Startups on Blockchain are the Next Big Thing

Six Reasons Why Startups on Blockchain is the Next Big Thing

August 22, 2018

Looking for an industry with an untapped potential on blockchain? It might be closer than you think.

Helping startups grow is a large global market. It is called crowdfunding: entrepreneurs raise funds by pre-selling their future product. If the idea is cool and resonates with the public, the authors collect enough funds to launch the product. However, it is still severely under served and is confined by embarrassing & archaic restrictions.

A crowdfunding platform that kicked off back in 2012, Boomstarter.Network is now aiming to disrupt this market with blockchain technology, cryptocurrencies, and even mining tools. Boomstarter has already garnered investment from a hedge fund that earlier bought Telegram and Dropbox. The fintech team is leveraging the emerging technology to break the geographical limits and remove intermediaries.

We’ve put together important data points to explore how this bold plan just might work and gain value for startups and investors alike. Let’s roll!

Size of crowdfunding market is huge

There are millions of current and potential entrepreneurs in the world willing to make their dreams true by validating their idea through pre-sale. If the product is great, the pre-sale will bring funds to develop the product. The current total volume of crowdfunding exceeds 6.5 billion dollars.

Global crowdfunding is ripe for disruption

Crowdfunding was growing rapidly: in 2017 it increased by 49% globally. However, projections for the following years show a steady slowdown. Obviously, the expected decline is due to a number of limiting factors. The demand from startups cannot be satisfied with the traditional platforms which are infamous for geographical restrictions and slow transactions.

Erasing geographical limits will skyrocket market growth

Existing crowdfunding platforms are estimated to be serving a mere one-third of the world’s startups. One of the busiest platforms, Kickstarter, only allows entrepreneurs from 22 industrialized countries. With cryptocurrencies, crowdfunding will be effective, quick and borderless. This will surge demand and participation by startups from all over the world.

Removing intermediaries will help startups thrive 

A dreaded meltdown factor of the existing crowdfunding world is waiting time for startups to receive the money from their backers. Startups wait for weeks and often cannot get the funds in time to begin developing their product according to their plan. It happens over and over again because the current system is overly dependent on third parties like banks or payment systems.

Using blockchain, smart contracts and crypto act as a medium for startups and backers to interact will reduce transaction time to minutes and guarantee payments with no intermediaries involved.

Crypto-mining as a tool driving engagement

While introducing an all-crypto platform, Boomstarter.Network says it has a plan for those who are not yet into digital currencies. The fintech company claims to offer tools to contribute cryptocurrencies to the projects by interested sponsors. The idea is to unite supporters of a given startup in a cloud-mining pool so that the amount of crypto they generate all together becomes substantial.

This is a pioneering non-material way to support startups, solving the common issue when people don’t buy, but only repost a startup’s offer on their social media. For startups, it is an interesting tool for building an active and motivated community. 

Good competition to disrupt the market with blockchain

There are other teams out there that aim to address the grievances of this expanding market. However, none of them have shown an integrated solution which also takes care of the vast audiences that have not yet embraced crypto.

With this in mind, Boomstarter.Network seems uniquely positioned to garner a big share of the global market just waiting to be disrupted. The company’s token, designed to be used as a means of payment on the platform, performs as a practical representation of value. It will be deployed to build real businesses that serve real purposes.

By providing universally accessible tools to help startups grow wherever they are, it is possible to boost demand and traction for wider adoption. This will bring positive movement to the token’s price, drawing in more entrepreneurs, supporters, and investors.

Source: https://ambcrypto.com/six-reasons-why-startups-on-blockchain-is-the-next-big-thing/

Startups celebrate as funding boom returns

Starting with the Flipkart-Walmart deal, 2018 is turning out to be the best ever for startups in attracting capital since the funding boom on 2014-15

Mihir Dalal & Anirban Sen from LiveMint.com  August 6, 2018

Caption:

At least 12 mega funding rounds are in the works at Oyo, Byju’s, Swiggy, Zomato, ShareChat and BigBasket. Graphic: Mint

Bengaluru: Startups have been raising multiple rounds of capital in quick succession at increasingly higher valuations. Investors are chasing startups that don’t generate any revenue—at least not yet—and market share is the preferred investment metric, not unit economics. Is another hyper-funding wave around the corner for startups?

Increasingly, this year is resembling 2014, when a handful of relatively mature startups raised huge sums. That year was followed by a broader hyper-funding wave in 2015 when it seemed that all you needed to raise cash was a degree from a top engineering college and the word “hyperlocal”, which was the flavour of the day then, in your investor pitch.

Investors have already struck 18 deals of $100 million or more this year compared with 22 last year, according to Tracxn data. At least a dozen more such deals including mega funding rounds at Oyo, Byju’s, Swiggy and Zomato, ShareChat, BigBasket and others are in the works, according to previous reports in Mint. Factor in the $16 billion sale of Flipkart to Walmart and it’s clear that this will be the best-ever year for startups in terms of attracting capital, a stark contrast to the weak investment activity in the last two years.

