• Skip to content
  • Skip to primary sidebar
  • Skip to footer

Blockchain Interchange

Over the last year, blockchain has evolved from an obscure concept to a mainstream corporate tool. From energy management to billing, Blockchain will eventually touch everything.

Finance

How students are founding, funding and joining startups

February 9, 2019 by Blockchain Interchange Leave a Comment

Shawn Xu Contributor
Share on Twitter

Shawn Xu is a managing partner at The Dorm Room Fund.

There has never been a better time to start, join or fund a startup as a student. 

Young founders who want to start companies while still in school have an increasing number of resources to tap into that exist just for them. Students that want to learn how to build companies can apply to an increasing number of fast-track programs that allow them to gain valuable early stage operating experience. The energy around student entrepreneurship today is incredible. I’ve been immersed in this community as an investor and adviser for some time now, and to say the least, I’m continually blown away by what the next generation of innovators are dreaming up (from Analytical Space’s global data relay service for satellites to Brooklinen’s reinvention of the luxury bed).

Bill Gates in 1973

First, let’s look at student founders and why they’re important. Student entrepreneurs have long been an important foundation of the startup ecosystem. Many students wrestle with how best to learn while in school —some students learn best through lectures, while more entrepreneurial students like author Julian Docks find it best to leave the classroom altogether and build a business instead.

Indeed, some of our most iconic founders are Microsoft’s Bill Gates and Facebook’s Mark Zuckerberg, both student entrepreneurs who launched their startups at Harvard and then dropped out to build their companies into major tech giants. A sample of the current generation of marquee companies founded on college campuses include Snap at Stanford ($29B valuation at IPO), Warby Parker at Wharton (~$2B valuation), Rent The Runway at HBS (~$1B valuation), and Brex at Stanford (~$1B valuation).

Some of today’s most celebrated tech leaders built their first ventures while in school — even if some student startups fail, the critical first-time founder experience is an invaluable education in how to build great companies. Perhaps the best example of this that I could find is Drew Houston at Dropbox (~$9B valuation at IPO), who previously founded an edtech startup at MIT that, in his words, provided a: “great introduction to the wild world of starting companies.”

Student founders are everywhere, but the highest concentration of venture-backed student founders can be found at just 5 universities. Based on venture fund portfolio data from the last six years,Harvard, Stanford, MIT, UPenn, and UC Berkeley have produced the highest number of student-founded companies that went on to raise $1 million or more in seed capital. Some prospective students will even enroll in a university specifically for its reputation of churning out great entrepreneurs. This is not to say that great companies are not being built out of other universities, nor does it mean students can’t find resources outside a select number of schools. As you can see later in this essay, there are a number of new ways students all around the country can tap into the startup ecosystem. For further reading, PitchBook produces an excellent report each year that tracks where all entrepreneurs earned their undergraduate degrees.

Student founders have a number of new media resources to turn to. New email newsletters focused on student entrepreneurship like Justine and Olivia Moore’s Accelerated and Kyle Robertson’s StartU offer new channels for young founders to reach large audiences. Justine and Olivia, the minds behind Accelerated, have a lot of street cred— they launched Stanford’s on-campus incubator Cardinal Ventures before landing as investors at CRV.

StartU goes above and beyond to be a resource to founders they profile by helping to connect them with investors (they’re active at 12 universities), and run a podcast hosted by their Editor-in-Chief Johnny Hammond that is top notch. My bet is that traditional media will point a larger spotlight at student entrepreneurship going forward.

New pools of capital are also available that are specifically for student founders. There are four categories that I call special attention to:

  • University-affiliated accelerator programs
  • University-affiliated angel networks
  • Professional venture funds investing at specific universities
  • Professional venture funds investing through student scouts

While it is difficult to estimate exactly how much capital has been deployed by each, there is no denying that there has been an explosion in the number of programs that address the pre-seed phase. A sample of the programs available at the Top 5 universities listed above are in the graphic below — listing every resource at every university would be difficult as there are so many.

One alumni-centric fund to highlight is the Alumni Ventures Group, which pools LP capital from alumni at specific universities, then launches individual venture funds that invest in founders connected to those universities (e.g. students, alumni, professors, etc.). Through this model, they’ve deployed more than $200M per year! Another highlight has been student scout programs — which vary in the degree of autonomy and capital invested — but essentially empower students to identify and fund high-potential student-founded companies for their parent venture funds. On campuses with a large concentration of student founders, it is not uncommon to find student scouts from as many as 12 different venture funds actively sourcing deals (as is made clear from David Tao’s analysis at UC Berkeley).

