Earnings call transcript: Crunchfish Q4 2024 focuses on India market potential

Crunchfish AB, a company at the forefront of offline digital payment technology, is facing financial challenges as highlighted in its Q4 2024 earnings call. According to InvestingPro data, the company’s financial health score is rated as WEAK, with particularly concerning metrics in profitability and price momentum. Despite the hurdles, the company is strategically focusing on the Indian market, which represents a significant opportunity for growth. The company’s stock experienced a decline of 4.66% following the call, closing at $0.84, contributing to a stark 81.9% decline over the past year.

Key Takeaways

• Crunchfish is prioritizing the commercialization of its offline payment technology in India.
• The company is in discussions with major Indian financial institutions and authorities.
• Despite financial struggles, Crunchfish remains optimistic about securing a major deal in India by mid-2025.
• The stock dropped 4.66% post-earnings call, reflecting investor concerns.

Company Performance

Crunchfish has positioned itself as a leader in offline payment solutions, a niche market with limited competition. The company’s strategic focus on the Indian market is driven by the country’s dominance in global digital payments. However, the company’s financial challenges, as noted by CEO Joakim Salmonson, highlight the urgency to secure business deals to sustain operations.

Financial Highlights

• Revenue: No specific figures provided in the call
• Earnings per share: No specific figures provided in the call
• The company is focusing on business development rather than immediate financial metrics.

Market Reaction

Following the earnings call, Crunchfish’s stock fell by 4.66%, closing at $0.84. This decline reflects investor concerns over the company’s financial health and its ability to secure significant business deals. The stock remains closer to its 52-week low of $0.73, indicating a challenging market environment.

Outlook & Guidance

Crunchfish is optimistic about its prospects in 2025, with a potential breakthrough deal with the National Payment Corporation of India expected in the first half of the year. The company is also exploring opportunities in Africa, although these are expected to be smaller in scale. The focus remains on leveraging its patent-pending technology to secure credibility and financial sustainability.

Executive Commentary

CEO Joakim Salmonson emphasized the importance of the Indian market, stating, "Focus on business and in India is where the big business is really." He acknowledged the company’s financial pressures, noting, "We need to get business now. We can’t just go on with great technology that hopefully will give something." Salmonson’s comments underscore the urgency of securing deals to ensure the company’s viability.

Risks and Challenges

• Financial sustainability remains a critical risk if business deals are not secured soon.
• The competitive landscape in digital payments, although limited, poses a challenge to market share.
• Regulatory hurdles in international markets could impact the rollout of Crunchfish’s technology.
• Macroeconomic factors, such as currency fluctuations, could affect international operations.

Crunchfish’s Q4 2024 earnings call highlights both the potential and challenges facing the company. While the strategic focus on India presents a promising opportunity, the company’s financial health and ability to execute its business strategy will be crucial in the coming months.

Full transcript - Crunchfish AB (CFISH) Q4 2024:

Joakim Salmonson, CEO, Crunchfish: They will be part of

Martin, Interviewer/Host: the contribution

Joakim Salmonson, CEO, Crunchfish: of the

Martin, Interviewer/Host: Company has just released its year end report for 2024. I’m joined by the CEO, Joakim Salmonson. Very much welcome, Martin.

Joakim Salmonson, CEO, Crunchfish: Thank you, Martin. Thank you. I will talk about

Martin, Interviewer/Host: the report, of course, prospects and ambitions for the company. And it’s also based on your questions. So I encourage all viewers to send in questions using the Q and A function at the bottom of the frame. So, and we’ll address them during the session, of course. But, let’s start with the report.

The headline is focusing on business. Why have you chosen this headline?

Joakim Salmonson, CEO, Crunchfish: Well, I think it is almost I don’t know how many has contacted me and say, we need business, we need business, we need business. And I don’t know, we know we need business and that is what we need to create. We have a fantastic product. We have fantastic technology. But what really going to turn things around is that we actually can capitalize, that we can commercialize our technology.

So it is focused on business. That is we fully understand that and that’s what we need to do. We’ve developed over the years a lot of technology, some hasn’t been successful. And now we have focused down sort of our business to let’s bet on this, offline payments that we filed for a patent in 2020 and worked with since then. A lot of focus has been on India as we understood that India has an opportunity in this area.

But we’ve said, we understand. We need to get business now. We can’t just go on with great technology that hopefully will give something. Now we have to deliver as well. Certainly, I think our whole financial situation demands that.

