Tag: economy

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Sardine raises $51.5M led by a16z to sniff out fishy fintech transactions

As fintechs become more efficient, so too do fraudsters.

“Faster instant payments mean faster fraud,” Sardine CEO and co-founder Soups Ranjan told TechCrunch. That’s the thesis behind his startup, which uses behavioral, financial and device-specific user data to detect fraud on behalf of its clients in the crypto and fintech industries.

Those conditions also mean a faster fundraising process for Sardine, evidently. The company announced it has raised $51.5 million in a Series B round led by Andreessen Horowitz’s (a16z’s) Growth Fund after closing $19.5 million for its Series A earlier this year. a16z was a new investor in the Series A, with the fintech-focused GP Angela Strange leading Sardine’s previous round and Growth Fund partner Alex Immerman taking the lead this time around.

The other Series B participants were a mix of new and existing investors including XYZ, Nyca Partners, Sound Ventures, Activant Capital, Visa, Google Ventures, Eric Schmidt, Vikram Pandit, The General Partnership, NAventures, ING Ventures, ConsenSys, Cross River Digital Ventures, Alloy Labs, and Uniswap Labs Ventures, according to the company.

Sardine has grown considerably since it announced the Series A back in February, growing its roster of clients from ~50 to ~135 today, Ranjan said. Its customers include crypto exchanges FTX and Blockchain.com as well as fintechs with broader mandates such as Wealthsimple and Digit, he added.

Sardine’s algorithm helps crypto and fintech companies detect fraud

After participating as one of ten startups in the FIS Fintech Accelerator program this summer, the startup is making a push into “core banking processes” and is in discussions with large banks in the U.S. and Europe, Ranjan said.

It’s easier to understand why a fintech or crypto startup might want to beef up its fraud prevention capabilities, but Ranjan explained that even for big banks, the standard KYC (“Know Your Customer”) compliance process isn’t equivalent to a fraud protection program. 90% of fraud detected on Sardine’s customers’ platforms comes from individuals who have already passed the KYC process, he said.

Sardine does have competition from other startups in the identity-verification space such as Socure, which told TechCrunch last year that it counts three of the top five global banks as customers. Socure, which counts Tiger Global as its lead investor, was valued at $4.5 billion during its last publicly announced fundraise in November 2021, a Series D round. Sardine didn’t share the valuation from its latest fundraise, but the startup is significantly earlier-stage than Socure.

Ranjan described Sardine’s differentiation in the market as stemming from his team’s experience and the company’s focus on fintechs in particular. Ranjan himself previously worked as Coinbase’s director of data science and risk and Revolut’s head of crypto, and the company’s head of banking partnerships came to the startup from Zelle.

Sardine co-founders Soups Ranjan, Zahid Shaikh and Aditya Goel

Sardine co-founders Aditya Goel, Soups Ranjan and Zahid Shaikh Image Credits: Sardine

“If you actually peek underneath the hood at any of these traditional fraud prevention vendors, you will find that the APIs don’t even have support for the identity of an individual, because they’re all built or designed for the e-commerce checkout experience,” Ranjan said. Rather than analyzing a customer’s shipping address and shopping cart, Sardine looks at device intelligence and behavioral biometric data that helps identify whether an individual engaging in a transaction is really who they say they are, he continued.

Another major differentiator for Sardine from competitors like Socure is its instant ACH and card onramp to crypto, which allows its customers to purchase over 30 different crypto assets instantly rather than having to wait the traditional few days to access their funds. It also offers direct fiat to NFT checkout in partnership with Tom Brady’s company, Autograph, and plans to expand that product to other NFT marketplaces, according to Ranjan.

Banks and card issuers typically use fraud detection algorithms for crypto that aren’t nearly granular enough, Ranjan said, meaning around half of the customers who attempt to transact using fiat-to-crypto onramps through traditional platforms are declined as fraudulent.

When Sardine launched its NFT checkout product in partnership with Autograph earlier this month, its conversion rate was much higher, around 98%, Ranjan said. It’s too early to tell if there are any chargebacks, or instances of fraud that went undetected, from that launch, he added, noting that Sardine is one of the first companies to even offer such instantaneous access to crypto through ACH.

