Staying The Course: Pascal Gauthier, Chairman And CEO, Ledger Ledger is a Paris-headquartered manufacturer of hardware cryptocurrency wallets that reportedly stores more than 20% of the world's crypto and 30% of the world's non-fungible tokens (NFTs).
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"I like to start early in industries- 2000 was still early for the internet, [and] 2014 was definitely very early for crypto." This statement by Pascal Gauthier, Chairman and CEO of Ledger, a Paris-headquartered manufacturer of hardware cryptocurrency wallets that reportedly stores more than 20% of the world's crypto and 30% of the world's non-fungible tokens (NFTs), offers a peek into the philosophies that has guided his time in the entrepreneurial arena thus far. "I like to work on opportunities when very few others are there, so that I can build my edge," Gauthier says. "When it kicks in, I'm ready, and I can enjoy the benefits of my work."
Looking back to the start of his career, Gauthier says that he left university and entered the workforce in 2000, at a time when dot-com startups were enjoying increased investor confidence- although many among them would eventually shut down in an industry-wide crash. "But after the bubble burst, it created a lot of opportunities for me," Gauthier says. "Most of my peers went back to consulting, banking, and so, and people thought that the internet was a phase, that it would never work- but I didn't see it that way."
Having launched his career at price comparison service Kelkoo (which was acquired by the then internet giant, Yahoo, in 2004), Gauthier then went on to join advertising company Criteo in 2008, where he worked for five years as its COO. "I did the first part of my career in advertising technology, and that's where I learned the first major lesson in my career," Gauthier says. "If you find good leaders and good managers, you follow them, and you learn from them, so eventually you can one day do that yourself, which was what I did at Kelkoo."
Indeed, Gauthier credits those experiences for equipping him with the skills that would prove important for leading Criteo successfully. "In 2008, it was a very small startup- it had raised money, it had a team, but it hadn't found its business model. It wasn't generating any revenue," he recalls. "So, I helped turn the company around, and made it successful. It was the fastest growing company in Europe. We took it from zero to the Nasdaq Stock Market in five years. In the past 20 years, it remains the only French company to list on the Nasdaq."
Following his time at Criteo, Gauthier went on to work at venture capital (VC) firms Mosaic Ventures and Index Ventures, and those roles are what eventually led him to Ledger. "Venture capital helped me figure out how to raise money," he explains. "You go to the other side, and you learn their ways. After that, I was ready to go back into entrepreneurship, and so, I started Bitcoin-focused financial data website Kaiko, and I also invested in a bunch of companies, including Ledger."
Gauthier recalls here that during his time in the VC space, Bitcoin was coming up in more and more conversations, and it was a brief 2014 chat with Wences Cesares, CEO of Gibraltar-based crypto private bank Xapo, that resulted in Gauthier starting to "dedicate time, resources, and hard work to Bitcoin, and crypto in general." "It was very early, which gave me time to learn, which was important to me, as I didn't want to jump into something that was already a bloodbath with many players," Gauthier continues. "My first reaction was to meet as many people as possible, everywhere in the world, to see what people were building. I was fascinated and intrigued by the kind of people in crypto at the time- they were trailblazers, a little crazy, the kind of people you want to be at the same party with. It looked like fun."
That said, at the same time, there was also an obvious lack of interest for Bitcoin and crypto among, well, everyday people. "They didn't know why they should care, or why it was important," Gauthier says. "They didn't experience it. There was no everyday application yet. It was different from the internet- with that, you had email; people could understand that. There were use cases. Bitcoin didn't have that."
It makes sense then that with Ledger, Gauthier has made sure to create an everyday application of crypto. Ledger manufactures hardware wallets, specifically three products -Ledger Stax, Ledger Nano X, and Ledger Nano S Plus- which can be sold in bundles, such as a family pack or a privacy protection pack, accompanied with accessories for extra security or connectivity. "I joined in 2014 as an investor and board member, in 2017, I became president, and in 2019, I took over as CEO," Gauthier says. "My challenge was to rebalance the company, make it a tech company, and hire many more engineers. We had forgotten to scale the tech and engineering part of the business, with only 25% of our staff in engineering. Now, we're at 50% or more.We also had to present a roadmap to the board and the team, and to date, we're executing on this, and revenue since 2019 has increased 10x. So far, so good."
