it was I think around 12.5K so probably at the end of the year it was maybe like 13K Bitcoin so it’s more than 1000 Bitcoin every month for sure but I would have to go back and look into it but I think that’s what I remember so more than 1000 Bitcoin Alex (45:03.842) Yeah. But that shows already that we are talking about quite big numbers here, right? So if we say like 13,000, let’s make it very simple. A hundred K. It was of course less on average last year, but then we are so 13,000 times a hundred K and let’s immediately take the 1 % because that’s what sticks with you, right? There should be like 13 million in the end, revenues. Of course, I would assume that numbers fees, change a bit between business, private and the retail business. Yeah. So is my 13 million guess, is it probably a bit too high or is it roughly… Julian (45:37.228) Yeah, and depending on the volume as well. Yeah, exactly. Julian (45:46.958) Yeah, I think it assumes that Bitcoin was 100K the whole year. So the average price is probably more like 50, 60K. Yeah. I think that could be around right now. Alex (45:50.368) Exactly. That’s why it was a bit too high probably. Yeah. So we are with six, seven million then. Okay. Nice. Nice. I mean, and you also, you did a funding round in December, I believe, right? For 12 million. So also wanted to spend a couple of minutes on that because I assume the VCs were of course looking at your numbers already. I think this round was led by Ego Death Capital, which is a quite well-known VC in the crypto space. I think they have like a couple of OGs in there like Chef Booth, Lynn Alden. So how was it? guess you interacted a lot with these people. What was the experience like? I I also did that a couple of years ago. I was thrown into that &A business that did a couple of deals and without kind of a lot of experience before, it’s an interesting, it’s a whole different world, right? And I guess it was similar for you. guess you don’t have an &A background and now as a CEO having to sit there at a table, like negotiating with experienced VCs. How was that? Julian (46:41.464) Yeah. Julian (46:52.418) Yeah, fortunately it was not my first rodeo. We raised now in total, we raised around 20 million. So we raised around eight, nine million before already in three rounds, but every round is different. And this one of course was the biggest one. So it was also the whole due diligence was, was yeah, really, really crazy. We talked about the effort that it is before of getting a license. It’s kind of similar to, getting a funding round done. There’s a lot of due diligence from. different investors that are interested. There’s a lot of documentation you have to produce, of course, like a pitch deck, financial model, budgeting, all the numbers, all the contracts, all the policies, everything. You have this whole data room where we had like hundreds of documents that investors that were interested could deep dive and then they ask questions. You have calls with them, you have negotiations. As you said, some are interested, but then they drop out and then… You know, it’s lot of work, but I’m really grateful that the result was good. was half a year of brutal hard working for myself and a few other team members, especially the CFO as well. But we got it done in like half a year, which is not self-evident for around more than 10 million. Usually it takes longer. It takes like one year. Yeah, super happy also to have these amazing investors on board, As you said, Egotheft Capital that took the lead. The guys around Jeff Booth, Lin Alden, Preston Pish, and of course Andy Pitt and Nicola Juga, who’s been maybe a bit less well known, but also like great Bitcoin-ish great people. And then we had the Plan B fund, you know, the whole… Lugano conference and program plan B. have now a VC fund. So the Swiss Bitcoin angle we have in there as well. We had Solid Group, who’s a gold broker company that have invested, I think, two and a half million in the round as well. So it’s interesting to have this kind of… Julian (49:05.37) gold versus digital, physical gold versus digital gold partnership here as well in this round. And then Time Chain participated again, which they were already in the cap table before. They’re also a Bitcoin-only VC fund based in London and New York. And so we have this set of global Bitcoin-oriented VCs in the mix now. And yeah, super happy about Alex (49:32.876) Yeah, I mean, very cool. Now you have all this money. Have you communicated the valuation at which you raised that money? Julian (49:41.102) I think so. It’s 72 million post-money valuation. Alex (49:45.142) Okay. Very nice. So you have at least 12, 12 million additional cash on your bank account now. So maybe as a last question, like what are the plans for 2025 and