Time is actually against us right now. So, we just need to we need to perform. So, the focus is in the company for business and we know that. So, that’s why I think we I put it as a high headline that we understand.

Martin, Interviewer/Host: Yes. Yes. And we’ll come back to the patent discussion a bit later. But let’s start from your most imminent focus area, which is India. Could you describe the environment or, I mean, you’re in talks with the Reserve Bank of India (NSE:BOI) and National Payment Corporation of India and several banks and, yes.

Joakim Salmonson, CEO, Crunchfish: Yes. What’s going on? Yes. What’s going on in the market? Yes.

I think from a reporting perspective, I’m actually very glad to say that where India is we’ve developed our products for demands in India and we’ve been focusing on India since day one of offline payments. And the development that has happened during the last months here has been in India. And that is if we’re going to look at 2025, what can turn this around, India is the key market for sure. So we’re very happy that this is where things has actually that’s happened a lot.

Martin, Interviewer/Host: And the RBI is pushing for implementing the digital currency? Yes. That is

Joakim Salmonson, CEO, Crunchfish: one thing that is going on. I think RBI took already in 2023 decision that they will pilot their digital rupee. And it was a product that already from the start, they said it’s going to work also offline. But they built a system which and we’re going to I think let’s come back on that after I’ve described all the roles as you first asked. They built a system which is that they digitized the bank notes that you have physical bank notes, bills basically, INR 100 bills and INR 1,000 bills and so on.

And they just made an exact copy of that, but digitally. They actually and this is news. They actually going away from that. It’s not going to be based on that. And this shift in the market is actually very good for us because now they’re going to develop a new system, which is much more closer to how we look upon offline payments, it suits better.

Martin, Interviewer/Host: So this is what you’re writing in your report, this is the value based tokens?

Joakim Salmonson, CEO, Crunchfish: Yes. Instead of having only fixed values, they have a digital token for 1,004 hundred, then a token could be on any value. And why is that important? Well, if you think of it in a payment situation, it’s going to be hard in a payment situation because I need to have exactly the right amount of tokens or alternatively you would have some tokens that you can turn back as a change giving me back something. But that will very seldom match exactly the amounts.

In online, you can sort of do it because then you can online do some of the changes. But if you’re offline and you’re stuck with what you have, it’s actually hard to get something actually working. And they’ve realized this, and so that’s why they’re doing a major change. But back to the roles that so RBI is pushing along for offline payments. They’ve been doing that since they came up with their idea that let’s pilot for digital rupee.

And it’s similar to what other central banks are doing in the world that offline becomes sort of a priority. We’ve seen it in Europe and we’ve seen it we were involved with some other central banks in the world as well. Offline is driven in a way by the central banks. Their cash is offline, the physical cash. Digital cash needs to be that as well.

So an RBI is pushing this along. Then there is this company, MPCI, or there’s organization, I’d say MPCI. This is the National Payment Corporation of India. They have been started some years prior.

Martin, Interviewer/Host: And they are running the payment system?

Joakim Salmonson, CEO, Crunchfish: They run this payment system. And in a way, they are they have it’s sort of a bank corporation. There’s a national payment corporation of India. But they’ve also been initiated by RBI. So it’s almost like a government organization, although that they have private players there as well from the banking sector.

And they as you said, they operate in a way, the systems. And they have their enormously successful payment system called UPI. It’s now up to, I think, 17,000,000,000 transactions annually. No, sorry, monthly, I should say, monthly. They do enormous amount of online transactions.

And they’ve launched something called UBI Lite X, which is a very similar system to ours, but it’s still not out in the market. RBI has not let them go beyond they have it in their own app. MPCI has their own app in the market, which is not spread very widely in the market. That is the only place they have it. So authorized it’s not really there with it.

But they still they have it, but it’s not that there. But MPCI is the company behind a lot of the payment products in India and especially then UPI. But MPCI is also involved with RBI because they are the one that writes the specs for how now, yes, both the previous system and now the value based system. So MPCI is they’re also integrally involved in how the digital rupee going to be organized. So MPCI is also very important player for what RBI is doing in this area.

And then we’ll come to the banks, because and the banks, they are the ones that are behind it. If we talk to Digital Rupee, there are 15 pilot banks that is RBI is working with to sort of launch this. And they’ve recently also opened up that also sort of other players than just banks can actually also do digital rupee transactions. That’s also a recent sort of announcement that has happened. So not only the banks’ payment instruments can do it, but also third party application providers, as you call it, that they will also do it.