Investment Team at Rough Draft Ventures

In my opinion, the two institutions that have the most expansive line of sight into the student entrepreneurship landscape are First Round’s Dorm Room Fund and General Catalyst’s Rough Draft Ventures. Since 2012, these two funds have operated a nationwide network of student scouts that have invested $20K — $25K checks into companies founded by student entrepreneurs at 40+ universities. “Scout” is a loose term and doesn’t do it justice — the student investors at these two funds are almost entirely autonomous, have built their own platform services to support portfolio companies, and have launched programs to incubate companies built by female founders and founders of color. Another student-run fund worth noting that has reach beyond a single region is Contrary Capital, which raised $2.2M last year. They do a particularly great job of reaching founders at a diverse set of schools — their network of student scouts are active at 45 universities and have spoken with 3,000 founders per year since getting started. Contrary is also testing out what they describe as a “YC for university-based founders”. In their first cohort, 100% of their companies raised a pre-seed round after Contrary’s demo day. Another even more recently launched organization is The MBA Fund, which caters to founders from the business schools at Harvard, Wharton, and Stanford. While super exciting, these two funds only launched very recently and manage portfolios that are not large enough for analysis just yet.

Over the last few months, I’ve collected and cross-referenced publicly available data from both Dorm Room Fund and Rough Draft Ventures to assess the state of student entrepreneurship in the United States. Companies were pulled from each fund’s portfolio page, then checked against Crunchbase for amount raised, accelerator participation, and other metrics. If you’d like to sift through the data yourself, feel free to ping me — my email can be found at the end of this article. To be clear, this does not represent the full scope of investment activity at either fund — many companies in the portfolios of both funds remain confidential and unlisted for good reasons (e.g. startups working in stealth). In fact, the In addition, data for early stage companies is notoriously variable in quality, even with Crunchbase. You should read these insights as directional only, given the debatable confidence interval. Still, the data is still interesting and give good indicators for the health of student entrepreneurship today.

Dorm Room Fund and Rough Draft Ventures have invested in 230+ student-founded companies that have gone on to raise nearly $1 billion in follow on capital. These funds have invested in a diverse range of companies, from govtech (e.g. mark43, raised $77M+ and FiscalNote, raised $50M+) to space tech (e.g. Capella Space, raised ~$34M). Several portfolio companies have had successful exits, such as crypto startup Distributed Systems (acquired by Coinbase) and social networking startup tbh (acquired by Facebook). While it is too early to evaluate the success of these funds on a returns basis (both were launched just 6 years ago), we can get a sense of success by evaluating the rates by which portfolio companies raise additional capital. Taken together, 34% of DRF and RDV companies in our data set have raised $1 million or more in seed capital. For a rough comparison, CB Insights cites that 40% of YC companies and 48% of Techstars companies successfully raise follow on capital (defined as anything above $750K). Certainly within the ballpark!

Source: Crunchbase

Dorm Room Fund and Rough Draft Ventures companies in our data set have an 11–12% rate of survivorship to Series A. As a benchmark, a previous partner at Y Combinator shared that 20% of their accelerator companies raise Series A capital (YC declined to share the official figure, but it’s likely a stat that is increasing given their new Series A support programs. For further reading, check out YC’s reflection on what they’ve learned about helping their companies raise Series A funding). In any case, DRF and RDV’s numbers should be taken with a grain of salt, as the average age of their portfolio companies is very low and raising Series A rounds generally takes time. Ultimately, it is clear that DRF and RDV are active in the earlier (and riskier) phases of the startup journey.

Dorm Room Fund and Rough Draft Ventures send 18–25% of their portfolio companies to Y Combinator or Techstars. Given YC’s 1.5% acceptance rate as reported in Fortune, this is quite significant! Internally, these two funds offer founders an opportunity to participate in mock interviews with YC and Techstars alumni, as well as tap into their communities for peer support (e.g. advice on pitch decks and application content). As a result, Dorm Room Fund and Rough Draft Ventures regularly send cohorts of founders to these prestigious accelerator programs. Based on our data set, 17–20% of DRF and RDV companies that attend one of these accelerators end up raising Series A venture financing.