“One of the reasons why folks haven’t dabbled or launched ACH to crypto, or even direct ACH to NFT, has been that there is no one [else] taking on the fraud risk liability,” Ranjan said. He declined to share details around the chargeback rates Sardine sees across its older products, but said that the platform allows customers to access some, but not all, of their crypto instantly.

“Sardine is taking on the fraud risk. [The transaction] typically settles into two-plus days, so for that period of time, we’re taking on the settlement risk, and we’re taking on the third-party fraud risk, as in, if somebody connects a stolen bank account,” Ranjan explained.

Venture capitalist Andrew Steele, who led Activant Capital’s investment in Sardine, thinks the company is uniquely positioned to assume and manage risk in a way that enables instant transactions.

“Identity and fraud are usually completely separate things,” Steele said. “We’ve invested in identity platforms. We’ve also invested in fraud platforms, and typically they’re completely separate. Identity to me is a moment in time. It’s when you onboard someone, it’s how you make sure that they are who they say they are. And then fraud is usually a transaction-based thing, but both are completely separate and siloed. Typically, that lack of connection means that you have limited data and you can’t really take on risk in the way we’re talking about [with Sardine].”

Sardine raises $51.5M led by a16z to sniff out fishy fintech transactions by Anita Ramaswamy originally published on TechCrunch

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Tres raises $7.6M to help web3 teams manage their financials and crypto data

Tres, a financial “data lake” for web3 companies, has raised $7.6 million in a seed round led by boldstart ventures, its founder and CEO Tal Zackon, exclusively shared with TechCrunch.

Investors include F2, The Chainsmokers’ venture fund Mantis, New Form Capital, Kenetic Capital, Blockdaemon Ventures and Alchemy. As well as angel investors like Fireblocks CEO Michael Shaulov and Chainalysis CEO Michael Gronager, among others.

The Tel Aviv-based firm aggregates crypto data across different wallets, accounts and platforms, so crypto entities’ financial teams can better understand what’s happening internally at their business without needing the crypto-native knowledge and experience to gather the information, Zackon said.

Its platform can onboard any on-chain or centralized finance data sources and enable financial workflows like balance calculations or auditing and reporting so businesses can monitor and manage their web3 assets both on-ramp and off-ramp, Zackon added. “The thing about having all the data related to your business in a data lake in a format that you need with raw data and financial data, there’s no need to manually gather the data, move it around, edit it and do calculations.”

“CFOs are really struggling to understand what is happening within their financial parameters because they didn’t grow up in this space, it’s different from traditional finance with new protocols and products coming up all the time,” Zackon said. “They don’t know how to handle it.”

The capital will be used to hire as well as build out its product, Zackon said. “I think today we’re really working on onboarding customers and developing the product for their needs and pains. The more we add, the deeper these use cases become and more use cases will open up.”

As it stands, there’s little technology or platforms out there to help web3 companies manage their finances, Zackon said. “They’re mainly using excel spreadsheets and block explorers like etherscan to manage thousands of their wallets, with hundreds to billions of dollars – manually — which is madness. That’s why we created this.”

“We’re able to go cross-chain, cross-protocol, cross wallet, on-chain and off-chain,” Zackon said. “Adding data whether it’s on Coinbase, Solana or somewhere else – all we need is your wallet address and we can pull all the transactions from all the wallets into one data lake. Something like that doesn’t exist today, you have to look at Ethereum data or Solana data one at a time. But on our platform you can look at it altogether and slice it how you want.”

To date, Tres has monitored and analyzed over $40 billion of crypto assets for customers like Hivemind Capital, non-custodial staking platform Stakely and blockchain infrastructure firm Blockdaemon across the US, Israel and Europe, its press release stated.

Although the current crypto market is wavering, the downturn and bearish sentiment is “actually a positive” for Tres, Zackon said.

“When everything is going up and everyone is making money, no one cares about finance,” Zackon said. “But when things start going sideways, you have to think about what you’re actually worth, how much runway you have, where the money is.”

At the end of the day, Tres hopes to become the “financial backbone” to crypto organizations, Zackon said.

