CoinGecko remains profitable in crypto winter, believes the worst is over

The crypto market has had a rough ride since last year, especially with the failures of major crypto projects like FTX, TerraUSD, Three Arrows Capital, Celsius, and Voyager.

We’ve also seen prominent crypto startups like Nansen, Coinhako, and many others slide into the red.

One company that’s bucking the trend is bootstrapped crypto firm CoinGecko. The Malaysia-based company has stayed profitable throughout the current bear market, Bobby Ong, the firm’s co-founder, tells Tech in Asia in an interview.

Photo credit: CoinGecko

One can say that CoinGecko was born in and molded by a crypto winter. Founded in 2014 by Ong and TM Lee, CoinGecko launched a few months after Mt. Gox, the biggest cryptocurrency at the time, went bankrupt. Before it shuttered, Mt. Gox had been hacked, which led to the loss of nearly 850,000 bitcoins.

CoinGecko, which allows users to track the price movements of cryptocurrencies, non-fungible tokens, and indices, has a strategy to weather bear markets. Its approach: to assume a 50% to 70% revenue dip during such cycles.

While the company didn’t disclose exact financial figures, it said that its revenue in 2022 was an eight-figure amount and that it aims to hit an annual revenue of US$100 million by 2026.

Some of CoinGecko’s major revenue sources are advertising and affiliate partnerships, which makes up about 70% of the total. For instance, the company has helped onboard new users onto blockchain Tezos through its recent Learn & Earn campaign.

The rest of its proceeds come from its API business, which provides crypto data to the likes of MetaMask, Crypto.com, and Etherscan, among others. The company aims to increase its recurring revenue from this business to hit 50% of its total takings by 2026.

Ong, who also serves as CoinGecko’s COO, spoke to Tech in Asia about the firm’s position in the crypto market against competitors like CoinMarketCap as well as the lessons he learned as a founder.

How has the company managed to remain in the black all these years?

Ong: We briefly considered fundraising, but many investors were skeptical and did not understand the potential for blockchain technology, so we decided to bootstrap, keep our costs low, and aim for ramen profitability.

Bootstrapping has its perks, as it means we have to be very careful when it comes to expenses and have to be creative with our go-to-market strategy. By keeping costs low, we managed to survive multiple bear cycles and thrive during the bull years as the crypto market expanded.

We have reinvested profits back into the business and have not raised any funds.