So this whole mix is where we are acting. And we have dialogues with RBI. Physically, I met them in January. I was there for the Harbinger third year final of the Hackathon. And I met with MPCI, and I met with sort of banks while I was there as well.

So we are talking to all of them here, including the Wallace also. And in this mix, we are positioning our offline technology as something of value. And there is still, I would say, keen interest. There’s been a lot of discussions back and forth and a lot of proposal sort of back and forth. And I’m happy to go into more of the details there.

But we are we haven’t lost the game in India. There has been rather shifts in the market. And I think the most important shift is that the RBI is introducing now value based tokens, which for an offline sense, it’s sort of working like our system is sort of working that you sign out that exact amount that I pay you with Martin. I’m not just having something almost like a voucher that I can give you and we would have a problem with that. We have a big problem there.

So now they have a system that actually I think is set up for proper offline payments. And we are as RBI knows us, they have even approved our system back in 2023. They know we can do offline payments and they are pushing in a way for how about working with sort of the country solution model.

Martin, Interviewer/Host: So can I ask about do you know anything about the change to value based token? Is it imminent or is it a plan for Yes,

Joakim Salmonson, CEO, Crunchfish: it’s imminent. They’re doing it now. RBI has they have a deadline for all the pilot banks needs to be ready in Q1 with the ships into a new architecture. And that affects it’s not only offline, it affects online as well because the whole system will change. And the deadline is Q1.

So everybody, all the banks are super busy right now doing this shift here really. But in the mix of that, it’s also about it opens up a much more opportunity to actually properly do offline payments and this is where we come in.

Martin, Interviewer/Host: Do they have a plan for the offline segment as well or

Joakim Salmonson, CEO, Crunchfish: just Any other pilot bank, not all pilot banks have done on offline payments in the first sort of we talked to one bank the other week and they were one of the first ones. They launched already in 2023, but they since then had only done online payments. So for them, they would now first update it to value based payments for online payments before they actually take on offline payments as well. But there are some banks, some of the leading banks actually that have done offline payments. And for them, they need to update it as well for the offline part.

Martin, Interviewer/Host: So there will obviously be a need to do the offline payment solution. What alternatives do they have apart from you? Do you have any competition?

Joakim Salmonson, CEO, Crunchfish: Well, there are. I think one thing which was announced just I think that was just a month back. We were in the regulatory sandbox back in 2023 for our smartphone based offline payment system. They’ve just announced that they’re going to work with a company called Xsto in India. They are very good at doing it on a smart card.

So, they’re going to be now in the regulatory sandbox. And we haven’t been focused on, say, the smart the actual smart card. We focus on actually doing it on a mobile. But they are now in the regulatory sandbox for that. That is another way of implementing offline payments that you actually can do it from a card as well.

So they’re going to try that, which is fine. And then obviously, there is MPCI, what they have done. And they’ve done one solution for offline for UPI, but it hasn’t yet because it’s not secure enough. It hasn’t been spread in the market.

Martin, Interviewer/Host: And that is the UPI LITEX that you mentioned?

Joakim Salmonson, CEO, Crunchfish: Yes, that’s UPI LITEX. So that is and they can’t just take UPI litex into what is happening, but they are that’s another offline player, which is part of the ecosystem. But as that one hasn’t been released yet because of issues. Then we are talking to RBI and we’re talking to MPCI that we have an approved solution already, why don’t we build it on sort of our technology, which could be sort of the baseline for the market.

Martin, Interviewer/Host: Yes. And in all this change, you’ve started collaboration with a subsidiary to the RVI?

Joakim Salmonson, CEO, Crunchfish: Yes. They reached out to us. This also was quite recent. They reached out to us after my visit in January to for the Harbinger final. It’s a subsidiary.

They invest in technology and they look a little bit more long term. And the focus there, they want to talk about offline because they know that’s our strength, but they also have a related area to offline and or to payments really, which relates to offline as well. And they’ve said if we could help them of developing in that area as well. So this is we made a proposal for them as well. But again, it shows that RBI is I think we’re well seen with RBI.

I think they like what we do. And they are for back to offline again, where the push is for offline in the market. The most focus is right now, let’s do it for the digital rupee. And this is where RBI in a way sets the agenda, and we are one of the players. I want to one thing I it might be a good time to come up with that.

