Nearly every crypto company has partnered with Formula 1 teams in recent years, but arguably none have been more successful than OKX, who sponsored McLaren starting in 2022 just before the team won two constructors championships. Today we're talking with OKX global managing partner Haider Rafique about that partnership and how he's used experiential marketing to become the world's second biggest crypto exchange.
All right, we're here in Miami with OKX global managing partner and chief marketing officer Haider Rafique. And Haider, it's Miami Grand Prix weekend. I'm curious, you know, what responsibilities do you have or what things are you doing during race weekend as a major sponsor?
I think it boils down to fan experience. The thing that we look to focus on is can we enhance fans coming and enjoying the sport and making their experience a little better. So, we try not to think of ourselves as just a logo on the car. Our contribution to the sport has been that we experientially uplift the sport and when people come in they get to get closer to the team that we sponsor. They get to see what's behind the scenes and we can just really delight them through the access we have and the ways we actually end up activating the property.
Is there something specifically different about a race weekend in the United States versus elsewhere in the F1 calendar?
So, I think in the US, largely speaking, F1 is still a very new sport. You look at the last four or five years is when it's really gained popularity starting with the first race in Austin and then Miami and Las Vegas. So, when you look at the European fan base or Latin America or other parts of the world, one could argue they have perhaps more familiarity with the sport than you look at an average fan in the United States, they're still sort of learning and figuring out who are the legacy players, what's the great heritage and history behind the sport. So, with that said, what we also tend to see is there's more excitement from people in the United States towards the sport. It doesn't mean Europeans are less excited, it's just the fact that it's a new sport tends to bring more energy into these venues.
Got you. In 2022 is when you guys got into Formula 1 with your sponsorship with McLaren, but I know also, you know, at that time is when you guys rebranded and you also did a sponsorship with Manchester City. What I'm curious about is why sports and why that experiential marketing was the strategy you guys decided on that?
So, I had just gotten done rebranding the company from what was known and familiar as OKEX to OKX. And what I really needed were platforms that could really accelerate the familiarity of this new brand very, very quickly. And so, I had two paths. I could have gone and invested a ton of money in digital channels like within the Microsoft ecosystem or Google or Apple, or I could have considered the sports side of things. And what was interesting at the time in 2022 was that app platforms were very conservative and restrictive to crypto advertising. And as a result of it, a lot of brands ended up just default choosing sports marketing as an entry into different markets. But the reality is I still think that there's a bigger and better bang for your buck in sports marketing than there is in just a pure paid ads digital media buy through one of the digital platforms.
And is there something specifically appealing about Formula 1? I mean, not just you all, but like a lot of new emerging technology tech companies have moved into F1 space. What's so appealing about F1?
I think it's the one sport where you have a great consumer penetration, but you can also enable really amazing, fruitful B2B experiences and bring some of your top clients, your top partners. They're with you for the weekend, they're immersing in the sport, there's excitement, and that enables a lot of fruitful conversations between enterprises. So, it's the one venue which touches millions of consumers and you get great deal flow.
Yeah, I've actually heard stories about people doing an F1 sponsorship just to get into the paddock and talk to other people business-wise. I guess like what's the environment like in there during race weekend? Is business being done? Is business being talked about? What is that environment like?
Oh, I think the business is absolutely being done and I think Formula 1 has done a great job. Look, let's give credit where credit is due. We shopped around the entire grid and I don't think there is a principal like Zak Brown. Zak Brown is an incredible business guy and he really is great at bringing partners together. So, yes, there's absolutely business being done in the paddock and I give all the credit to Zak to enable that environment, bring all the partners in. You know, when you're a company like ours and you're growing very rapidly, we're now the second largest exchange in the world, we're the second largest venue for derivatives trading in the world, and you probably saw our recent deal with ICE. Now, what most of the world doesn't know is that the way this deal came around is a simple introduction from Zak Brown to Jeff Sprecher and a few months later we have an incredible deal that benefits both these companies.
Mhm. Mhm. And I guess McLaren's place in Formula 1 has changed a lot since 2022, kind of midfield, maybe even toward the back of the pack, now two-time constructors' champions. Does that change the nature of your sponsorship or anything about that deal?
Look, the value creation is incredible. We didn't want to bet on just the team, we wanted to bet on the growth story. And I grew up watching the sport as a young kid and I had a lot of familiarity with the sport. So, for me as being in charge of bringing this brand at a global stage, I wanted to bet on things that I knew incredibly well or at least I felt I knew them. I was very familiar with McLaren's heritage. You look at some of the driver lineup in the past, they've got some of the best drivers. You look at Ayrton Senna, Mika Häkkinen, David Coulthard, Pablo Montoya. These are incredible drivers and they've have their own independent legacy so to speak. So, when we started shopping around it was abundantly clear to us that McLaren had a comeback story just ahead of them. But, we needed to be patient. We needed to invest in them. We needed to believe in them and ride that wave and it's magical when it happens. And in our case, there was a bit of luck. There was a bit of calculation. And I think largely intuition that led us to this point.
