Diamond Equity Research, a leading equity research firm with a focus on small capitalization public companies has released update note on Defi Technologies Inc. (NEO: DEFI.NE) (OTCMKTS: DEFTF) (FRA: RMJ). The update note includes information on the DeFi Technologies’ financial results, management commentary, recent developments, outlook, risks, and our revised valuation estimates.

The update note is available here. Highlights from the note include:

• Strong topline growth aided by industry tailwinds and strong execution - DeFi Technologies reported robust financial performance aided by industry tailwinds and skillful execution by the management. The company reported revenue of $15.1 million, of which staking, and lending revenue amounted to $3.34 million. The company achieved this feat even when most of its revenue-generating products (management fees and high staking APY ETPs) managed to gain reception in the latter part of the year. While the topline figures were above our estimates, higher operating expenses as a result of share-based compensation are likely to limit the cash burn. In the recent conference call management described the cost-cutting measures, reducing the operating expenses as the company scales its business.
• Recovering crypto markets and expected new launches to support AUM growth - Valour, in its latest filings, reported an AUM of $274 million as of March 29, 2022. Given the recovering crypto markets, expected new launches (MATIC ETP, Metaverse, and Gaming ETP, Top 5 DeFi ETP, and Top Digital Assets ETP), and the meaningful partnership with SEBA Bank AG, we have updated our AUM estimates and model the company to achieve the $1 billion AUM milestone by the end of 2023 and $5 billion AUM by early 2028. In addition to developing partnerships with various emerging DeFi players and listing of ETPs on multiple exchanges, the management recently announced the creation of a Special Purpose Vehicle (SPV) to support the distribution of digital asset-backed product programs to institutional investors. The SPV will enable Valour to distribute digital asset-backed products to institutional clients, additional exchanges, and offer a broader range of products directly supporting AUM growth. DeFi Technologies also participated in the $45 million Series A raise for Boba Network, a Decentralized Autonomous Organization (DAO) and next-generation Ethereum Layer-2 Optimistic Rollup scaling solution. The round will enable the protocol to invest in Boba ecosystem projects and tap into the combined expertise of some of the biggest names in Web3 space.
• Valuation - We have updated our valuation estimates, incorporating the recent financials, updating the comparable company analysis and our revised estimates for operating expenses and AUM. Our valuation approach yielded a per-share value of C$4.15 per share or C$880.96 million, contingent on successful execution by the company.

About Defi Technologies Inc.

DeFi Technologies Inc. is a technology company bridging the gap between traditional capital markets and decentralized finance. The company generates revenue through three core pillars by catering to individuals, institutions, and running DeFi protocols.

For more information, visit https://defi.tech

About Diamond Equity Research

Diamond Equity Research is a leading equity research and corporate access firm focused on small capitalization companies. Diamond Equity Research is an approved sell-side provider on major institutional investor platforms including Factset, Morningstar, and Thomson One.

For more information, visit https://www.diamondequityresearch.com.

Disclosures

Diamond Equity Research LLC is being compensated by DeFi Technologies Inc. for producing research materials regarding DeFi Technologies Inc., and its securities, which is meant to subsidize the high cost of creating the report and monitoring the security, however, the views in the report reflect that of Diamond Equity Research. All payments are received upfront and are billed for an annual or semi-annual research engagement. As of 04/11/2022, the issuer had paid us $35,000 for our services, which commenced 02/17/22 and is billed annually. Diamond Equity Research LLC may be compensated for non-research related services, including presenting at Diamond Equity Research investment conferences, press releases and other additional services. The non-research related service cost is dependent on the company, but usually do not exceed $5,000. The issuer has not paid us for non-research related services as of 04/11/2022. Issuers are not required to engage us for these additional services. Additional fees may have accrued since then. Investors need to be aware of the high degree of risk in small capitalization equities including the complete loss of their investment. Investors can find various risk factors in the initiation report and in the respective financial filings for Defi Technologies Inc.

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