I think why does it take so long? Why is it difficult? Why don’t we sell already? Well, I think it’s linked to the fact that if you are a central bank or MPCI for that matter, who deliver something for the entire country that the whole country should use, they are struggling with making themselves dependent on a private venture. Even an Indian private player, they wouldn’t like that either, but that would be maybe easier for them to swallow, but they don’t really like that either.

But a foreign private company, it’s highly risky for them to make themselves dependent on a foreign entity. Because what happens with this foreign entity if it’s sort of will that foreign entity survive? But also maybe it’s bought up by more of a hostile organization. So they are making sure that we what we invest in, we need to have control over and we need to own it. That is one thing.

And we are working with them to come up with a way of how can you actually get our technology so you control it. But we still have the chance to we can’t give away what sort of all rights to our things, but how are we going to manage that? This is one of the key discussions that we have. And it’s similar for Europe. Europe was very clear in their tendering process for the digital euro, European Central Bank said, we need to own this.

We cannot ever put ourselves in a dependent situation on private players. So we need to we are willing to pay, we’re willing to own it, but then it’s us to actually control it. And similar discussions we’ve had all along with MPCI since we started talking to them back in 2020, but also with I think they all understand that. They need to be in control because otherwise they risk that their backbone of that payment system is actually potentially you can be in a hostage situation that someone else come in and sort of puts

Martin, Interviewer/Host: So why not invest directly in Crunchfish?

Joakim Salmonson, CEO, Crunchfish: Well, but they don’t really that would mean that it would buy us. That could be one alternative. That could be one alternative. But I think what we are rather right now, the solution we’re coming up with is that what they could invest in is the right to use our patent solution. All our know how under patents, they can have the right to own that.

And then the product could either be delivered by together with us, with MPCI to all the banks, and or it could be that the banks will be responsible for actually implementing their own solutions. But the fact that they can actually have the right to use our patent base and our know how means that they can actually own that part. And then the product delivery in itself could come as a step two. And that could either be as with this with our solution, there is the Ekso solution or it could be other solution. But this means that we can also then scale that solution in the future.

But then there are the discussions with MPCI as well, because MPCI is known to deliver components for this backbone solution. And this is where MPCI is it’s the reason that this week MPCI has come back to us and said, we want an updated proposal from you. We did a proposal back in November, which was our solution So

Martin, Interviewer/Host: the proposal is the one that you’re describing in the report and they want an updated proposal? Well,

Joakim Salmonson, CEO, Crunchfish: we had already a proposal back in November, but that was our solution, which was our technology that we control. But as many people who are following us knows that we have developed our product. The product is developed within something called VT, a virtual secure element that comes from Singapore. That part is very hard. We can’t sell full rights to MPCI or anyone to use that because that’s the property of VT.

So now the last idea of MPCI is that why don’t we think of this way instead that let’s take that out of the equation and do use your technology, but we figure out together the security arrangement around the technology. So right now, I think and they’ve said give us a new updated proposal taking out the virtual secure element in it. That means that our product currently is based on that. But right now, they want to have the specs and they want all the patents and the know how, but that’s what they want to then instead pay for. And then we can co create together with them something new, but in this sense, not based on it.

But this means that they can control it, but they can also then deliver something with our help, but will be a new source system. That was what we’ve focused on as late as this week. So it’s been a moving target. But I think everybody I think what I want everybody to understand is that I can understand, just like Anne can understand the European Central Bank, we need to own it. NPCI has the same thing.

We can’t distribute to everybody and then all of a sudden, there is some hostage situation that we don’t have the control technology and all of our things are same. But I think we’ve now come up with a way that they could still invest in us and make a deal with us and then we co create something together for the Indian market. Or alternatively, they as RBI could do as well, let’s open, we have the specs, they have the patent rights, and then there could be the banks will then invest something which follows the specs, so they will buy the products. So you’re now in the

Martin, Interviewer/Host: process of considering how to respond to the updated request from

Joakim Salmonson, CEO, Crunchfish: We have already responded. We already sent out proposal. So we Do you

Martin, Interviewer/Host: have an idea for how long the project will be?

Joakim Salmonson, CEO, Crunchfish: Well, we said in November that it will take three to six months to reach an agreement. I think we would have been there now if they had taken our original proposal. But I’m glad I said sort of three to six months because now I think we will go into a new round of discussions around this latest proposal. So that might take but we’re getting close. And we are talking about infrastructure for the entire Indian market.

And what we would get money for is actually our know how, our patent rights here. And then we will co create something together then with that would be for MPCI that will work offline. But we again, it was sent earlier this week. So but I think it’s important things are moving all the time. We are responding and I think we are we’re getting closer.