Tres raises $7.6M to help web3 teams manage their financials and crypto data by Jacquelyn Melinek originally published on TechCrunch

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Sources say Web Summit Ventures will be a new $40M follow-on fund

Web Summit, one of the world’s largest events centered around technology startups, is to launch a brand new venture capital vehicle consisting of two new funds, TechCrunch understands. The move follows an acrimonious fall-out between Web Summit’s co-founders, who first started the now-defunct Amaranthine VC fund in 2018, in part to join the ballooning investment ecosystem which had grown up around the Web Summit events.

While it’s been previously reported that Web Summit cofounder, Paddy Cosgrave, will imminently launch his new vehicle, Web Summit Ventures (WSV), the nature and size of the fund has not, until now, been revealed.

TechCrunch understands that WSV will command $40 million in funding, split into two $20 million funds. They will be dubbed “Web Summit Ventures Seed” and “Web Summit Ventures Growth,” respectively . The Seed fund will invest at the early stage and Series A, while the Growth fund will invest at the ‘Series B and beyond’ stages. Both will be ‘follow-on’ funds and are not intended to lead funding rounds, say sources. This mirrors the previous Amaranthine strategy.

Further confirmation of the funds’ existence comes in the form of a new job posting advertising for a for an Associate for the fund.

It’s understood that WSV is intended to replace Cosgrave’s previous attempt to enter the investing game, after the Amaranthine Ventures vehicle ended up embroiled in a series of byzantine legal fights amongst its founders and partners.

As previously reported in the Irish media, documents filed in the Companies Registration Office in Dublin, Ireland, where Web Summit was originally launched, show that Cosgrave, Web Summit CEO, is listed as a director of the Web Summit Ventures Management Ltd.

It’s understood that only Cosgrave and Chris Murphy and will be partners in Web Summit Ventures. Murphy is a former Web Summit employee, who went on to work for the Amaranthine Fund for nearly three years as its Managing Director.

A well-placed source told TechCrunch that one of the main differences with the new WSV fund is that a number of tech founders will join as LPs, include some of the founders of Twitter, Tinder, N26, Checkout.com, Rappi, Algolia, Lightricks and Wise, along with a handful of GPs at some VC funds who said to be investing personally, although this has not been independently confirmed.

The story of Web Summit’s attempts to participate in the vast ecosystem of startups it was amassing begins in 2018.

The Amaranthine Fund was set up by Cosgrave, David Kelly, a Web Summit co-founder, and Patrick Murphy, a fund manager, in 2018. But while it managed to back, among others, Hopin (the online events startup, the valuation of which soared to $5.6 billion during the remote-working era of the pandemic) a series of bitter disagreements led to Cosgrave suing Kelly and Murphy in the US courts.

The $50 million Amaranthine fund has since rebranded at Tapestry after the lawsuits were filed.

But the acrimony is not just confined to the US.

Cosgrave is also suing Kelly in the Irish High Court. Kelly and Murphy deny the allegations, while Kelly is separately suing Cosgrave in the High Court over alleged minority shareholder oppression. Cosgrave denies the claims.

A spokeperson for Web Summit declined to comment on the launch of WSV, citing regulatory restrictions.

Sources say Web Summit Ventures will be a new $40M follow-on fund by Mike Butcher originally published on TechCrunch

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Sources say Web Summit Ventures will be a new $40M follow-on fund

Web Summit, one of the world’s largest events centered around technology startups, is to launch a brand new venture capital vehicle consisting of two new funds, TechCrunch understands. The move follows an acrimonious fall-out between Web Summit’s co-founders, who first started the now-defunct Amaranthine VC fund in 2018, in part to join the ballooning investment ecosystem which had grown up around the Web Summit events.

While it’s been previously reported that Web Summit cofounder, Paddy Cosgrave, will imminently launch his new vehicle, Web Summit Ventures (WSV), the nature and size of the fund has not, until now, been revealed.

TechCrunch understands that WSV will command $40 million in funding, split into two $20 million funds. They will be dubbed “Web Summit Ventures Seed” and “Web Summit Ventures Growth,” respectively . The Seed fund will invest at the early stage and Series A, while the Growth fund will invest at the ‘Series B and beyond’ stages. Both will be ‘follow-on’ funds and are not intended to lead funding rounds, say sources. This mirrors the previous Amaranthine strategy.