And with sort of experiential type marketing spends, I think the question is how to measure the impact of that. Are there specific things you can point to that says, 'Hey, working with McLaren for the past few years has benefited OKX in this specific way?'
Absolutely. Look, our business has grown tremendously over the years. And as McLaren has grown, we've gone into new markets and we've achieved licenses in these markets. So, we now are licensed in Singapore, in UAE. We have a registration in Turkey. We're licensed in Australia. We have an operation in the United States. So, as the sport grew, our business grew. And the way we evaluate the ROI, the impact of our efforts is a couple of ways. One is we look at the traditional digital metrics. We of course naturally look at our social reach increasing over a period of time, especially during big spike seasons like Miami, Abu Dhabi, Singapore. These are big venues and they draw a lot of audience back into our app, into our social properties. We look at the overall impressions. But, most importantly, the thing that really gives us validation is when we go to conferences, when we're sitting in a partner meeting, when we're talking to our customers, and we ask them the question how they get exposed to us. It's amazing to hear how much of an impact McLaren has had on people and as a result, our reputation.
Is it still at this point about educating people or at, you know, a few years on, do you feel like more people know about it, maybe not OKX specifically, but crypto, crypto exchanges, I guess like what is the primary second step after people have awareness of what OKX is?
I think over the last 3 years, crypto has become such an undeniable part of our culture. You look at I believe not last year, but the year before when President Trump got elected, one can argue that the outcome of the election, crypto industry had a huge impact and role to play in it. So, you look at now the decentralized prediction markets like Polymarket, these markets are able to predict real-time events. So, I would argue that now crypto and blockchains are such an embedded part of our culture that they move the needle in many parts of our life and people are less curious about the education. They're now familiar with it and they're trying to figure out how to experience it. When you look at a platform like ours, our mission is we want to modernize markets. This is why we've done a partnership with ICE and New York Stock Exchange. We're going to bring most of the equities and commodities on chain so they're available 24/7. That's the modernization of current Wall Street. Then we want to modernize money. And we think that with stable coins, with self-custody wallets, people can move money around more freely, more independently, with more control. So, I think this is going to be the tremendous transformation the crypto industry brings. People are past the education stage, and they're now in the how do I experience it, how do I onboard and use it in my daily life.
Is there something different about selling OKX now when, you know, I feel like a few years ago crypto, crypto exchanges, even like NFTs was like the really buzzy thing everyone was talking about. Now, of course, AI, everyone is going crazy for AI, even these prediction markets. So, I feel like what the new hot technology is maybe has changed, but you guys are still, you know, doing crypto and crypto exchange. I guess like has that changed how you think about selling to people?
Absolutely. So, one of the connotations we're moving away from very strategically is we don't want to be classified as a crypto exchange. That was true 5, 6 years ago. You look back 4 years ago, we ended up introducing a self-custody wallet product. At the time, people scratched their heads. And they said, 'You can't monetize this product. Why would you dilute your core business?' But, we knew that was the right thing for us to do, and we wanted to expand our identity. If you go back to the rebrand, OKEX versus OKX, there was a reason behind we got rid of the E. The E signified an exchange. The X signified a cross platform. So, as you look forward, OKX does not want to classify itself as a company that will touch people's lives when it comes to investments and when it comes to interacting with money.
Got it. Got it. So, I guess that's kind of like following the trends of where user enthusiasm is and what they want to spend their time doing.
It's true. I got into markets through a 401k account, maybe through my first employer. If you look at a typical 20-year-old or 22-year-old, their experience in experiencing investment markets not through 401k's, not through Fidelity or a brokerage account. They're experiencing it through self-custody platforms, maybe through prediction markets, or maybe through DEX markets. So, it's a very different sort of generation for them. Entering crypto is very native. And I would argue as you look 5 years from now, what will enable the commerce and the money economy around AI tooling? I would argue that the fiat systems are not programmable, not as programmable as crypto, and crypto is now going to find its ultimate use case with AI. And we're building a lot of AI tools. We've released a few products over the last 2 months, and I think we're going to continue to create sandboxes for developers. But, these are great achievements for crypto. Modernize markets, modernize money, enable AI commerce. These are great opportunities.
Got it. And specifically with McLaren and F1 partnership, I know in 2021 you did like digital collectibles with them. Again, at the time when digital collectibles seemed like they were going everywhere. I guess what did you guys learn from that venture and the connection between, you know, the blockchain technology and the fan community that McLaren's trying to build?
Well, the first thing we tried to do differently is we knew that there was a lot of speculation and irresponsible behavior in the NFT marketplaces. We did not want to do that, and we especially did not want to subject our great brand partners with that either. So, we made our NFTs free as long as people came in, they accessed the wallet, created an account, we issued that NFT to that particular fan. Now, the cool thing about that NFT is that's a digital artifact you have in your wallet. It's yours. It's in a self-custody environment, so no one can take it away from you. And if you're a big fan, like I am, that's a memory you want to keep, and not going to lose it either. Because if you have a baseball card, you lose it, it's gone. In the case of NFTs, it's forever yours.