And this is the big breakthrough for us. So yes, I think we are on track of what we said. Three months was in a way, if they had gone for the proposal we sent in November, we could have been there now. But now they’ve just shifted the goalpost. Let’s take out in a way our security arrangement and let’s try to do that together instead.

Martin, Interviewer/Host: Which could potentially be a bigger prospect for you?

Joakim Salmonson, CEO, Crunchfish: Well, it’s a new scenario, but we yes, that’s where we are with it really. And then there are the banks who are the players that’s going to implement this solution and the wallets that’s going to implement this solution. They are part of the pictures and we’re having these discussions with some of these leading banks in the markets and they I think they understand that we know offline payments very well. And but the question is, would it be them being fully responsible for the security here themselves and then they need us very dearly? Or will they get something here from maybe MPCI and hopefully something a deliverable which comes from us and MPCI that MPCI owns, but we have been part of developing that.

Martin, Interviewer/Host: You have a commercial agreement with HDFC bank, First Bank?

Joakim Salmonson, CEO, Crunchfish: No, IDFC. Sorry. IDFC.

Martin, Interviewer/Host: IDFC First Bank (NASDAQ:FRBA). And can you give us any updates? Are they awaiting this upgrade from AOI or

Joakim Salmonson, CEO, Crunchfish: Right now, they’re also fully busy on doing this shift into value based tokens. I think our the product we have with them, it’s sort of for what we call remote offline that you use the telecom routes to connect to the back end instead. That product still works. And we’ve had a meeting just a really almost as long as you do that shift yourself, there is sort of zero impact on this product. So this would also come along.

But IDC is very we’ve talked about full offline as well, where I can pay you without any connectivity. And they are keen to that’s a bank that is very keen that we can showcase that in the market and that might it might come to that as well. So it’s good that they’re behind us very much

Martin, Interviewer/Host: still. Yes. And you also mentioned in the report, you’re talking with wallets, digital wallets. Per day?

Joakim Salmonson, CEO, Crunchfish: Yes, that’s a big section of the market as well that there are sort of wallets in the market. It’s one particular right now that we’ve had a dialogue for a long time is with a petrol company who have because if you’re out in the countryside, poor coverage, they want it’s a closed loop sort of solution that you’re putting money into a wallet of that petrol company and then you can use that for filling up your gas. And they like that to be work offline. So that’s one of those it’s not in a way it’s just one opportunity. What I talk about with MPCI and RBI, this is for the whole shebang in India.

This is huge compared to some of those minor deals here and there. This is national infrastructure. This is why they need to own it and can’t just become too they can’t get dependent on us.

Martin, Interviewer/Host: But such a deal with a digital wallet could also validate your case

Joakim Salmonson, CEO, Crunchfish: in the market? Yes. But it would be one deal instead of the other one would validate us for the world in a way. That would be a major step forward. I’m not we want the business if we can get and it would be nice validation, but it would be one player out of many, whereas a major central bank like India and also done it together with MPCI, who is known for having now the most successful real time payment system in the world, I think that will be the major breakthrough if we get that one.

Martin, Interviewer/Host: Would you like to add anything about the developments in India before we move on outside of India?

Joakim Salmonson, CEO, Crunchfish: Well, no, I think the my basic India is key to us. I end my CEO word is that this is where we can have where really we can get a major sort of deal because it’s for the whole country if we do it. And I think the good news is that a lot of good things has happened in India. And we yes, our key market, which is key to our success, This is where we have taken a lot of good steps forward. And I’m that’s what excites us.

That’s what keeps our spirits high in the organization still.

Martin, Interviewer/Host: So outside of India?

Joakim Salmonson, CEO, Crunchfish: Yes. India is inside India than out here. Outside of India, yes. Let’s go to out here.

Martin, Interviewer/Host: Yes. Could you update us on the CBDC project in out here?

Joakim Salmonson, CEO, Crunchfish: Well, the biggest offline product in the world by far is Europe. The Central Bank European Central Bank has put over they budgeted for over €200,000,000 for the offline part. And they’ve said it can even go up to million, and it’s sort of a tendering process. We have signed very strict confidentiality agreements. So we can’t actually comment on sort of where we are with that one.

What they’ve opened up for as well is that they want for something called programmable money. They want innovative ideas. We have filed and because that’s something we filed a patent for back earlier last year. And so we have said, we know how to make programmable payments work for offline payments well. And we hope to get sort of some response out of that.