Source: Crunchbase

Dorm Room Fund and Rough Draft Ventures don’t invest in the same companies. When we take a deeper look at one specific ecosystem where these two funds have been equally active over the last several years — Boston — we actually see that the degree of investment overlap for companies that have raised $1M+ seed rounds sits at 26%. This suggests that these funds are either a) seeing different dealflow or b) have widely different investment decision-making.

Source: Crunchbase

Dorm Room Fund and Rough Draft Ventures should not just be measured by a returns-basis today, as it’s too early. I hypothesize that DRF and RDV are actually encouraging more entrepreneurial activity in the ecosystem (more students decide to start companies while in school) as well as improving long-term founder outcomes amongst students they touch (portfolio founders build bigger and more successful companies later in their careers). As more students start companies, there’s likely a positive feedback loop where there’s increasing peer pressure to start a company or lean on friends for founder support (e.g. feedback, advice, etc).Both of these subjects warrant additional study, but it’s likely too early to conduct these analyses today.

Dorm Room Fund and Rough Draft Ventures have impressive alumni that you will want to track. 1 in 4 alumni partners are founders, and 29% of these founder alumni have raised $1M+ seed rounds for their companies. These include Anjney Midha’s augmented reality startup Ubiquity6 (raised $37M+), Shubham Goel’s investor-focused CRM startup Affinity (raised $13M+), Bruno Faviero’s AI security software startup Synapse (raised $6M+), Amanda Bradford’s dating app The League (raised $2M+), and Dillon Chen’s blockchain startup Commonwealth Labs (raised $1.7M). It makes sense to me that alumni from these communities that decide to start companies have an advantage over their peers — they know what good companies look like and they can tap into powerful networks of young talent / experienced investors.

Beyond Dorm Room Fund and Rough Draft Ventures, some venture capital firms focus on incubation for student-founded startups. Credit should first be given to Lightspeed for producing the amazing Summer Fellows bootcamp experience for promising student founders — after all, Pinterest was built there! Jeremy Liew gives a good overview of the program through his sit-down interview with Afterbox’s Zack Banack. Based on a study they conducted last year, 40% of Lightspeed Summer Fellows alumni are currently active founders. Pear Ventures also has an impressive summer incubator program where 85% of its companies successfully complete a fundraise. Index Ventures is the latest to build an incubator program for student founders, and even accepts founders who want to work on an idea part-time while completing a summer internship.

Let’s now look at students who want to join a startup before founding one. Venture funds have historically looked to tap students for talent, and are expanding the engagement lifecycle. The longest running programs include Kleiner Perkins’ class=”m_1196721721246259147gmail-markup–strong m_1196721721246259147gmail-markup–p-strong”> KP Fellows and True Ventures’ TEC Fellows, which focus on placing the next generation’s most promising product managers, engineers, and designers into the portfolio companies of their parent venture funds.

There’s also the secretive Greylock X, a referral-based hand-picked group of the best student engineers in Silicon Valley (among their impressive alumni are founders like Yasyf Mohamedali and Joe Kahn, the folks behind First Round-backed Karuna Health). As these programs have matured, these firms have recognized the long-run value of engaging the alumni of their programs.

More and more alumni are “coming back” to the parent funds as entrepreneurs, like KP Fellow Dylan Field of Figma (and is also hosting a KP Fellow, closing a full circle loop!). Based on their latest data, 10% of KP Fellows alumni are founders — that’s a lot given the fact that their community has grown to 500! This helps explain why Kleiner Perkins has created a structured path to receive $100K in seed funding to companies founded by KP Fellow alumni. It looks like venture funds are beginning to invest in student programs as part of their larger platform strategy, which can have a real impact over the long term (for further reading, see this analysis of platform strategy outcomes by USV’s Bethany Crystal).

KP Fellows in San Francisco

Venture funds are doubling down on student talent engagement — in just the last 18 months, 4 funds have launched student programs. It’s encouraging to see new funds follow in the footsteps of First Round, General Catalyst, Kleiner Perkins, Greylock, and Lightspeed. In 2017, Accel launched their Accel Scholars program to engage top talent at UC Berkeley and Stanford. In 2018, we saw 8VC Fellows, NEA Next, and Floodgate Insiders all launch, targeting elite universities outside of Silicon Valley. Y Combinator implemented Early Decision, which allows student founders to apply one batch early to help with academic scheduling. Most recently, at the start of 2019, First Round launched the Graduate Fund (staffed by Dorm Room Fund alumni) to invest in founders who are recent graduates or young alumni.

