Fintech, open banking and beyond

Today startups present new ways of processing payments, raising funds and borrowing money. Yet, for the first time, the services offered are not an enhancement of traditional banking services but can efficiently replace them, threatening the main financial institutions. In 2017, the total transaction value in the fintech market amounted to $3,300,958m, with the “digital payments” segment accounting for most of it.

We explore further. 

Cryptocurrency and ICOs: a guide

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Cryptocurrency – especially bitcoin – has been a hot topic for some time now.

At the time of writing, the price of one bitcoin (BTC) is $4365.96 with a market cap of $72,171,392,631. This time last year it was trading at $583 with a market cap of $9,228,619,466.

In August 2015, the total market cap for all cryptocurrencies was $4,492,434,387. Exactly a year later, it was $11,560,008,512.

Today there are 865 different cryptocurrencies listed on CoinMarketCap.com, with a total market capitalisation of $160,726,893,022.

The numbers are impressive.

Today, the majority of the market is made up from a few major coins: bitcoin, ethereum, ripple and litecoin.

But recently, the number of cryptocurrencies available have been on the rise. And this is due to an increasingly popular way to raise funds for cryptocurrency projects and blockchain-based startups: ICOs – which we’re going to explain here.

(If you have some questions about how bitcoin actually works, this Washington Post guide is quite handy).

What is an ICO?

ICOs (Initial Coin Offerings) have become a popular way to fund cryptocurrency projects. An ICO occurs when a new cryptocurrency project sells part of its cryptocurrency tokens to early adopters and enthusiasts in exchange for money today.

ICOs provide a way for cryptocurrency project creators to raise money for their operations. Most ICOs raise money in bitcoin or other cryptocurrencies.

This is used to fund the early stages of development and other operational expenses the founders have. Investors in these token sales are betting that the value of the token will rise to above the ICO price, once the token is developed and starts gaining traction from users.

As a model, it’s attractive; it allows the founders to fund their project without having to give away equity and it also creates early liquidity for their network.

And it’s a big deal. The money raised for blockchain-based startups via these token sales has surpassed early stage venture capital funding for the year. To date, in 2017, there have been 92 ICOs, raising $1.25 billion collectively.

The rise of these ICO’s have not been met without uncertainty and speculation. The U.S. Securities and Exchange Commission (SEC) announced in July that the sale of new digital coins may need to be regulated by the country’s securities laws. The regulatory environment is uncertain, and the hype around cryptocurrency assets continues to rise. Investing in ICO’s is not for the faint of heart and it can be quite difficult to sort out the winning opportunities from the projects that are out-right scams.

Separating the wheat from the chaff

It may be hard to navigate the waters of the ever-increasing amount of coins lined up for ICOs, but there are a few key ways to determine if a token is worth your time. When analysing new coin offerings it is important to begin by looking at a few elements:

Team

  • There should be biographies of the founders and team members on the project’s landing/marketing page; if there isn’t this is a huge red flag.

  • Find them on LinkedIn, look at their past job history

  • Have they been in crypto very long? or are they brand new to this and looking to cash in on the ICO game?

Marketing

  • Is their website professional? It looks bad for a team that’s about to raise millions of dollars to have a low-grade Wordpress site

  • Is there a Slack channel? Are they active in forums and talking about the tech?

  • Are they active on social media and engaging future users?

The token

  • How is the white paper? Is it barebones and a few pages, or is there substance behind it?

  • How big is the market of users for the coin? Is this something you would pay to use?

  • Is the value of the token necessary and not being offered by an already existing medium?

How much they are raising

  • It is common to see rounds of $5 - $10 million; anything above this raises eyebrows
  • What is the funding going towards? If they only need 25% of the proposed funding $10m for marketing efforts ($2.5m), then it really does not make sense for them to raise $100m. What would they do with all that extra unnecessary money? Uncapped raises like this only make sense for ICOs going towards investment vehicles or funds

If you’d like a more in-depth listing of KPIs when analysing new ICOs, take a look at this due diligence framework from Earlybird VC’s Alexander Lange. The evaluation framework was crowdsourced from an interdisciplinary group of crypto enthusiasts, developers, entrepreneurs, researchers and investors.

Cryptocurrency is relatively new territory for everyone, making it an interesting space to watch and interact with. We’re looking forward to seeing how it evolves.

Welcome to Tech City

Ten years ago, the start of the credit crunch changed the world as we know it.

It sparked an astonishing set of events, from which repercussions are still being felt.

The resulting recession pushed down rents across London, affecting less developed areas most. At the same time, there was a growing excitement about the potential of technology to transform the way we live.

The result?

A collection of startups with interesting ideas congregating in the same part of London within walking distance of the City – specifically East London’s Shoreditch and Old Street areas, now known as Tech City or Silicon Roundabout.

The wave of disruption had begun.

An impressive experiment

Soon after, a series of major developments enhanced the disruption being generated. In 2010, the UK government made a significant commitment to accelerate the growth coming out of this slice of London. In 2012, Google’s Campus London building opened. 2014 was the first London Tech Week – a celebration of technology in the capital, with Silicon Roundabout at its heart.

After San Francisco and New York City, today London has become the world’s third largest technology startup hub. It takes the best of creativity and fuses it with business acumen and a laser-like focus on solving the problems at hand.

Of course, Silicon Roundabout’s impact isn’t limited to London. It’s inspired startup clusters across the UK, from Cambridge to Edinburgh to Bristol and beyond.

But what sets it apart is its geographical proximity to the UK’s academic, financial and political spheres. It’s this that has galvanised powerful players from these worlds get involved in Tech City’s prospects and effect change.

A contagious buzz

Despite having evolved considerably since its early days, Tech City has retained its buzz. There’s a truly collaborative spirit with like-minded individuals coming together to hash out ideas, find opportunities to accelerate their business’ impact and establish partnerships.

Its independent coffee shops are filled with people plugged into MacBooks, its restaurants are meeting rooms, its bars play host to networking drinks.

And this all takes place against an aesthetically industrial backdrop. Through disruption, East London has retained industrial purpose – it’s just redefined that purpose.

Tech Connect

For us, like many others in the startup ecosystem, simply being a part of this is exciting. The atmosphere is electric and conversations burst with possibility.

It’s why we thrive on introducing people to this world. We know that the impact of our Connect Sessions lasts well beyond the day, week or even month of the event. Even though each session is unique, the common outtake is the stream of ideas generated by participants, and the conversations it sparks between startups, investors and corporations.

Disruption is inevitable but we believe this presents possibilities, not threats. It’s why our mission is to embrace the disruption.