That goes besides because programmable payments is not just for offline, it’s actually for it’s just a feature of the digital Eurosystem that they’re interested in. So that’s another one we’re part of. But the major development there for us is that our four patents that we filed in January 2020, that is already granted in The U. S. We got that in July.

But we’ve also got in December a notice of allowance, which is sort of the they’re basically saying the European Patent Office have said, we are now ready to grant you the patent. And they give us, okay, this is what we want to grant you for. Are you okay with that? And we are in that process now. We’ve got the notice of allowance and then there is sort of some formalities that’s going to happen before we actually get the grants.

But this is interesting in Europe because it’s sort of our original idea, which is very fundamental to offline payments, is actually now being approved, not just in The U. S. As we have it, also in Europe, it’s pending in India as well. And what we came up with in 2020, and I actually did, and for that reason, I decided, let’s explain a little bit more in this report about what is this patent? How can you understand it?

And there are a couple of pages on that. But Europe is important, the fact that we’re actually getting this one granted here. And then in Europe there as well, there is with one central bank who are right now using our technology for a pilot. This is an unpaid pilot right now, but it’s sort of an Eastern European country doing it and they are sort of now they’re going to soon launch and do a pilot. And the pilot is going to be I don’t know if it’s ending in Q1 or if it’s just Q2, but it’s they’re going for it.

It’s ongoing. And then, we have another it also is the European that is highly interested in our technology that we have discussions with for a pilot as well. So, we have other central banks interested in our offline technology for, yes, CBDC. So, it’s and then there is the big one. It is obviously European Central Bank, which is a huge project as well.

But I unfortunately, I’m not allowed to say anything because But will

Martin, Interviewer/Host: the patent loans help you in the tender, do you think?

Joakim Salmonson, CEO, Crunchfish: It depends on how you design things. But I think there’s a lot of aspects of offline payments and it’s valid. Europe has talked a lot about that they want hardware based security for offline. But this patent protects both for hardware and software. It’s not just software based solutions.

So it will be there. So we will yes, but it’s too early to say anything really. But it’s something which applies to both software based security as well as hardware based security. So things are happening in Europe, other parts of the world? Africa.

We have our friends at SARS Expans that they actually told us that they had one or even two deals that will close before end of the year. None of that has they didn’t happen. But there is one of these deals are now it’s up for Board approval in February. So that’s very soon. So that’s sort of an African country there where we’re hoping to actually then that’s just like this petrol in India.

It’s sort of a wallet and they want offline because that’s important in their country. And I hope for us and for us to expand and also for this country that they take this on. It’s a dominant wallet. We’re having, I think, 60%, seventy % of the population using it. So, it’s one of these deals as well, which as you said, would validate our technology.

It’s not as big as India by far, but it’s still a would be a great thing if we would get that. Just to get business, get going and yes.

Martin, Interviewer/Host: Yes. And we spoke a bit about patents in Europe. And what’s the situation in India?

Joakim Salmonson, CEO, Crunchfish: All our patent applications are pending in India. Nothing has been granted there yet. This one we filed originally in 2020. We got it first in U. S.

We got it in Europe. But India, you know, it’s we are in that examination process. So this is the one we hope we will get. And that will actually protect us for offline payments similar to UPI litex. So it will be hard, I think, to do UPI litex if we get this patent sort of approved.

But also, I think we would exploit this patent for how we want to do offline payments for the DITROL rupee as well. But then this is not our only patent, this one in 2020. We have, I think it’s I don’t know, is it more than 10? And they are also in various stages. But the one we filed already in 2020 is now the one which granted in U.

S, granted soon in Europe and pending in China and India as well. But it’s we don’t have got the patent yet, but it’s in process, I

Martin, Interviewer/Host: guess. We received a question regarding the MPCI. And the thing that we don’t like, Viki, is it for the same reason as Crunchfish, a small player outside of India

Joakim Salmonson, CEO, Crunchfish: or I think they appreciate what Viki has done. The Viki the virtual secure element is a great thing. I think MPCI also recognize that. I think we’ve talked about doing a proof of concept. This has been for doing a proof of concept of the virtual secure element.

That’s what they’ve been asking for and because they wanted to see understand it more in operation. But the problem is not that they don’t like us or like Viki, the problem is with control. Because the Viki system, the virtual secure element that they deliver, VUS, virtual operating system, that is a security environment that Viki has sold to hundreds of countries companies in the world, banks and many other places. And Viki cannot provide MPCI with full control of source code. They basically said, we can’t because then they will jeopardize the security for their other customers.

