Sep 12, 2022 - Economy

Ledger aims to fine-tune pitch for untouchable crypto wallets

Photo Illustration of Ledger CEO Pascal Gauthier

Photo illustration: Natalie Peeples/Axios. Photo: Courtesy of Ledger

High profile hacks and funds being locked up on struggling platforms are nightmare headlines for the crypto industry as it seeks to win new believers, but for some hardware companies like Ledger, they are prime marketing material.

Why it matters: Most blockchain veterans believe that cold storage — holding your crypto offline and off the internet — is the safest way to store digital assets. Self custody, holding those digital assets outright, also shields owners from the fickle policies of [name your exchange].

  • But convincing users to take good care of their crypto keys, essential if you ever want to access your wallet again, requires finesse — and that means marketing with the locals in mind.

State of play: Hardware walletswhether you know what they are, chances are you've seen them and heard about them.

  • You might have seen one on Showtime's Billions, or for sale at Best Buy. You've probably heard a reference to it indirectly in the phrase "not your keys" — a maxim that becomes more insistent when crypto-jackings tick up.

Details: The appeal of Ledger's USB stick-like crypto wallets is in their utility, enabling cold storage and self custody of assets.

  • The Paris-based company's marketing script has become more relevant than ever, Pascal Gauthier, CEO of Paris-based Ledger, tells Axios. "When what we warn against happens, it looks like we’re smart."

By the numbers: Since Ledger's start in 2014, it has sold more than 5 million devices and started the second half of the year with 50% growth in revenue year over year, according to Gauthier, who says the numbers would be even higher if it were not for the decline in coin prices.

  • He pointed to several events, highlighting Celsius Network's halting customer withdrawals and eventual bankruptcy that drove sales.
  • Of note: Ledger isn't the only maker of hardware wallets, with other brands include Trezor, KeepKey and Coldcard. But it is usually considered the leading wallet provider in crypto and Best Buy's choice to stock its hardware first likely reflects that position.

Between the lines: In spite of that one marketing message, Ledger is looking to cater to customers residing in non-English speaking countries. And each country's unique relationship with crypto means local marketing approaches may vary.

  • "High inflation and distrust of government in Argentina, means the people there are looking at crypto differently, so marketing should be vastly different there than in France or Lebanon, for example," Gauthier says.
  • For countries like Argentina and others in similar macro environments, crypto is considered a safe-haven asset, he says.
  • In France and most English-speaking countries, by contrast, crypto is treated as an investment like stocks or bonds.

"In the future, we will build specificities to your country, " he adds, saying that certain coins have greater recognition in Korea, for example.

  • The company is literally working on translating its website and building out native-speaking support teams for would-be customers in Asia, an under-penetrated market, according to the CEO. "Ledger will speak every language of the world."

What's next: Ledger partnered with The Sandbox to launch a minecraft-style game called "School of Block" that teaches players how to become a master of crypto security through various challenges.

  • It also recently rolled out its own nonfungible token marketplace touting it as "the most secure platform" for NFT drops.

Context: Ambitious growth plans may be harder to execute amid crypto winter, but even with the threat of tightening capital markets Ledger was reportedly in talks to raise $100 million in a funding round that would drive its valuation higher than the $1.5 billion it fetched in a June 2021.

Flashback: Ledger hasn't been without setbacks, in 2020, the company fell victim to a hack due to website vulnerability during which a third-party had access to customer information, such as emails.

  • The security of customer assets on its hardware was not compromised.

It is also keenly aware of companies that might steal market share.

  • "Our big problem is [competitive] security. For us the threat comes from everywhere, from startups like us but bigger, listed companies in the financial world that are thinking about hardware," Gauthier says, listing Apple, Samsung and to a lesser extent Square, as competitors.
  • Gauthier says he's never personally been robbed or hacked because he is "very cautious."

The bottom line: The company's long-term strategy is mass market, but it's not quite there yet. "We've always said we're going from business-to-geeks to business-to-consumers, but crypto has to hit mass adoption first," Gauthier says. "Then, maybe Ledger will be at the convenience store."

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