Mode Global Holdings partners with e-commerce giant
17th June 2021 |
One of the fastest growing, most exciting, and yet controversial areas in global finance right now is the convergence of “old money”, the traditional banking system most of us are used to, and “new money”, the new burgeoning area of cryptocurrencies and digital assets.
Much of the controversy rests with the lack of understanding and lack of willingness to understand what this new system can offer and the power shift it represents.
But much of the excitement rests with the fact that individuals like you and I can use this new money system to our advantage, circumventing traditional financial institutions and their restrictions and controls.
The term you’ll often hear bandied about is the explosion of decentralised finance (DeFi). It’s a term used as we begin to see experimentation and development in crypto for aspects of global finance with no centralised authority.
These projects, platforms and protocols are decentralised for anyone to take part in, open source and often shaped by their communities, people just like you, not a stuffy board of directors sat in their ivory tower counting their stock options and cushy golden handshake exit strategies.
Ok, that’s a bit of a generalisation, but you get our point here I hope.
The truth is that DeFi has been with us since the creation of bitcoin back in 2008 and its release in 2009.
Bitcoin is actually DeFi.
Sure, it’s not as complex as yield farming strategies on complex sidechains linked to cryptocurrencies. But it is a form of a project that ticks all the boxes of DeFi – open source, decentralised, no barriers to entry, allowing global financial trade and commerce to take place.
Bitcoin is the “OG” (original gangster) DeFi experiment.
While crypto like bitcoin, digital assets and DeFi are showing huge opportunity and promise, the traditional “old money” system isn’t complete dead either. It has a few tricks up its sleeve when it comes to innovation and development.
We’re seeing an aspect of that play out with open banking.
Open banking is a financial system where third parties have access to financial data from banks through application programing interfaces (APIs).
Those third parties can then use that data to develop and distribute products and services of their own.
This is what provides huge opportunities to fintechs – financial companies that have the capacity to innovate and develop modern financial products and services the banks have neglected for too long and underserved their customer base.
Right now there’s a considerable amount of “us vs. them” between the old money companies (incumbent banks, legacy financial institutions, central banks and the gatekeepers of the current system) and new money companies in crypto and digital assets.
However, there’s also a handful of smart companies that see the opportunity that exists at the point of convergence between the two.
Companies who can take the best from both systems to build new financial tools that benefit everyone whilst helping them to understand and learn about the potential of new money.
Our most recent recommendation, Mode Global Holdings (LSE:MODE), is at the point of convergence between old money and new.
It’s a fintech that is taking exciting innovations from the old money system (such as open banking) and combining them with the crypto and digital asset new money system to develop what we see as one of the most exciting companies in the UK.
What makes Mode exciting and different is that it can handle both traditional fiat currencies and cryptocurrencies, with plans to expand to all kinds of digital assets.
Mode’s platform makes it cheap and easy for its customers to shift between the two. It also makes it easy for people new to crypto to take their first steps into this new money system.
The platform also has innovative features – such as the possibility of earning interest on bitcoin holdings.
Mode’s deal
We recommended Mode on 10 June 2021.
It is the most recent addition to the Frontier Tech Investor portfolio.
Just four days later, Mode announced what could be a transformative new partnership.
On 14 June 2021, Mode announced that it has signed a memorandum of understanding (MOU) with The Hut Group (THG).
THG is an e-commerce company which gives brands direct access to customers in 169 different countries.
THG is substantial by other measures too: its current stock market valuation is in excess of £6 billion.
In this latest deal, more than 30 of THG’s partner brands will offer Mode as an additional means of payment for their customers.
These brands includes popular sports nutrition and clothing retailer Myprotein, for instance.
Mode is hopeful this will be implemented by the end of Q3 2021.
In addition, the partnership will allow Mode to provide THG’s customers with new benefits that the customers do not currently enjoy.
For instance, customers will be able to earn rewards in bitcoin for eligible purchases.
Further, Mode will be able to take advantage of open banking to offer customers benefits that are tailored to the customers’ particular needs and preferences.
Ryan Moore, CEO of Mode, stated the following about the deal:
“Partnering with THG marks a major milestone for Mode. THG has become a globally renowned tech ecosystem specialising in taking brands direct to consumers worldwide. Today’s announcement signifies the beginning of a long-lasting partnership that will see Mode’s growth and market penetration trajectory accelerate…”
Mode’s involvement with both fiat currencies and cryptocurrencies sets it apart from other fintechs and from “old money” financial institutions.
Now, thanks to the partnership with THG, Mode has exposure to millions of customers around the world.
Also, we expect this deal will raise awareness of Mode amongst potential new customers that might not yet have experienced the company and its app.
When customers go to the checkout and pay for their goods, Mode’s payment option will be there for all to see.
As a result, we anticipate that the demand for Mode’s services will rise.
This, in turn, could generate increased revenues for Mode, as it facilitates more payments and collects the transaction fees that comes with them. And of course it opens up potential new customers to crypto purchases and investment, areas they might not have previously been confident enough to step into.