So we have explained to MPCI, and we did that in November and we’ve explained it again when we had a meeting in December with MPCI that The U. S. Virtual secure element on Viki, that’s an operating environment which is secure. You cannot get access to full control of that. But this is why they now turn to us and said, let’s for our solution, which we need control over, let’s do it this way.

We want to work with you, give us a quote, but take out VOS out of the equation. So we could actually together because MPC and I have a lot of payment products, so they know a lot about security, but they don’t have a virtual secure element, but they know about security still. But they are figuring out can we actually do something together on the security side, which we have then control over, but using your know how and technology for offline payments. This is where it now stands.

Martin, Interviewer/Host: Okay. We also have a question regarding the bidding and the talks with MPCI. How many players are talking with MPCI

Joakim Salmonson, CEO, Crunchfish: in competition with you? Do you know? No. Well, I don’t think there are too many. Not that many.

There are. I think we just we saw this Eksto. We met them a few times at these Harbinger events where we see a little bit the Indian And that’s the card. Yes, they are strong on the standalone cards that you can have a store value on the card. So they talk to, I think, RBI and they talk to MPCI.

There are some other solutions for various implementations here. But I think our strength is that we work very early. We have some key patents and they know for the form factor of a smartphone, which MPCI focus on and we focus on as well, we have I think we have the most know how in that area. And that’s why I think it’s this is why we are in these discussions still, because I don’t think ideally, they would have loved to work with an Indian player, but they are, as I said, as late as this week, they’ve asked us, let’s do it this way now then. We want to control, let’s do with your technology for the Indian market, but let’s take out and Viki out of the equation because you can’t sell that to us and with full rights.

And we can’t. And Viki have just said that we discussed that with Viki as well. And they’ve said we can’t give it we simply can’t give that right. And that’s just because then it would jeopardize their own business really. Then they would have to buy that also.

But I think they are they’re not asking us to buy us, they’re not asking to buy Viki. So that’s why I always

Martin, Interviewer/Host: Yes. And regarding the ECB tenure, could you tell anything about the competition there? Or is it just

Joakim Salmonson, CEO, Crunchfish: I think it was official that for offline, there were five maximum five, that’s all they said is going to be We are one of them. We are one of the five. You have pockets. One of the five. And that’s all they’ve it’s been officially released.

Nothing else really.

Martin, Interviewer/Host: We have a question regarding, if you are in discussion with the Georgian Central Bank regarding the CBDC, is that something you can answer?

Joakim Salmonson, CEO, Crunchfish: Well, that’s very yes. Well, that could vary. We are in discussions with Eastern European and Georgia could be one of them. But I’m not sure if I, under the NDA agreements, could actually sort of say anything, but that could be one of them, yes.

Martin, Interviewer/Host: Yes. And I encourage everyone who’s watching to send in questions. Joakim will answer them as best they can. In the meantime, of all the prospects you’re involving right now, which is the most likely to materialize during the first half of twenty twenty five, say?

Joakim Salmonson, CEO, Crunchfish: Yes. Well, as I said, we one small deal here that SARS-one said would close already in Q4. We hope to get that one and that we’re waiting for an approval that this product will go ahead and then we’ll have to be contract signing and so on for it. So that could be one. But the main focus, which takes up most of my time and the organization’s time, is to get those breakthrough deals in India.

And we are we have proposed for RBI directly. We have worked with our subsidiary for one proposal and we have just proposed an updated, as I have described a few times here in this call, with MPCI. I really hope that they take us on because that will be such a major breakthrough for the company. And I don’t think they are just stringing us along. I think why would they?

They could have said no many, many times in the past. But I do think they are sincere and they are looking for a way to get something going, which fulfills their requirements that we need to have control, but we are interested in your technology. And I hope that we with MPCI now, we may have reached that idea. And we have proposed similar ideas to RBI where you could have control. We work with you to come up with a great way of doing offline payments for the digital rupee and then let the banks implement whatever they want.

They can use our solution and also maybe competing solutions. As we said, there are others. But we let you own the spec and own the patents to actually have the right to use the patents. That is what you can buy from us. And then we can open a market that anyone can then do offline payments.

And we will be one of the contenders. Because good thing for us then that we would scale very well because we would first get money for the system level specification and patent rights. And then it will be up to any of the payment providers, the banks or the payment systems to actually then acquire whatever technology they want to actually to get this work. And we will be one of them there also. But if we talk about Q1, Q2 here, as you said, it is to get that big deal.