The jury is out on whether this bumper year will be followed by an investment frenzy similar to that of 2015.

But there are some early signs. startups such as Swiggy, Zomato and CureFit are attracting large rounds of cash in quick succession and at soaring valuations. Investors are chasing content startups that have no business model in sight. And, in some sectors such as food ordering, startups are spending wantonly on discounts, advertising and free product deliveries, though still not at the levels seen in 2015.

“While the ecosystem of companies has grown, the number of quality startups in the later stages has not grown at the same pace,” said Sharad Sharma, an angel investor and co-founder of iSpirt, an industry group for software products startups. “As a result, investors have fewer mid- to late-stage companies to back and double down on. Other than the category leaders, the ones that have just managed to survive but haven’t really taken off in a big way are also getting funded in the current wave. So, in mid- to late-stage deals, we’re definitely starting to see the beginning of a bubble.”

Mint had reported on 20 March that start-up funding may bounce back this year.

To be sure, it’s not clear if investor enthusiasm for mature internet companies will trickle down to early-stage startups. Funding for early-stage startups is at its lowest in four years, Tracxn data shows. And many investors have raised concerns about the low rate of new start-up formation.

Some investors said VCs and startups had learned from their mistakes in 2014-15 and it is unlikely that a bubble-type scenario would be repeated this time.

“The environment is very different from (that in) 2014-15,” said Ritesh Banglani, partner, Stellaris Venture Partners. “First, there is clear evidence of exitability of Indian internet companies. Second, companies that are raising large rounds are mostly market leaders who have proven the benefits of scale. Third, companies like Swiggy and Zomato that are raising big rounds have demonstrated good unit economics. So, most growth-stage funding is going towards building scale rather than proving business models, which was the case in 2014-15.”

Dev Khare, partner at Lightspeed India, agreed, saying that unlike 2014-15, VCs haven’t poured excessive funds in early-stage companies and neither have late-stage funds made bets on early-stage companies.

“Many investors had come in earlier during 2014-15 than they otherwise would, and a lot of sectors got overfunded,” Khare said. “Now, the market has matured and you’re seeing one or two winners emerge in several sectors. In India, capital accumulates around the winners pretty quickly, so I would expect more sectors to get funded in the growth rounds than in 2014-15.”

In the 2014-15 startup investment boom, Tiger Global made a series of early-stage bets, a move that gave rise to the term, Fear of Missing Out (FOMO), among other investors, who followed Tiger Global’s lead. Both Khare and Banglani said that so far, the FOMO factor isn’t at play. (While Tiger Global has stepped up its investment pace over the past nine months, it is avoiding early-stage firms). “What I would see as a sign of froth would be if international investors were coming in during A rounds and signing $10 million cheques and investing in seven-eight companies in each sector. I don’t see that happening right now,” said Khare.

Source:

https://www.livemint.com/Companies/AwQXjpeeSI1A5BALJb7s6H/Startups-celebrate-as-funding-boom-returns.html

Traditional VC Funding Disrupted by Token Equity

This Berlin Startup is Disrupting Traditional VC Funding Through Tokenized Equity

Article from Rebecca Campbell at NewsBTC.com
July 30, 2018

Traditional venture capital (VC) funding is often plagued with long and complicated processes, making it difficult for company founders to connect with investors.

For one company, that is creating the world’s first decentralized stock exchange in conjunction with Binance and the Malta Stock Exchange, it doesn’t have to be that way. Berlin-based Neufund is an Ethereum-based protocol for securities’ tokenization and issuance. It allows any type of financial asset to be tokenized and liquidized. It’s also aiming to bring disruption to the traditional VC markets.

Speaking to NewsBTC, Zoe Adamovicz, CEO and co-founder of Neufund, knows firsthand how hard it is to find and close investments. As an experienced entrepreneur and angel investor, Adamovicz decided to found Neufund with fellow founder and CTO, Marcin Rudolf, to allow startups, small and medium-sized businesses, and established companies to legally issue a new concept of asset ownership: tokenised equity.

Under German jurisdiction, the platform provides organisations with a legal and technical framework to conduct fully legal and safe equity token offerings (ETOs). Disrupting traditional VC funding, Neufund is doing things faster, easier, and bringing the necessary liquidity needed.

“We are a team of regulatory and blockchain experts, on a mission to change the way projects are funded,” Adamovicz said. “Our ultimate goal is to open creativity for good. We want to empower people all around the world, making it possible for them to pursue their projects and dreams.”

Neufund has announced the first six companies that will be conducting their ETOs with them: Brille24, an eyewear pioneer, Uniti, a Swedish electric car startup, Next Big Thing, a startup incubator for the Internet of Things (IoT) and blockchain ventures, mySwooop, an omni-channel re-commerce platform that buys and sells new and used electronics, Blockstate, a company creating products for the future of finance, and Emflux Motors, an electric superbike company.