Further confirmation of the funds’ existence comes in the form of a new job posting advertising for a for an Associate for the fund.

It’s understood that WSV is intended to replace Cosgrave’s previous attempt to enter the investing game, after the Amaranthine Ventures vehicle ended up embroiled in a series of byzantine legal fights amongst its founders and partners.

As previously reported in the Irish media, documents filed in the Companies Registration Office in Dublin, Ireland, where Web Summit was originally launched, show that Cosgrave, Web Summit CEO, is listed as a director of the Web Summit Ventures Management Ltd.

It’s understood that only Cosgrave and Chris Murphy and will be partners in Web Summit Ventures. Murphy is a former Web Summit employee, who went on to work for the Amaranthine Fund for nearly three years as its Managing Director.

A well-placed source told TechCrunch that one of the main differences with the new WSV fund is that a number of tech founders will join as LPs, include some of the founders of Twitter, Tinder, N26, Checkout.com, Rappi, Algolia, Lightricks and Wise, along with a handful of GPs at some VC funds who said to be investing personally, although this has not been independently confirmed.

The story of Web Summit’s attempts to participate in the vast ecosystem of startups it was amassing begins in 2018.

The Amaranthine Fund was set up by Cosgrave, David Kelly, a Web Summit co-founder, and Patrick Murphy, a fund manager, in 2018. But while it managed to back, among others, Hopin (the online events startup, the valuation of which soared to $5.6 billion during the remote-working era of the pandemic) a series of bitter disagreements led to Cosgrave suing Kelly and Murphy in the US courts.

The $50 million Amaranthine fund has since rebranded at Tapestry after the lawsuits were filed.

But the acrimony is not just confined to the US.

Cosgrave is also suing Kelly in the Irish High Court. Kelly and Murphy deny the allegations, while Kelly is separately suing Cosgrave in the High Court over alleged minority shareholder oppression. Cosgrave denies the claims.

A spokeperson for Web Summit declined to comment on the launch of WSV, citing regulatory restrictions.

Sources say Web Summit Ventures will be a new $40M follow-on fund by Mike Butcher originally published on TechCrunch

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Retail tech startup Swiftly valued at $1B after bagging another $100M

Swiftly Systems entered unicorn territory after announcing today that it grabbed another round of $100 million, this time in a Series C. The new funding was led by BRV Capital Management.

If you’re feeling some déjà vu, you would be right: this is the second $100 million the retail technology company has raised in the past six months — and in a tough fundraising market, too. We covered Swiftly’s $100 million Series B back in March.

Much of the shopping technology focuses on e-commerce, but Swiftly’s technology taps into that online shopping experience to make shopping at a brick-and-mortar store just as engaging and easy. It also provides analytics and advertising, so that those stores can compete against e-commerce retailers using their operational strength without being disadvantaged by an aging or non-existing technology platform.

Earlier this year, we reported Swiftly was being used by hundreds of consumer brands in nearly 10,000 store locations, which accounted for more than $30 billion in gross merchandise volume.

To target the 200,000 brick-and-mortar food retailers in the U.S., the company went after additional capital that Sean Turner, chief technology officer at Swiftly, said via email will enable it to ensure that retailers “have the digital platforms necessary to both service their customers and gain new customers, as well as capitalize on the opportunity to gain their market share of the retail media revenues.”

“The speed and scale of the tools that are being deployed by the largest retailers requires a deep commitment and investment to democratize that technology to brick-and-mortar retailers worldwide,” Turner added. “To remain relevant, brick-and-mortar retailers need to natively boost their digital presence and lean into providing true omnichannel experiences for customers.”

The grocery industry’s shopping list: Inventory management, frictionless checkout, computer vision

Retail tech startup Swiftly valued at $1B after bagging another $100M by Christine Hall originally published on TechCrunch

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OurCrowd announces its new $200M Global Health Equity Fund

OurCrowd, the global crowdfunding venture firm, today announced its newest fund. As the organization announced at today’s Clinton Global Initiative event in New York, it is partnering with the WHO Foundation to launch its Global Health Equity Fund (GHEF), a $200 million fund that will focus on healthcare solutions that can have a global impact.