Let’s just set there because that will turn things upside down and we are in the this is the leading payment country in the world. They do half of the world’s switch payments. It’s done in India. It’s just an enormous market for payments and we are we’re still seen as a credible player here for offline, which is just enormous if you think

Martin, Interviewer/Host: of it. And you want to have things in place in India before you build a proper business case in Europe based on your plan?

Joakim Salmonson, CEO, Crunchfish: Well, we are not just we’re putting most of our bets or most of our basically efforts into India because we need to break through that now. We’ve been working there for so many years without actually having this breakthrough that we’re hopeful. And we can’t run around everywhere in the world because it will take time everywhere else also. But if we can get India, that’s the focus, then we will have a lot of credibility and we will sustain ourselves with money and we can even have a scalable business here where the banks and payment systems are paying for the product. So we need to get India.

But we are not yes, we have our ears to the ground and we are with partners. We’re working in some other opportunities as well. But in the case is where we are directly involved and in direct contacts with the key players.

Martin, Interviewer/Host: We received a question regarding a company called Modoloop. Did you come in with that?

Joakim Salmonson, CEO, Crunchfish: Yes, we’ve come across them. They have a system which is a platform which can do almost like UPI. It’s sort of a it’s an open system where they can do push payments through their module platform. Just like in UPI, a lot of payment application, many apps can do push payments through UPI. And module loop is sort of a system that where they can put that in place and then you can do push payment through it.

So we have a dialogue with module loop about we could help you facilitate offline payments on the Modjlu platform, just like we can facilitate offline payments on the UPI platform.

Martin, Interviewer/Host: Is this in India as well?

Joakim Salmonson, CEO, Crunchfish: No, this is more in Africa. Their focus has been on a lot of third world sort of emerging markets in Africa. This is their main market for module loop. It’s not in India. They’re not in India, MPCI with UPI dominates.

But the module is sort of in many third world countries in emerging markets in Africa, this is where they put up their platform to help get something of a digital push payment system going.

Martin, Interviewer/Host: Yes. So complementing their platform? Yes. I think we have addressed the questions sent in. And to wrap things up, just what’s your feeling for 2025?

Joakim Salmonson, CEO, Crunchfish: Well, we are believe it or not, but we’re still optimistic. We are talking to the, I think, the finest payment market in the world, India. And if we we are talking to the right players, Central Bank, MPCI and many of their sort of leading banks and payment providers as well. If we can get it through, then what we’ve all been waiting for and dreamt for, it’s going to be a new situation for us. And I think we’ve come up with this way of actually making ourselves delivering something where they can be in control because we have this is where the patents comes in because we can give them the freedom to operate against with these patents.

And all our good know how, we can put that all into the specs of how it should be done. But then the product itself implementation is another matter that could go by MPC and or also that the payment banks would sort of have to source in whatever product they want, then we can get that as well. I have a good feeling about this. And it’s been a lot of good development during the last months in our direction. I think the shift in India for because offline right now is driven by the Central Bank, particularly for the digital rupee.

And the fact that they went for now this value based tokens instead of just having fixed banks notes and try to do that offline, which was a bad idea. Now, they have a much better chance to actually implement something. And it goes very well with how we have designed our system. So I have a good feeling about that. But it’s nothing is sort of done until we’ve signed a deal or sort of but we are we’re certainly moving forward with it.

And I hope we will get that. So my feeling is that we will get that breakthrough. That’s what we have to hope for, and we’re working very hard to get talking to all. So I have a good feeling for 2025, but it’s I wish we could have had this already in 2024 because then we wouldn’t have gone through this painful rice issue. But I hope we can turn it around by actually getting into the ecosystem of the leading payments market in the world India, and that would change the new future for us really.

Martin, Interviewer/Host: Thank you very much, Jotin. So focus on business?

Joakim Salmonson, CEO, Crunchfish: Focus on business and in India is where the big business is really. What did I say, three or four years, big deals are coming. I hope we can deliver that in India, but even if I don’t want to take those words in my mouth, because I’ve eaten enough over three years.

Martin, Interviewer/Host: Okay. We’ll see. Well, thank you Joakim again. Thank you, everyone who’s watching. And yes, watch this on Vethalmann’s YouTube channel.

It will soon be uploaded there. And until next time, see you later.

Joakim Salmonson, CEO, Crunchfish: Bye bye. Thanks, Martin.

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