Users of these wallets are further supported with the Ledger Live app, which helps you buy, lend, exchange your crypto, or get access to all the company's smart services, such as decentralized finance (DeFi) apps, NFTs and more. "When we build a product, it's not just a device, it's an experience- so the whole company is involved in creating that," Gauthier says. "Everything we do is catered towards that experience- the e-commerce platform, the device itself, Ledger Live, the ecosystem, and so on. When you build an experience like Ledger, everything has to make sense, it has to flow together- the unboxing experience, the marketing and communication, first-time connectivity, customer success, etc. It's not just a basic consumer electronic product. It's difficult, but it's a group effort."
Pascal Gauthier, Chairman And CEO, Ledger. Image courtest Ledger.
Ledger currently has over 750 employees, spread between France, UK, USA, and Asia, and Gauthier finds diversifying locations to be of crucial importance for finding good engineers to work at his enterprise. "Technical talent is always hard to find, but the right technical talent is extremely hard to find," he says. "For every ten people we interview, only one will get hired. You need a really efficient, high-performing organization to find this talent, recruit them, and replace them if they leave. It's an ongoing process."
Meanwhile, as the crypto world at large has been suffering from a so-called "winter" of late, Gauthier believes that it -along with the collapse of major crypto exchanges – has allowed Ledger to surge "leagues ahead of anyone else in the space." "Earlier this year, we announced that we had sold over six million devices," he says. "While we don't discuss financial specifics, we have consistently outperformed the market. Ledger Live revenue and volume has seen 200% growth year-on-year, far outpacing the current market conditions."
However, it hasn't been all rosy for the company- 2023 saw one of its new services, Ledger Recover, come under fire before even being launched. To understand the premise behind Ledger Recover though, a refresher on crypto basics is necessary. In addition to public and private keys, an important element of holding and transacting with cryptocurrencies are seed phrases, i.e. 12 to 24 random words that serve as backup codes to be used if you lose or delete your crypto wallet. But since seed phrases also cannot be changed or recovered if lost, people have lost millions worth of crypto over the years. Now, Ledger Recover was a new service designed to change this aspect for its Ledger Nano X, which would allow users to store encrypted versions of their seed phrases with three custodians. However, the crypto community at large had lots of reservations about this process given its inherent security risks, and they made their displeasure publicly known. In response, Ledger agreed to make the service strictly optional, as well as to open source the Ledger Recover protocol with the community, with Gauthier describing the whole situation as "a humbling experience."
Despite this blip on the road, Ledger still has plenty to be happy about its accomplishments this year- it, after all, did raise US$108.8 million in a Series C funding round in March. This brought the total amount Ledger has raised, as per Crunchbase, to $577 million, spread across eight rounds from 58 investors. Here, Gauthier readily admits that raising money is always difficult- but it is especially so in the field he operates in.
"What's different with crypto, perhaps, is that you have a market that is volatile, which creates big fear-of-missing-out (FOMO) moments where anyone can raise money, but also big depression moments where nobody wants to invest anymore, and it's very hard to raise money," Gauthier points out. "It makes the business hard to forecast- it's nearly impossible. When predictability is hard, it becomes difficult to raise money. We were proud to raise during a difficult moment for crypto, because it showed our resilience when others couldn't show they were resilient. Most other businesses are building on established and predictable industries, with a known total addressable market. In the last bull run, the total addressable market of the entire crypto market was over $3 trillion. Today, it's closer to $1 trillion, so you need to deal with that."
So, what would Gauthier's advice for entrepreneurs still wanting to make it big in this space? "Stay the course," he replies. "That's all."