Even before the pandemic, OurCrowd had long invested in medical startups, but that only accelerated during the pandemic, and best I can tell, it has also become somewhat of a personal mission for the firm’s founder and CEO, Jon Medved. ”COVID-19 was a wake-up call for me as an investor,” said Medved. “The pandemic opened my eyes to health inequity around the world and reinforced the potential of innovative technology to save lives […] This new fund builds on that success with the explicit orientation of having impact. The collaboration with the WHO Foundation will allow us to identify even more exciting investments and facilitate the commitment of investors and entrepreneurs to equitable access to the technologies we support.”

While the fund’s focus is on healthcare, the management team is taking a wider view here that goes beyond startups in the medical field, including other areas that can also have a more indirect impact on health, such as energy and agriculture, for example.

OurCrowd is aligning its fund with the WHO Foundation’s Access Pledge. The idea here is to ensure that portfolio companies will make their solutions accessible to populations experiencing inequity. Specifically, this means any GHEF portfolio company will develop an Access Plan for their solutions and the WHO Foundation and OurCrowd will launch an advisory board to provide them with the assistance needed to do so. That’s not, after all, something that most startups are used to doing — and not necessarily something that most investment funds would want their companies to focus on. But especially in the healthcare space, this seems like the right thing to do.

“Despite clear models for successfully balancing economic return with equitable access, such as the provision of medicines for HIV and AIDS, the world failed to deliver solutions for COVID-19 to everyone, everywhere,” said WHO Foundation CEO Anil Soni. “It is imperative that we deploy solutions in response to that failure, including directing investment to innovation and aligning both to equity as a goal from the start.”

OurCrowd CEO Medved will lead the fund’s team together with OurCrowd Managing Partner Morris Laster and the firm’s team of clinical experts, with WHO Foundation’s Impact Investment Officer Geetha Tharmaratnam also providing support.

At this point, OurCrowd has invested in about 350 companies across its 39 funds for its more than 215,000 members, making it one of Israel’s most active investors. Some if its other healthcare-centric investments include Alpha Tau Medical, which focuses on treating solid malignant tumors, and BrainQ, a non-invasive technology to treat stroke and other neurological pathologies.

OurCrowd announces its new $200M Global Health Equity Fund by Frederic Lardinois originally published on TechCrunch

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Fintech app Portabl raises $2.5M to help consumers securely store financial data

Fintech Portabl announced the closing of a $2.5 million seed round today led by Harlem Capital Partners. Portabl, founded by Nate Soffio and Alex Yenkalov, also launches today.

It is a digital wallet and password manager for financial services and banking apps, but Soffio calls it a financial digital passport, which helps with user identification, making the task less cumbersome for both consumers and financial services. He said the company’s goal is to wean people from passwords, helping consumers obtain more ownership over their economic data by granting control over who can access it.

The app works like this: Portabl stores the information used to access existing financial apps. Every time an app is opened, a Portabl log-in will appear and, within two clicks, simply enable users to log in.

“We recognize the fact that if you’re a consumer, having a say over who has access to your identity and financial life has been historically confusing and cumbersome — at worst, adversarial and exclusionary,” Soffio told TechCrunch. “We believe that by enabling consumers to own their data, securely hold it, and share it for access or updates, that’s the right way to make good on a lot of the promises you hear about in open banking.”

Yenkalov noted the emergence of decentralized identifiers, verifiable credentials and zero-knowledge proofs, saying that the industry is closer than ever to enabling financial organizations to benefit from consumers owning and sharing their own data.

“In a way, by putting users in charge of their authentic data, Portabl is turning them into secure APIs of themselves,” he told TechCrunch. “This has enormous potential to transform consumer-provider interactions in the financial world. ”

Calling the fundraising journey “this sort of weird hopscotch situation,” Soffio said he started building the app early last year while attending the Wharton School of Business. In his spare time, he pitched competitions and accelerators. Eventually, he met Yenkalov, who helped him continue shaping the hypothesis of the app. Thanks to a series of warm introductions, the duo managed to start scraping together money and met with investors.

