Blockchain’s Wild Ride Is Far From Over
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It’s become somewhat of a cliché when prominent finance types say they can see a future for blockchain technology, but they’re not so sure about Bitcoin. Bitcoin is a cryptocurrency, and the blockchain is the technology that underpins it.
It’s a popular trope for a reason. In business, blockchain has the potential to trim costs, secure information efficiently, and remove middlemen. As my colleague Robert Hackett wrote in a 2017 feature, “Underneath the crypto-hysteria is a grand innovation in the humble realm of accounting.”
Today, my colleague Jeff John Roberts has two interesting stories out about how the blockchain can shake up the financial world. First, he interviews Alex Tapscott, the author of the best-selling book Blockchain Revolution.
Roberts spoke with him about how the world of blockchain and cryptocurrency have changed in the last several years. Here’s what Tapscott had to say about how the tech industry will use blockchain technology in the future, with parts bolded by me for emphasis.
“Let me start with this concept of digital landlords like Google and AliBaba, which are like the feudal landlords of the agrarian age. Just like in feudal times, we till the digital land and the most valuable asset, our data, goes to the landlord, and in exchange we get access to a few free services. This is a bargain we’ve entered without really appreciating the consequences, and I think people are just now starting to realize it wasn’t always the best trade.
Looking forward, the implications of tech companies embracing crypto are profound. On the positive side, there are many people who don’t have banking and credit. In many parts of the world, more people have access to a Facebook account than a bank account. If Facebook and others use crypto to give them an easy way to move cash, that’s a positive thing.
On the other hand, these companies are not accountable to citizens the way governments are in a democracy, and don’t always act with integrity. Initiatives such as Libra could have a destabilizing effect in many countries where the monetary and banking system is considered weak or unreliable. You’ll see some countries fighting back and, potentially, even outright banning this.”
Carlson-Wee wrote his 2012 college thesis on Bitcoin and joined Coinbase as its first employee. He appeared on the cover of Forbes in 2017, which read: “The craziest bubble ever.” He was riding high as Polychain reached $1 billion in assets under management in early 2018. Then everything crashed. Bitcoin soared to nearly $20,000 before it plummeted over 80 percent.
The profile delves into how Carlson-Wee survived the “craziest bubble ever” and what his second act entails. From the story:
Indeed, despite a gusher of money going into crypto companies, the blockchain future in some ways can seem as distant as it did when it became a buzzword four years ago. This has led tech watchers to look at the performance of investment funds, notably Polychain, to assess whether crypto is for real, and to point to the fund’s price swoons, including a 40% drop in the value of assets under management in 2018, to suggest it is not.
To those inside the world of crypto, this makes little sense. Says Chris Dixon, a partner at the VC firm Andreessen Horowitz, which is invested in Polychain and runs a crypto fund of its own, “The short term price movements are inevitable. Imagine if you had assets that correlated to AI or mobile phones,” he says. “That’s how these things play out—in a wild, volatile cycle. The only difference is crypto technologies have a specific price attached.”
As for Carlson-Wee It would not be unfair to say the financial establishment regards Carlson-Wee like Shakespeare’s Prince Hal: a charismatic but wayward figure who struggles to overcome youthful frivolity.
Carlson-Wee — and the rest of the world — are watching to see whether the crypto industry can transcend its subculture, survive multiple hype cycles, and burst onto the mainstream. Talk about a wild ride.
- Iterable, a San Francisco-based cross-channel growth marketing platform, raised $60 million in Series D funding. Viking Global Investors led the round, and was joined by investors including CRV, Index Ventures, Blue Cloud Ventures, Harmony Partners, and Stereo Capital.
- Zeus Living, a provider of furnished homes, raised $55 million in Series B funding. Investors include Airbnb, Comcast, CEAS Investments, TI Platform Management, Alumni Ventures Group, Initialized Capital, NFX, and Spike Ventures.
- Secure Code Warrior, an Australia-based secure coding company, raised $47.6 million in Series B funding. Goldman Sachs led the round, and was joined by investors including ForgePoint Capital, Cisco Investments, AirTree Ventures, and Paladin Capital Group.
