Mogo launches venture arm following mixed Q4 with record revenue, large net loss

Mogo attributes most of loss to drop in value of Coinsquare warrants.

Vancouver-based Mogo has released its fourth-quarter and full-year 2021 earnings results.

The BC FinTech firm generated record revenue of $17 million CAD in Q4 of last year, a 70 percent rise year-over-year (YoY) that was fuelled by strong subscription and services revenue growth. Q4 marked Mogo’s third consecutive quarter of accelerating growth, and capped off a strong 2021 for the company, which saw its total revenue increase 30 percent YoY to $57.5 million on the year.

Mogo has launched Mogo Ventures to manage its growing investment portfolio, which includes Coinsquare, Tetra Trust, Enthusiast Gaming, Hootsuite, and Alida.

However, Mogo’s revenue jump was also accompanied by a net loss of $29.6 million in the fourth quarter, a sharp increase compared to the $2.8 million it lost during the same period in 2020. Mogo said this loss, which accounted for nearly all of its $33.2 million net loss last year, was “primarily attributable” to the $22 million non-cash loss Mogo experienced following a revaluation of the firm’s derivative purchase warrants in Coinsquare, which it said was in turn “driven by recent broader market declines in crypto valuations.”

Following these mixed results, Mogo announced the launch of Mogo Ventures to manage the company’s existing investments in strategic partners and companies in the crypto, Web3, gaming, and software sectors. The FinTech firm has also disclosed a stock buyback plan.

“While our primary focus is to invest in our platform and new products, the market volatility may continue to present attractive buying conditions periodically,” said Mogo co-founder and President Greg Feller, referencing its buyback plan. “Our strong balance sheet puts us in a position to take advantage of those situations on behalf of our shareholders.”

Mogo’s share repurchase program authorizes the company to purchase up to $10 million USD worth of its own common shares.

RELATED: Following Moka acquisition, Mogo launches stock trading app

Founded in 2003, Mogo is a Toronto Stock Exchange and Nasdaq-listed digital payments and FinTech app that trades under the symbol ‘MOGO.’ The company’s platform allows users to buy and sell stocks and Bitcoin, secure credit score monitoring and ID fraud protection, and access personal loans.

Mogo has amassed a $124 million investment portfolio that includes stakes in Coinsquare, Tetra Trust, Enthusiast Gaming, Hootsuite, Alida, and digital assets Bitcoin and Ether. Mogo Ventures will focus on “monetizing” these investments.

The company’s investment portfolio excludes warrants it holds in Coinsquare. As of December 31, Mogo’s portfolio consists of a $103.8 million investment in Coinsquare, $1.7 million in Bitcoin and Ether, and $18.1 million worth of equity stakes in other companies.

RELATED: Mogo increases Coinsquare ownership stake for second time, gains ability to buy majority

Mogo Ventures will be led by Greg Feller and a newly formed investment committee chaired by Michael Wekerle—former co-founder and partner of Griffiths McBurney & Partners’ sales and trading operations and vice chairman of institutional trading at GMP Securities. The committee also includes previous Moka Executive Chairman Liam Cheung, and Mogo execs Phil Barrar and Alice Davidson.

Mogo co-founder and CEO David Feller characterized 2021 as “an outstanding year for Mogo,” adding that it “showcases the strength and diversification” of the company’s current business.

In Q4, Mogo began rolling out its stock trading solution, which it hopes to make widely available during the second quarter of 2022. Feller describes the platform as “the centerpiece of [Mogo’s] digital wealth strategy.”

Feature image courtesy Mogo.

Josh Scott

Josh Scott

Josh Scott is a BetaKit reporter focused on telling in-depth Canadian tech stories and breaking news. His coverage is more complete than his moustache.

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