Given more time, I’d love to study the rates by which student founders start another company following investments from student scout funds, as well as whether or not they’re more successful in those ventures. In any case, this is an escalation in the number of venture funds that have started to get serious about engaging students — both for talent and dealflow.

Student entrepreneurship 2.0 is here. There are more structured paths to success for students interested in starting or joining a startup. Founders have more opportunities to garner press, seek advice, raise capital, and more. Venture funds are increasingly leveraging students to help improve the three F’s — finding, funding, and fixing. In my personal view, I believe it is becoming more and more important for venture funds to gain mindshare amongst the next generation of founders and operators early, while still in school.

I can’t wait to see what’s next for student entrepreneurship in 2019. If you’re interested in digging in deeper (I’m human — I’m sure I haven’t covered everything related to student entrepreneurship here) or learning more about how you can start or join a startup while still in school, shoot me a note at sxu@dormroomfund.com. A massive thanks to Phin Barnes, Rei Wang, Chauncey Hamilton, Peter Boyce, Natalie Bartlett, Denali Tietjen, Eric Tarczynski, Will Robbins, Jasmine Kriston, Alicia Lau, Johnny Hammond, Bruno Faviero, Athena Kan, Shohini Gupta, Alex Immerman, Albert Dong, Phillip Hua-Bon-Hoa, and Trevor Sookraj for your incredible encouragement, support, and insight during the writing of this essay.

Read more: https://techcrunch.com/2019/02/06/how-students-are-founding-funding-and-joining-startups/

Filed Under: Blockchain Tagged With: Accel, Accel Scholars, Alumni Ventures Group, Amanda Bradford, Artificial Intelligence, bill gates, Boston, coinbase, CRM, CrunchBase, distributed systems, Dorm Room Fund, Drew Houston, Dropbox, editor-in-chief, Energy, entrepreneurship, facebook, Finance, FiscalNote, Forward, General Catalyst, Graduate Fund, greylock, harvard, Jeremy Liew, Kleiner Perkins, lightspeed, Mark Zuckerberg, MIT, Pear Ventures, peter boyce, Pinterest, Private Equity, Series A, stanford, Start-Up Chile, Startup company, TechStars, True Ventures, Ubiquity6, uc-berkeley, United States, upenn, Venture Capital, venture capital Firms, Warby Parker, Y Combinator

Japans Society 5.0 initiative is a roadmap for todays entrepreneurs

February 5, 2019 by Blockchain Interchange Leave a Comment

Mark Minevich Contributor
Share on Twitter

Mark Minevich is a digital fellow at IPSoft.

Japan, still suffering the consequences of its ‘Lost Decade’ of economic stagnation, is eyeing a transformation more radical than any the industrialized world has ever seen.

Boldly identified as “Society 5.0” Japan describes its initiative as a purposeful effort to create a new social contract and economic model by fully incorporating the technological innovations of the fourth industrial revolution. It envisions embedding these innovations into every corner of its ageing society. Underpinning this effort is a mandate for sustainability, bound tightly to the new United Nations global goals, the SDG’s. Japan wants to create, in its own words, a ‘super-smart’ society, and one that will serve as a roadmap for the rest of the world.

Japan hosts its first ever G20 summit in 2019 and this grand initiative will be on the agenda at the official B20 (Business 20) summit headed by the chairman of Hitachi .

Components of Society 5.0 and its implications for the US

Society 5.0 addresses a number of key pillars: infrastructure, finance tech, healthcare, logistics, and of course AI. The markets being grown in Japan are impressive. In robotics they predict $87 billion in investments and the IoT market is poised to hit $6 Billion in 2019

This means we are behind. We have not put enough focus on what AI can do not only for industry, but what it can do to move society forward and solve many of our most pervasive problems.

It isn’t just a problem of lack of investment by the United States government. Just this past September the Department of Defense announced a commitment of  $2 billion over the next five years toward new programs advancing artificial intelligence. This issue lies in the lack of a complete partnership between the United States Government and the private sector. But, why is Japan in the lead?