beyond? mean, I can imagine the license has cost some money, but also any new products, features, or do you say we want to go all in on the business or on the private side next year? What are the plans for 2025? Julian (50:03.277) Okay. Julian (50:06.764) Yeah, so initially the plan was just to put all into Bitcoin, But that hasn’t been accepted by the board. No kidding. We did invest a little bit in Bitcoin and we are also pursuing a Bitcoin treasury strategy for the business, which is very nice to see that we’re actually now starting to every month we pile up the amount of Bitcoin we hold on the business as well. Alex (50:10.374) Hahaha Julian (50:33.102) But overall, course, the main goal is to grow further, to become profitable this year. And this EU expansion is super critical for that so that we can grow further, do another two or three acts in terms of volume and revenue and users this year. And in a profitable way, we’re going to grow sustainably, profitably. And where the money really will go, is mostly into the product. So the mobile app, there will be several new features like the savings buckets, for example, so that you can also have an auto savings plan for your kids. For example, this is what customers really are asking for. And then improving just the wallet, the Lightning Wallet feature, for example, to introduce Face ID. So it’s harder for people to lose their precious. Bitcoin to connect hardware wallets smoothly. So you can within a few clicks connect one or several hardware wallets to your app and then basically navigate all your Bitcoin from one mobile app. And then as you said, we will invest a lot in the Relai private and business part. We have just launched to a few, to do a small set of high network individual clients, this web app. and we will kind of roll it out also to business clients and high network individual clients, eventually maybe even to retail clients if they want to use the web app as well. So a lot will go into product. We are a product-led company. want to build more exciting features for the people so that we can attract more people and they stay with us. that’s the goal, right? To excite people with this super easy product to make Bitcoin more accessible. Number two then is of course growth, marketing, sales. Once we have this MECA license, there is a lot of potential for different platforms, collaborations with maybe sports teams, conferences, influencers. We will invest a lot in… Alex (52:43.79) So that’s the Bitpanda strategy. You’re also going to grab some big football clubs. Julian (52:48.962) Well, they are playing Champions League when it comes to that. We will play maybe second or third league, but yeah, we will try to do stuff like that. But no, mainly it’s also going to podcasts, you know, sponsoring stuff like that. And a lot of just growth marketing, paid advertising on different platforms like Meta, know, Facebook, Instagram, Google. Alex (52:51.544) Yeah. Julian (53:15.658) YouTube, there’s a lot you can do with just paid advertising, which we so far cannot do in EU countries. And then Apple App Store or also Google Play Store, ads, and there’s a lot of ads. We have a great marketing team that will be happy to spend a few millions on these growth tactics, and they actually work. And then last but not least, the third bucket that will grab a lot of this money is Again, regulatory licensing, legal compliance will go on, right? Because it doesn’t stop when you have the license. It’s very expensive to get the license. It’s also expensive to maintain and hold the license, both in Switzerland and in the EU. And then we want to spend some money and effort also to expand further and get licensed in the UK and then maybe in the Middle East and then eventually the whole world. Alex (54:14.712) Julian, I have many, many more questions here on my list. you definitely have to come back and maybe it’s even interesting like in a year or so after you’ve then went through the first stages of your European expansion to listen in again, how it’s going with you. also would have comments and questions on a potential B2P strategy, like this whole topic of UTXO management is of course an interesting thing we could talk about. But I suggest that we leave it here for now. So thanks a lot for being our guest today and for being so open about Relai, but also about yourself personally. And yeah, dear listeners, if you liked this episode, please make sure to subscribe and share it with a friend now, especially of course, your English speaking friends or at least those who can understand English in any European country. It might be interesting because Relai is coming. Thanks a lot for listening. Thanks Julian again. And then until next time. Bye bye. Julian (55:08.728) Thank you Alex, bye guys.