Soffio said Portabl chose Harlem Capital to lead the round after a call he’ll never forget: Yenkalov, a Ukrainian citizen, was trapped in the country as the war with Russia broke out in the middle of a fundraising call with the firm. Soffio remembers air raid sirens going off and said for the first few minutes of the call, the conversation was not about business but instead about finding a way to support Yenkalov’s escape from the country.

“It’s a VC firm, and their mission is to make great investments,” Soffio said. “They put all that aside and said, ‘Hey, this is a global crisis going on — what else can we do for you?’ For me, that was something to remember forever, frankly.”

Harlem Capital Partner Brandon Bryant said what initially drew the fund to Portabl was the idea that the verification of identity in fintech is still unsolved. “Their platform lets you as a consumer create your own identity credentials one time and bring them with you to every fintech application,” Bryant told TechCrunch. “We think this will be a big unlock for the industry.”

Carl Vogel, a partner at Sixth Man Ventures who also invested in Portabl’s seed round, expressed similar sentiments. He said the app “realized that creating user-owned financial identities can create enormous value for not only users but can also create a meaningful product and operational improvements for financial institutions.”

“What also excited us was that Portabl’s solution spans both traditional financial institutions and web3-native companies looking to securely onboard and maintain users,” Vogel continued. “We could not be more excited to partner with Portabl on their journey.”

Soffio said the company plans to use the money to help expand the team and accelerate its growth. It’s also working on its SOC2 and ISO/IEC 27001 security certifications (the former is a voluntary standard for managing consumer data while the latter is an international rubric for managing information) and is leaning into blockchain to grant consumers “bulletproof records of their data.”

As a child, Soffio learned the importance of verifiable identity information. He was born in Colombia and adopted by a Polish mother and a Puerto Rican father, who raised him in Stanford, Connecticut. He describes his neighborhood as primarily immigrant and said there was always an underlying fear and anxiousness about having proper documentation.

“I grew up witnessing various types of financial exclusion due to poverty, immigration, cash reliance, and a lot of anxiety around documentation and forming relationships with brick-and-mortar banks,” Soffio said. “Those are the things that keep otherwise good people locked out of using basic services.”

He studied anthropology during his undergraduate years at Yale and always planned to attend law school. His first job out of university was as a paralegal, where he was tasked with building databases, fostering his love for information-gathering. He then spent a decade working for various software and fintech startups, holding roles focused on product management fraud and anti-money laundering.

He soon realized the link between data management, identity issues and access to essential financial services. From there, he dropped everything, scrapped plans for law school, and went on the journey of learning about identity, naturally leading him to Wharton.

“Historically, lots of people have been left out of the system not because they’re bad, but because they’re hard to make sense of,” he said. “We want to make that a thing of the past by standardizing how both traditional and alternative data can be owned, shared and trusted.”

Fintech app Portabl raises $2.5M to help consumers securely store financial data by Dominic-Madori Davis originally published on TechCrunch

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‘Just break even’ may the worst possible advice for startups in turbulent times

Igor Ryabenkiy Contributor
Igor Ryabenkiy is a CEO and managing partner of AltaIR Capital.

The economic turbulence of the last two years has forced startups to look for new survival strategies. Today, startups generally fall into two camps: a minority that can afford to continue doing business as usual because they have a strong market position and a powerful financial base and the majority that is forced to adapt to ever-changing conditions.

Among the latter, there are two types:

  1. Those that are faring badly.
  2. Those that might soar but could just as easily plummet.

The venture market is not about achieving steady growth, and when a startup favors profits over ambition, the whole point of its existence is moot.

In these turbulent times, only a miracle could help the first type succeed. The second type, however, has every chance of not only surviving but thriving. This makes it critical for them to make the right strategic decisions now.

At this crucial juncture, the views of venture capital market leaders, mentors and experts carry greater weight, and many of them have publicly and unequivocally advised founders to lengthen their project’s runway and push it into the black. A significant number of companies have enthusiastically embraced this idea, but the sad truth is that, this is probably the worst possible advice for most startups right now.