Full Fledged Embrace of AI and Cutting Edge Technology

Along with $1.44 billion from the government for AI funding, the Innovation Network Corp. of Japan is reorganizing to focus on AI and big data. They are projected to grow to $4 billion and operate to at least 2034. Much like in Britain and France, the government has made it a point to team with the private sector to move all of society forward.

Fresh Ideas to address Persistent Societal Problems

Along with the governmental and private partnership, Society 5.0 harnesses AI to address problems that continue to plague society. They are looking at how AI can help with the trappings of an aging population, pollution, and most importantly, how create such a sweeping initiate that is also agile enough to adjust to constant change of society everyday.

The goal of the work being done at Hitachi now on Society 5.0 is to create a Human-Centered Society. Technologies and innovations need to be leveraged to aid humans and our advancement, not to replace us in anyway.

How do American Technologists Close the Gap and partner with Japan?

First, in Silicon valley and beyond, American technologists and entrepreneurs must create a partnership between themselves and the U.S. government. Only when working together can we reach our full potential.

Take the British government as a model. This past April they announced a that it had put together “an AI deal worth more than £1 billion” that includes public and private funding.

France sees the opportunity and is betting on AI as well. This past spring President Emmanuel Macron announced an AI plan that includes $1.6 billion in funding, new research centers, data-sharing initiatives. The road has been clearly mapped for the U.S., just follow the path.

Next, American technologists and entrepreneurs must focus on certain industries and their ability to improve society in its entirety. There are 4 major industries technologists and entrepreneurs can focus on, and disrupt by modeling Japan’s Society 5.0 ideas and approach.

Healthcare

Japan’s society is more heavily weighted towards people over 60 than the rest of the world. In turn, more healthcare is needed to support people for a longer period of time as people live longer.

American technologists and entrepreneurs can capitalize by investing in and developing cognitive AI technologies that will greatly lessen the time needed to complete administrative tasks to allowing medical professionals to concentrate more on actually providing healthcare.

A UK  report suggests approximately 10% of NHS operational expenses could be saved through AI and automation. If this can be mirrored and then improved in the US the rising cost of healthcare, and declining public health can be tackled simultaneously.

Mobility

While the population in urban centers is growing, rural areas are being left with diminished access to everyday needs like, transportation, stores, hospitals, and community centers.
Continue to invest and develop autonomous vehicles, drones and single-driver cargo truck convoys. Access to basic everyday needs will not be a given for those residing far from urban centers. Here lies another dual opportunity for technologists and entrepreneurs, service those in need while simultaneously moving tech and society forward.

Infrastructure

28 percent of major U.S. roads are rated “poor” or in need of a complete rebuild. AI and other technologies such as robots, drones, sensors and IoT will help solve these problems. How? If only 10 percent of cars in the  U.S. became self-driving, those 26 million vehicles would generate 38.4 zettabytes of data annually.  In one year that would create over eight times the volume of the world’s current data.

Not only must we increase investment in autonomous vehicles, but we must make a concerted effort to leverage the data they will produce. Technologists and entrepreneurs will have an unprecedented advantage to leverage this data to predict everything from needs of infrastructure improvements to all bridges and roads being used by the autonomous vehicles. Companies like Hitachi are the ones you should look to work with. They’re doing amazing things in infrastructure today. How can this be translated to the U.S.? That is a question for you to ask and ultimately solve.

Mass transit is far ahead in Japan as well. Japan’s maglev train set a world record speed of 375 mph. With vast expanses of the United States landscape, and the ever growing challenges of flying, the rail transport industry is ripe for the picking. Plans for the midwest and the west coast have seem to come and go. What will be the plan that actually works?

Fintech

Blockchain is a  solution that will advance security, transparency and fraud prevention in society. Cognitive AI is producing results towards the goals of Society 5.0, ether it be a cashless society or a consumer focused one. Voice prompted AI assistants are currently providing consumer support by depositing money, performing trades, mastering trading platforms, networking, and onboarding of customers. This Omni-channel integration will result in finance and banking evolving to grow around customers needs. With this evolution we will see far less needs for cash and brick and mortar banks.

In the end, data alone is just code without meaning to its user. But, when technologists and entrepreneurs implement AI to its max potential a true difference will be seen. In Society 5.0, humanity and machines will solve the greatest issues society faces in the 21st century. We must embrace what Japan is creating with Society 5.0, or we will simply become a vestige of the technological past.