Relative to when we added Mode to the portfolio on 10 June, the company’s growth potential has already become a lot greater.
We reiterate our BUY recommendation on the stock. You can find the original recommendation here.
Buy list update
AMTE Power (LSE: AMTE)
AMTE Power is a manufacturer of lithium-ion battery cells.
On 8 June 2021, the company announced that it will be one of the first commercial customers to use the publicly funded UK Battery Industrialisation Centre (UKBIC), under a new agreement.
In the deal, AMTE will be scaling up its battery production, and moving manufacturing from its current facility in Thurso, Scotland, to the larger UKBIC location in Coventry, England. Initially, the focus will be on developing AMTE’s flagship Ultra High-Power cell, which is tailored to the automotive market.
CEO Kevin Brundish stated the following:
[Speaking about the new facility] “It will no doubt be critical in helping us to underpin our scale-up plans for manufacturing to enable us to serve the significant potential demand we see for our products in the automotive, oil & gas, and energy storage markets.”
To us, this change in facility highlights AMTE’s desire to capture the demand in the UK automotive industry, which is heading towards electrification. The UK government has confirmed that the sale of new petrol or diesel cars will be banned from 2030.
We believe that AMTE has the potential to achieve this aim: the company is also expected to confirm its plans for the development of a gigafactory – a completely new plant that can produce batteries on a large scale – in 2022.
We are expecting revenues to increase in line with this scaling-up in operations. This should bolster the valuation and share price of AMTE.
We reiterate our BUY recommendation on the stock. You can find the original recommendation here.
Surface Transforms (LSE: SCE)
Surface Transforms is the UK’s only manufacturer of carbon-ceramic brake discs for automotive use.
The brakes are designed for high performance sports cars. They provide unrivalled benefits, which according to the company, includes weight savings of up to 70% and the absence of corrosion.
On 3 June 2021, the company announced the launch of a new ceramic brake-disc kit for the Lamborghini Huracan car model.
The kit uses specialist carbon ceramic material to create lightweight, high-performance brake discs. The discs are also compatible with some of Audi’s flagship sports car models, including the Audi R8 supercar.
The brakes possess heat conductivity which is three times that of its competitors. This reduces the temperature of the brakes, and gives them increased durability. According to a report by Accurate Auto, too much heat can cause car brakes to overheat and malfunction.
We think that the deal will help to further establish Surface Transforms’ brake discs within the sports car industry. We believe that the highly favourable benefits that the brakes provide will continue to attract customers in this space.
We reiterate our BUY recommendation on the stock. You can find the original recommendation here.
The Frontier Tech Investor “Top Three”
Sometimes it’s hard to decide on which stocks to invest in from our buy list.
Below is our Frontier Tech Investor “Top Three” section showing three stocks in open BUY positions. If you’re trying to figure out what to invest in next, these are three that we think are a great place to start.
This doesn’t mean our other stocks are no good: this is just a tool to help you spot the next Frontier Tech Investor stock that could be worthy of your consideration.
Kanabo Group (LSE:KNB) – one of the world’s most controversial investment ideas is based on the legalisation of medicinal and recreational cannabis. It’s sweeping across Canada and now the United States. Both countries are leaders on the way to legalisation. In Australia a similar path is being followed. And now the UK is on the same track. Kanabo is one of the newest and best plays in this huge investment opportunity. You can find our recommendation here.
Mode Global Holdings (LSE: MODE)– our most recent recommendation, Mode, looks to revolutionise the way in which payments are being conducted. Its platform provides a seamless way to manage, and spend assets from both monetary systems; the old, fiat currency system, and the new, crypto and digital assets system. The platform has unique features, such as the potential for you to earn interest on your bitcoin holdings. We see the popularity of Mode rising in line with the wider adoption of cryptocurrencies as a means of payment. Most recent developments at Mode are discussed in detail above. You can find the original recommendation here.
Velocys (LSE: VLS) – there’s no doubt that governments will continue to push their “green agenda”. This means that they will do what they can to support industry in ways that will help enable carbon neutral economies. Velocys is a big part of this – developing sustainable fuels for transport and logistics (in particular aviation) with pioneering technology. If you’re looking for a great “green energy” play, Velocys is a very good place to start. You can find the original recommendation here.
Sam Volkering
Editor, Frontier Tech Investor
Elliott Playle
Junior Analyst, Frontier Tech Investor
PS You may also find that when you email us now at Frontier Tech Investor you get a new automated response from our customer services team.
Due to the high level of questions we get, we’ve put in place new systems to ensure that minor items, like accessing reports, or navigating your user login, go to our customer services team to help you out with.
Things that only I can answer will go through our customer services team and passed on to me – that way it ensures my time is better spent answering the key questions about the recommendations, the trends we’re focusing on and everything else we’ve got going on.
Really though, you won’t notice any difference in how you contact me, and I’ll still answer the key questions you have.
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