One of the most interesting companies in our portfolio almost fell victim to this advice. A mentor advised the founder to lengthen their runway as much as possible. We looked at how they would have accomplished this and discovered that the proposed cost-saving measures would have practically destroyed growth. At that point, the project would have not been of interest to anyone. Why?

‘Just break even’ may the worst possible advice for startups in turbulent times by Ram Iyer originally published on TechCrunch

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Institutions investing in crypto haven’t ‘wavered one inch,’ LMAX CEO says

Institutions are unbothered by crypto assets continuing to trade far below all-time highs, LMAX Group CEO David Mercer told TechCrunch.

Even though the total crypto market capitalization has fallen from over $2 trillion at the beginning of the year to about $1 trillion today, institutional investors “haven’t wavered one inch,” Mercer said.

“It hasn’t gone backward,” Mercer said. After the chaos surrounding crypto lending platforms like Celsius and BlockFi and the collapse of the Terra LUNA ecosystem in May, everyone expected institutions to retract their engagement, Mercer said.

But institutional engagement today is the same as last year, and “may even be better,” Mercer commented. Institutions are moving ahead, he added. “The herd is inching forward.”

In 2018, the company launched LMAX Digital, an institutional cryptocurrency exchange. “[When we launched] we asked 35 banks if they wanted to trade this product and have market data, they said no,” Mercer said. “Today, 14 of those 35 take our market data.”

Institutions investing in crypto haven’t ‘wavered one inch,’ LMAX CEO says by Jacquelyn Melinek originally published on TechCrunch

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Meltem Demirors on why society isn’t ready for a crypto-driven revolution yet

Meltem Demirors hasn’t just been working in crypto for seven years — she’s been shaping its trajectory. Demirors, chief strategy officer at publicly traded European digital asset manager CoinShares, got her start in the space when she went to MIT for business school and became immersed in the world of fintech startups, back when Bitcoin was the only major cryptocurrency in mainstream discourse. Soon after, she met Barry Silbert and Ryan Selkis, founders of crypto investment firm Digital Currency Group, and got involved as one of the company’s earliest employees.

The rest is history, as Demirors told us on this Tuesday’s episode of Chain Reaction. But even though Demirors first got into this field because of Bitcoin, and still “loves” the cryptocurrency, she’s over the infighting in the crypto community, a tension that is particularly heated between Bitcoin proponents, known as “Bitcoin maxis,” and staunch supporters of other blockchains. You can listen to the full interview with Demirors below.

“I think it has become highly polarizing. People in the industry more broadly self-identify as Bitcoin maximalists, people self-identify as crypto maximalists, there are all of these labels we sort of apply. But the truth is probably much more nuanced,” Demirors said.

As with many other early adopters of crypto, Demirors’ passion for its underlying technology stemmed in some ways from the ideology that shaped Bitcoin’s inception, a largely skeptical political point of view that is critical of governments and institutions and seeks to use crypto as a means to reclaim financial power for everyday individuals.

“Everyone I interact with [in Bitcoin] is intellectually really engaged. There was a political element, which I found interesting because I’ve never really thought of myself as a political person,” Demirors said. Being exposed to that element got Demirors thinking about the role of money in society and our political system, which helped her make the leap from her previous corporate finance jobs into the role at Digital Currency Group after graduate school.

Demirors admits the ideological fervor behind crypto has shifted as the asset class has gained popularity.

“We’ve recognized that in order for Bitcoin and cryptocurrencies to achieve adoption, we do need to collaborate with institutions,” Demirors said. “I also think there’s growing recognition that the regulatory environment necessitates certain types of behavior, as we saw in Tornado Cash recently. And so I think where we’re at now is that it doesn’t necessarily feel like revolution; it feels more like evolution.”

She added that while she believes experimentation on the fringes of cryptocurrency still feels very revolutionary from a capability perspective, systemic change will take much more than just new technology.

“It involves policy, it involves institutions and involves education and a lot of other complex cultural and societal factors. I think we still haven’t hit that major inflection point. And I think it will probably take some time to materialize,” Demirors said.

Crypto’s biggest powerhouse flexes on its competition

Meltem Demirors on why society isn’t ready for a crypto-driven revolution yet by Anita Ramaswamy originally published on TechCrunch