Read more: https://techcrunch.com/2019/02/02/japans-society-5-0-initiative-is-a-roadmap-for-todays-entrepreneurs/

Filed Under: Blockchain Tagged With: articles, Artificial Intelligence, Banking, big data, chairman, department of defense, Emerging-Technologies, Emmanuel Macron, entrepreneurship, Finance, Forward, france, g20, healthcare, hitachi, Internet of Things, Japan, NHS, self-driving car, U.S. government, United Kingdom, United Nations, United States, west coast

2019 looks to continue another lights-out year for fintech startups

January 6, 2019 by Blockchain Interchange Leave a Comment

Dana Stalder Contributor

Dana Stalder is a general partner at Matrix Partners and invests in fintech, consumer marketplaces and enterprise software.
More posts by this contributor

  • Financial technology startups emerged as serious challengers to financial services in 2017
  • New rules for hiring executive candidates

Allen Miller Contributor

Allen Miller is a venture captialist at Matrix Partners. He’s excited by bold entrepreneurs building great companies across categories, especially in fintech.
More posts by this contributor

  • Financial technology startups emerged as serious challengers to financial services in 2017

This time last year, the crypto bull market stole the spotlight. In the midst of bitcoin’s wild run, we announced the Matrix FinTech Index in recognition of the top 10 publicly traded U.S. fintechs quietly surpassing $100 billion in total market capitalization. We predicted that in 2018, the fintechs would prove to be the more relevant disruptors and their equity value would continue to outpace the incumbents.

As we look back, this prediction proved to be true. The market cap of the Matrix FinTech Index grew 50 percentage points in 2018, far outpacing the incumbent financial service giants and the S&P 500. Looking ahead to 2019, we predict that the fintechs will continue to steal the show — creating innovative tech-enabled products, providing access to underserved demographics and putting consumers first.

The FinTech Index continues to outperform in 2018, though volatility has increased

In this 2018 year-end edition of the Matrix FinTech Index[1], we are excited to provide a refreshed view of last year’s index. As a quick reminder, the index is a market-cap weighted index that tracks the progress of a portfolio of 10 leading public fintech companies. For comparison, we also included another portfolio of 10 large financial services incumbents (companies like JP Morgan and Visa), as well as the S&P 500. In 2018, the total market cap of the top 10 publicly traded U.S. fintechs grew to nearly $170 billion and the two-year returns of the fintechs are now at 133 percent — 100 percentage points higher than the two-year returns for the incumbents.

Definition: Matrix Partners considers “fintechs” to be venture-backed organizations that are (a) technology-first companies that leverage software to compete with traditional financial services institutions (e.g. banks, credit card networks, insurers, etc.) in the delivery of traditional financial services (e.g. lending, payments, investing, etc.) or (b) software tools that better enable traditional finance functions (e.g. accounting, point-of-sales systems, etc.).

Compared to 2017, volatility increased in 2018. While part of this is the broader state of the equity markets in 2018, it’s worth noting a few specific headwinds (e.g. the TIO security breach that impacted PayPal, Amazon launching Amazon Pay), as well as a few general macro concerns like rising interest rates. But looking ahead to 2019, all 10 of the publicly traded fintechs are expected to continue to have double-digit growth. The only incumbents expected to squeak into double-digit territory in 2019 are card issuers like Visa (11 percent) and Mastercard (13 percent) — enabled, in part, by the growth of fintech payment companies like Square and PayPal.

2019 Prediction: The Matrix FinTech Index will deliver 200 percent returns over the three years ending in December of 2019, outperforming the incumbents and S&P 500 by at least 150 percentage points.

Liquidity is starting to trickle in for private fintech companies

While the FinTech Index performed well on the public markets in 2018, we also saw some very promising liquidity events for privately held companies. In 2017, there were only three fintech exits in the U.S. over $100 million, totaling just over $700 million in value. In 2018, that number grew by a factor of 10 to over $7 billion in value. More than half of that value came from the GreenSky IPO, but there were also a number of significant M&A events. We expect M&A activity to increase as financial services incumbents acquire fintech companies in an effort to stay competitive. And we continue to believe that the fintech sector will prove to be one of the most fruitful sectors for venture returns in the 15 years following the 2008 financial crisis.

2019 Prediction: Total aggregate value for fintech liquidity events will exceed $10 billion in one year for the first time ever.