It is these ETOs that are looked at as offering a new era of legal and secure ICOs. According to Neufund, equity tokens, serving as equity instruments, empower those with limited investing capital to use fractional ownership as a means of investing.

According to Adamovicz, a form of universal token that is able to represent real-world business will replace utility tokens as investment instruments. She believes it is only then that “the investor’s and issuer’s incentives can be aligned and economic models can be mathematically consistent.”

She adds that ordinary shares will be replaced with some form of programmable shares or technologically enhanced shares. Consequently, she believes that “security tokens will replace both the shares used in today’s financial world, and the utility tokens used in ICOs.”

Creating the First Decentralized Stock Exchange

Earlier this month, the equity fundraising platform announced that it was collaborating with MSX, an innovation vehicle of the Malta Stock Exchange, and Binance, one of the world’s largest cryptocurrency exchanges.

The aim is to create a regulated and decentralised global stock exchange for listing and trading tokenised securities alongside of crypto assets. With market equity tokens projected to reach $1 trillion by 2020, the partnerships will make it possible for companies to trade their equity in a legally-binding way on the biggest crypto exchange in the world, said Adamovicz. She adds that liquidity is one of the major values of equity tokens versus traditional investment assets.

“We aim to bring access to [an] international community of investors gathered around Binance, and thanks to MSE all trades will be secured with proper licenses,” she said.

Source:
https://www.newsbtc.com/2018/07/30/this-berlin-startup-is-disrupting-traditional-vc-funding-through-tokenised-equity/

Canada Venture Capital 2018 Q2

Canada Venture Capital 2018 Q2

PwC and CB Insights' Q2'18 Canadian MoneyTree report highlights the latest trends in venture capital funding in Canada.

REPORT HIGHLIGHTS:
FINANCING TO CANADIAN COMPANIES DECLINES FROM RECORD Q1’18 HIGHS
Total funding to Canadian companies decreased 7%, with $900M invested across 116 deals.

SEED-STAGE DEAL ACTIVITY INCREASES, EXPANSION AND LATER-STAGE DECLINES
Seed-stage deal share increased to 32% in Q2’18 after declining for three quarters in a row. Early, expansion, and later-stage deals all declined as a percentage of Q2’18 deals.

CANADIAN IOT COMPANIES SEE INCREASED FUNDING AND DEALS IN Q2’18
Investment in Canadian AI companies jumped to $169M in Q2’18, an increase of 104% over Q1. The sector recorded 13 deals in Q2’18.

Source: https://www.cbinsights.com/research/report/canada-venture-capital-q2-2018/

Blockchain Startup Gamedex Raises $800,000

Seed Round to Build Platform for Digital Collectible Card Games like Pokemon

SINGAPORE, July 16, 2018 /PRNewswire/ --

Gamedex just raised $800,000 in a seed round led by Invictus Capital in order to build a Steam-like platform for blockchain-powered digital collectible cards and digital collectible card games like Pokemon, Hearthstone, Magic: The Gathering, and FIFA Ultimate Team. The global gaming market was worth 110 billion USD in 2017 and is projected to continue growing at a compounded annual growth rate of 6.2%.

In one of the first token seed rounds ever completed, investors purchased Gamedex tokens ("GDX tokens") instead of equity. Invictus Capital led the round, investing via their Hyperion fund. The Hyperion fund is a tokenized venture capital fund which prides itself on investing in the most talented entrepreneurs and visionaries in the blockchain industry.

Gamedex will not be selling any more GDX tokens until at least August.

Daniel Schwartzkopff, CEO of Cayman-based Invictus Capital, explained their rationale: "Digital Assets were a $35 billion market in 2017 and the cryptocurrency market has -- at times -- neared $1 trillion. The fact is, for all that blockchain is in the news, its biggest consumer use case is still untapped. I expect the nascent non-currency crypto-collectibles market to reach $100 billion by 2022."

This vision appears to be shared in Silicon Valley. With their investment into Gamedex, Invictus Capital joins the likes of Union Square Ventures and Andreessen Horowitz, who have both invested heavily in the crypto-collectibles space.

Individual angel investors who have made large investments in the crypto-collectible space include Fred Ehrsam, Co-founder of Coinbase, Naval Ravikant, Co-founder of AngelList, and Mark Pincus, Co-founder of Zynga.

Gamedex Co-founder and CEO Cameron Garvie added, "I believe that ecosystems which rely on a community to function should belong to the community they are built on, and we aim to do just that. We chose to bring Daniel and his team over at Invictus into our seed round due to their deep expertise and wealth of connections in the industry."

Gamedex is planning a public GDX token sale for late 2018.

https://gamedex.co/