- PrecisionHawk, a Raleigh, N.C.-based provider of drone technology for the enterprise, raised $32 million in funding. Investors include Third Point Ventures, Millennium Technology Value Partners, Clearsky, Senator, and Eastwood Capital Partners.
- Arcadia, a Washington-based clean energy startup, raised $30 million in Series C funding. G2VP led the round, and was joined by investors including Macquarie Group, Seek Ventures, Mitsui USA, Energy Impact Partners, BoxGroup, and ValueAct Spring Fund.
- Imply, a Burlingame, Calif.-based real-time analytics company, raised $30 million in funding. Andreessen Horowitz led the round, and was joined by investors including Geodesic Capital and Khosla Ventures.
- WhyHotel, a Washington D.C.-based alternative lodging service, raised $20 million in Series B funding. Harbert Growth Partners led the round, and was joined by investors including Camber Creek, Highland Capital Partners, Working Lab Capital, Geolo Capital and Revolution’s Rise of the Rest Seed Fund.
- Tines, a Dublin-based cybersecurity automation company, raised $11 million in Series A funding. Accel led the round, and was joined by investors including Index Ventures and Blossom Capital.
- Gtmhub, a Denver-based business success platform, raised $9 million in Series A funding. CRV led the round.
- SurvivorNet, a New York-based media platform that connects cancer researchers and clinicians, raised $3.5 million in Series B funding. Investors include Gatemore Ventures.
- Camino Financial, a Glendale, Calif.-based data-driven fintech platform focused on small business loans to Latinx businesses, raised $8 million in Series A funding. Crédito Real led the round.
- Mable, a Boston-based wholesale commerce platform for small businesses, raised $3.1 million in seed funding. Investors include Venrock, Accomplice, and Founder Collective.
- HypeLabs, a Portugal-based software-only mesh networking provider, raised $3 million in seed funding. Innogy Innovation Hub led the round, and was joined by investors including EDP Ventures, Deutsche Telekom, AngelPad, Caixa Capital, NovaBase Capital and Mustard Seed.
PRIVATE EQUITY DEALS
- Veronis Suhler Stevenson made an investment in Endo1, a Houston-based specialty dental services organization. Financial terms weren't disclosed.
- Mercer Global Advisors Inc, which is backed by Oak Hill Capital and Genstar Capital, acquired Republic Wealth Advisors LLC, a Houston-based wealth management firm. Financial terms weren't disclosed.
- Complete Health, a portfolio company of Pharos Capital Group, acquired Birmingham Internal Medicine Associates, a Birmingham, Ala.-based provider of specialized and expanded primary care services. Financial terms weren't disclosed.
- Shamrock Capital made an investment in Ad Results Media, a Houston-based audio and podcast advertising firm. Financial terms weren't disclosed.
- XP Investimentos SA, a Brazilian financial services firm, raised $1.96 billion in an IPO of 75 million shares (40% insider sold) priced at $27 apiece, above erange. The firm posted total revenue and income of $711 million in 2018 and net income of $111 million. General Atlantic backs the firm. It plans to list on the Nasdaq as “XP.” Read more.
- Bill.com, a Palo Alto-based SaaS platform for automated billing, says it plans to raise $176 million in an offering of 8.8 million shares priced at a range between $19 to $21. The firm posted revenue of $78.4 million and loss of $7.3 million in the year ending June 2019. DCM, August Capital, and Ossa Investments back the firm. It plans to list on the NYSE as “BILL.” Read more.
- Digital Colony Management, a digital infrastructure investment platform of Colony Capital Inc, acquired Highline, a Brazil-based infrastructure solutions provider for the telecommunications industry. The seller was Pátria Investments. Financial terms weren't disclosed.
FIRMS + FUNDS
- Piva, a San Francisco-based venture capital firm, raised $250 million for its debut fund.
- Pear, a Palo Alto, Calif.-based venture capital firm, raised $160 million for its new fund.
- Hyde Park Venture Partners, a Chicago and Indianapolis-based venture capital firm, raised $100 million for its third fund.
- Behrman Capital promoted Simon P. Lonergan to managing partner.
- General Atlantic promoted Lefei Sun to managing director, David Buckley to operating Partner, and Roger Gao and Raph Osnoss to principal.
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