The fintech unicorn pipeline is primed for some big outcomes

What’s even more exciting than 2018’s liquidity is the backlog of privately held fintechs, led by Stripe, that are valued at over $1 billion. There are now 20 fintech unicorns. In fact, there are more fintech unicorns than any other industry vertical in the Unicorn Club. More than 50 percent of these raised big growth rounds in 2018 and five of them (Circle, Plaid, Brex, Root and LendingHome) made their debut on the U.S. fintech unicorn list for the first time. The expansion of this list shows there is no shortage of high-potential areas to disrupt in financial services.

2019 Prediction: Total aggregate value for fintech unicorns will cross $90 billion and the total number of fintech unicorns will begin to close in on 30.

The next wave of value creation from younger fintechs will be even bigger than the first

Despite these successes on the public markets, in liquidity events and among the unicorn ranks, we are still in the very early innings of the fintech revolution. 2019 will be even more impressive than 2018 as there are an additional 40 U.S. fintechs that have raised more than $100 million in equity funding and are on the brink of entering the unicorn club. As many of these companies make that transition, they will sprout another wave of more interesting fintech companies as early employees go on to start their own companies in a virtuous wave of value creation.

We expect these newcomers, and others aspiring to follow in their footsteps, will threaten to end the rule of the financial establishment. They will continue to offer better financial products to consumers, empower more efficient payment channels and create a more open financial system. At the same time, the incumbents will continue to struggle with innovation, hamstrung by their scale, regulatory burdens and decades of accumulated technical debt.

Make no mistake. What new fintech companies are attempting is very ambitious and incredibly difficult to achieve. The existing ecosystem of incumbent providers dates back 150 years and represents some of the largest global financial institutions. That said, digital transformation is afoot and the financial service industry will not be spared.

Read more: https://techcrunch.com/2018/12/31/2019-looks-to-continue-another-lights-out-year-for-fintech-startups/

Filed Under: Bitcoin Tagged With: Amazon, economy, Finance, financial services, jp morgan, mastercard, money, PayPal, stripe, technology first, unicorn club, United States, visa

NYSE operators crypto project Bakkt brings in $182M

January 1, 2019 by Blockchain Interchange Leave a Comment

The Intercontinental Exchange’s (ICE) cryptocurrency project Bakkt celebrated New Year’s Eve with the announcement of a $182.5 million equity round from a slew of notable institutional investors. ICE, the operator of several global exchanges, including the New York Stock Exchange, established Bakkt to build a trading platform that enables consumers and institutions to buy, sell, store and spend digital assets.

This is Bakkt’s first institutional funding round; it was not a token sale. Participating in the round are Horizons Ventures, Microsoft’s venture capital arm (M12), Pantera Capital, Naspers’ fintech arm (PayU), Protocol Ventures, Boston Consulting Group, CMT Digital, Eagle Seven, Galaxy Digital, Goldfinch Partners and more.

Bakkt is currently seeking regulatory approval to launch a one-day physically delivered Bitcoin futures contract along with physical warehousing. The startup initially planned for a November 2018 launch, but confirmed this morning an earlier CoinDesk report that it was delaying the launch to “early 2019” as it awaits permission from the Commodity Futures Trading Commission. Along with the funding, crypto news blog The Block Crypto also reports Bakkt has hired Balaji Devarasetty, a former vice president at Vantiv, as its head technology.

ICE’s crypto project was first announced in August and is led by chief executive officer Kelly Loeffler, ICE’s long-time chief communications and marketing officer. Bakkt quickly inked partnerships with Microsoft, which provides cloud infrastructure to the service, and Starbucks, to develop “practical, trusted and regulated applications for consumers to convert their digital assets into U.S. dollars for use at Starbucks,” Starbucks vice president of payments Maria Smith said in a statement at the time.

Many Bitcoin startups floundered in 2018, despite record amounts of venture capital invested in the industry. This was as a result of failed initial coin offerings, an inability to scale following periods of rapid growth and the falling price of Bitcoin. Still, VCs remained bullish on Bitcoin and blockchain technology in 2018, funneling a total of $2.2 billion in U.S.-based crypto projects — a nearly 4x increase year-over-year. Around the globe, investment hit a high of $4.6 billion — a more than 4x increase from last year, according to PitchBook.

