Mijem Newcomm Tech Inc. (MJEM:CSE), a Canadian social media company, is coming for Facebook Marketplace and Kijiji with its growing app. Established in 2014, the technology company offers a buy-and-sell marketplace aimed at Generation Z students in the United States and Canada. The company’s growth slowed during the pandemic when many campuses switched to remote learning. While college and university campus activity slowed down, Mijem took the opportunity to build new features in its app and subsequently completed its IPO in January 2022.
Hybrid Tuition Scholarship
As tuition costs and student debts rise, Mijem has launched an unconventional tuition program. “We’re offering a scholarship giveaway that combines dollars and cryptocurrency. The winner will receive $5,000—half of it in dollars and the other half in Bitcoin SV (BSV),” Laurie Freudenberg, chief executive officer, shared in an interview with Streetwise Reports.
Cryptocurrency reward programs are gaining in popularity. Shake Shack announced a Bitcoin rewards program to attract younger customers earlier this year.
With an approximate market value of $1.5 billion US, BSV may not be as well known as cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), or Dogecoin (DOGE).
“BSV is perfect for this scholarship giveaway because it has a lower environmental impact than other cryptocurrencies, which is important to Gen Z,” Freudenberg shared in an interview.
The resource impact of cryptocurrencies has been controversial in recent years. Business Insider has estimated that mining Bitcoin produces an estimated 40 billion pounds of carbon emissions. In comparison, Google Cloud produced approximately 1,322,773 pounds of carbon emissions.
The company offers two scholarships in its contest: one to students based in the United States and one to students in Canada. Announced in April 2022, the deadline to apply for the scholarship is June 13. To qualify for the contest, students must meet the eligibility criteria and be starting or returning to college or university in the summer or fall of 2022.
Loyalty Program With Cryptocurrency
In addition, the business has a loyalty program to encourage transactions with cryptocurrency. “For every $1 US transacted through Mijem’s platform, the loyalty program rewards both the buyer and the seller with 1 point each. The points can be converted at the user’s option to Bitcoin SV (BSV) and deposited into their integrated digital wallet,” Freudenberg explained.
The business charges a transaction fee of 12.5% on each transaction made through the platform. 10.5% percent of the fee goes to the company as revenue, with the remainder of the fee funding the company’s loyalty program.
Cryptocurrency reward programs are gaining in popularity. Shake Shack announced a Bitcoin rewards program to attract younger customers earlier this year. In addition, several credit cards offer cryptocurrency rewards in the US, including BlockFi Rewards Visa Signature Card and the Gemini Credit Card.
Helping Students Buy and Sell
Mijem’s core business offering is a buy-and-sell marketplace for students. “The most popular item sold on the platform is textbooks. It’s a huge expense for students, even in a digital world,” Freudenberg commented. Other popular items in the market include electronics, clothing, and household goods.
Mijem earns revenue by charging a transaction fee on each sale completed on the platform. The app itself is free for students to download. App users can make payments through the app or pay outside the app.
Debt and Affordability Concerns Drive Interest In Mijem
Every dollar saved by using Mijem means less debt for Gen Z. That’s significant because of the high level of student debt. According to the Federal Reserve, the average college debt is $32,731. In contrast, the National Association of Colleges and Employers found that the average college graduate's starting salary is $55,260.
Mijem also helps users list and find sub-leases for apartments. That capability is significant because rent prices have risen to historic highs in many cities. For example, the average rent for a one-bedroom apartment in New York is $3,450, a 38% increase compared to the previous year.
In Toronto, Canada’s largest city, low vacancy rents contribute to higher rents. In the first quarter of 2022, the average rent for a one-bedroom apartment in Toronto was $2,145, a year-over-year increase of 17.8%. These economic pressures may be expected to drive students to seek ways to save money by using services like Mijem.
Building a Community App Experience
There is a limit to how often students will buy and sell textbooks, furnishings, and other products. Mijem has invested in adding additional community features to maintain and grow user engagement.
Mijem has significant growth potential. Today, the company has 91 Canadian schools (i.e., about 33% of Canadian post-secondary institutions) and 1419 American schools (i.e., 36% of American institutions) with users on the app. The three largest schools by users are the University of Buffalo, the University of Waterloo, and Wilfrid Laurier University.
While the company has focused on students, the company does not require a school email address to sign up. Users can join several communities, including urban areas (e.g., the Toronto community) and academic-based communities (e.g., the University of Toronto).
Business Model
Seasonality is a significant factor in the Mijem business model. “App usage often increases at certain times of the year like August and September when students return to school,” Freudenberg commented. The seasonality trend is driven by students seeking housing, buying textbooks for courses, and equipping their accommodations.
Maintaining student engagement and app activity levels during off-peak periods such as June and July is a challenge for the company’s business model. However, this limitation may be partially mitigated by the growing popularity of the summer semester and Mijem’s loyalty program.
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Disclosures
1) Bruce Harpham compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee. They or members of their household own securities of the following companies mentioned in the article: None. They or members of their household are paid by the following companies mentioned in this article: None. Their company has a financial relationship with the following companies referred to in this article: None.
2) As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Mijem Newcomm Tech Inc. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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