“Notably, 2018 was the most active year for crypto in its brief ten-year history,” Loeffler wrote. “This was evidenced by rising investment in distributed ledger technology and digital assets, as well as by blockchain network metrics such as daily bitcoin transaction value and active addresses. Yet, these milestones tend to be overshadowed by the more narrow focus on bitcoin’s price, which has been seen by some, as a proxy for the potential of the technology.”

Today, the price of Bitcoin is hovering around $3,700 one year after a historic run valued the cryptocurrency at roughly $20,000. The crash caused many to dismiss Bitcoin and its underlying technology, while others remained committed to the tech and its potential for complete financial disruption. A project like Bakkt, created in-house at a respected financial institution with support from noteworthy businesses, is a logical bet for crypto and traditional private investors alike.

“The path to developing new markets is rarely linear: progress tends to modulate between innovation, dismissal, reinvention, and, finally, acceptance,” Loeffler added. “Each step, whether part of discovery or adversity, ultimately strengthens the product. Twenty years ago, it was controversial to suggest that commodities or bonds could trade electronically on a screen, and many steps were required for that evolution to play out.”

As Bitcoin sinks, industry startups are forced to cut back

Read more: https://techcrunch.com/2018/12/31/nyse-operators-crypto-project-bakkt-brings-in-182m/

Filed Under: Blockchain Tagged With: bakkt, bitcoin, blockchain, chief, CoinDesk, commodity futures trading commission, cryptocurrencies, decentralization, digital currencies, economy, Finance, Horizons Ventures, money, Naspers, New Years Eve, Officer, pantera capital, starbucks, Venture Capital

Ohio becomes the first state to accept bitcoin for tax payments

November 26, 2018 by Blockchain Interchange Leave a Comment

Starting Monday, businesses in Ohio will be able to pay their taxes in bitcoin — making the state that’s high in the middle and round on both ends the first in the nation to accept cryptocurrency officially.

Companies who want to take part in the program simply need to go to OhioCrypto.com and register to pay whatever taxes their corporate hearts desire in crypto. It could be anything from cigarette sales taxes to employee withholding taxes, according to a report in The Wall Street Journal, which first noted the initiative.

The brain child of current Ohio state treasurer, Josh Mandel, the bitcoin program is intended to be a signal of the state’s broader ambitions to remake itself in a more tech-friendly image.

Already, Ohio has something of a technology hub forming in Columbus, Ohio, home to one of the largest venture capital funds in the midwest, Drive Capital . And Cleveland (the city once called “the mistake on the lake”) is trying to remake itself in cryptocurrency’s image with a new drive to rebrand the city as “Blockland”.

Whether anyone will look to take advantage of Ohio’s newfound embrace of digital currencies is debatable.

The cryptocurrency market is currently in the kind of free-fall (or collapse, or implosion, or conflagration, or all-consuming dumpster fire) that’s usually reserved for tulips in Holland in February 1637.

Bitcoin sinks below $4,000 as the crypto market takes another hefty beating

Other states around the country in the southeast, southwest and midwest also considered accepting bitcoin for taxes, but those initiatives in places like Arizona, Georgia, and Illinois never got past state legislatures.

The state is working with the cryptocurrency payment startup BitPay to handle its payments, which will convert the bitcoin to dollars.

Read more: https://techcrunch.com/2018/11/25/ohio-becomes-the-first-state-to-accept-bitcoin-for-tax-payments/

Filed Under: Bitcoin Tagged With: arizona, bitcoin, bitpay, Cleveland, Columbus, cryptocurrencies, digital currencies, Drive Capital, economy, Finance, illinois, money, Netherlands, Ohio, the wall street journal, venture capital funds

  • Page 1
  • Page 2
  • Page 3
  • …
  • Page 9
  • Next Page »

Primary Sidebar

QoinPro.com: Free Bitcoins every 24 hours
QoinPro.com: Free Bitcoins every 24 hours

Footer

  • About us
  • ANTI-SPAM POLICY
  • Blog
  • Contact us
  • Cookies Policy
  • Digital Millennium Copyright Act (DMCA) Notice
  • Earnings Disclaimer
  • Privacy Policy
  • Terms of Use
  • Twitter
  • Facebook
  • LinkedIn
  • Dribbble
  • Instagram

Copyright © 2019 · Parallax Pro on Genesis Framework · WordPress · Log in