ConsenSys believes it can become a valuable company, provided it can get through the next year.
As The Information first reported Monday, the company is seeking approximately $200 million in new investment. However, ConsenSys also projects $152 million in expenses in 2019, with $52 million in revenue, for an estimated $100 million cash burn, according to an investor deck obtained by CoinDesk.
The company is pitching itself to investors as a combination of three significant assets: equity in roughly 134 projects or companies, token holdings from major initial coin offerings and internal operations with significant long-term revenue potential.
With additional funding, ConsenSys expects to do the following through 2020: launch at least 10 blockchain networks, grow revenue to $100 million per year, tokenize 30 percent of activities in its so-called “mesh” of projects and help the ethereum community deliver its 2.0 upgrade.
As CoinDesk reported last year, the company went through a major restructuring in order to focus more on businesses with revenue potential. This year’s slide deck gives some clarity about what the company is currently emphasizing.
“ConsenSys is building the products, platforms and companies to enable the tokenization of the $80 trillion global economy,” the slide deck reports in its first pages.
The deck describes the ConsenSys product strategy as comprising four “interconnected layers:” open platforms, the future of work, decentralized finance (DeFi) and Web 3.0.
It highlights several companies at each layer, including Grid+ and Gnosis, as open platforms; OpenLaw and Gitcoin, as the future of work; Trustology and ConsenSys Digital Securities, as decentralized finance (DeFi); and Kaleido and uPort, as Web 3.0.
Beyond those, the document says ConsenSys Labs has incubated 82 projects, its accelerator has worked with 27 and the company has directly invested in 35 companies between ConsenSys Ventures and ConsenSys AG.
Of all the projects, the deck places the most emphasis on four: PegaSys, Truffle, Infura and MetaMask.
It describes PegaSys as infrastructure for enterprise ethereum and ethereum 2.0, with a team size of 60 people. Infura is infrastructure-as-a-service for ethereum, with a team size of 18. Truffle is described as the ethereum development environment, with a team size of 20. Finally, MetaMask is a simple browser extension for using ethereum, with a team size of 17.
Meanwhile, the company holds large stakes (both in the form of equity and tokens) in companies that came up during the ICO boom. It represents its stakes in Gnosis, Grid+ and AirSwap as the most valuable while promising future token launches.
While acknowledging the tokens for these projects have lost a great deal of value, the document argues:
“We have conviction that our projects are focused on cryptoeconomic networks that will be essential and dominant in Web3 and have long term value.”
The deck saves its strongest argument for last, perhaps suspecting that only real revenue will convince investors at this stage.
“After building the market and commercial engagement appetite, we refocused our business development efforts to build a broad enterprise and government pipeline across key verticals,” the deck contends.
The company earned $6.5 million in 2017, $21 million in 2018 and projects $52.3 million for 2019. Most of that revenue has come through services, primarily ascribed to the Solutions division.
Meanwhile, ConsenSys argues its deal pipeline (that is, contracts under discussion) has been growing rapidly, with $125 million in potential deals as of mid-March, and $10 million secured that month.
“We are shifting from smaller (~$200,000) advisory and proof-of-concept work to large (~$10 million ) product and platform development engagements,” the deck reports.
A request for comment was not returned by ConsenSys as of press time.
ConsenSys lanyards photo via CoinDesk archives
Marco Polo Blockchain Network Welcomes Japan’s SMBC Bank For Trade Finance
Marco Polo Blockchain Network Welcomes Japan’s SMBC Bank For Trade Finance
Blockchain services are being adopted by many companies nowadays, even in financial institutions and banks. The immutable ledger’s appeal helps to keep all transactions organized in a trustless way, which clearly appeals to the Sumitomo Mitsui BankCorporation (SMBC). The Japanese bank has chosen to improve trade finance with the use of R3’s Marco Polo blockchain network, according to reports from CoinDesk Japan. SMBC is presently the third-largest bank in Japan, based on assets.
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Kawasaki commented that this “time-consuming process” has continued for a century, which is part of what led SMBC to the blockchain network. The lack of complications will streamline the former paper-based process. Hopefully, through this new project, new services will be available “later this year.”
Daniel Cotti, who acts as the managing director of the Centre of Excellence for Banking and Trade for Marco Polo, pointed out that this network has both the “resources and technology” to change up trade finance for the banking industry. Cotti believes that the implementation of this network with the banks will help to improve the transparency and reduce risks.
Along with the announcement from this major Japanese bank, China’s central bank announced a partnership involving one of their subsidiaries with trade finance. In France, lender Societe Generale has decided to issue bonds that are worth 100 million euros with the use of the Ethereum blockchain.
Trade finance stands to greatly benefit from the use of blockchain technology. Blockchain platform We.Trade, which focuses on trade finance, only just went live in July last year. Hopefully, through more implementation like these cases, blockchain’s reach can continue to expand.
Top 3 Japanese Bank to Roll Out Services on Marco Polo Blockchain
Sumitomo Mitsui Banking Corporation (SMBC), Japan’s third-largest bank by total assets, will launch blockchain-based trade finance services in the second half of this year.
SMBC’s vice chairman Yasuyuki Kawasaki announced the news at a recent fintech seminar in Tokyo, saying that the bank will roll out new services for import and export companies using the Marco Polo trade finance blockchain platform, CoinDesk Japan reported Thursday.
Kawasaki said that, traditionally, trade finance is a “very complicated,” paper-based and time-consuming process. SMBC completed a proof-of-concept using the blockchain platform back in February, aiming to improve its trade operations. It said at the time that the platform “provides paperless, real-time connectivity and easier access.”
The Marco Polo network – built on blockchain software startup R3’s Corda platform – saw its first real-world transactions going live last month. The network was founded by R3 and trade finance specialist TradeIX.
The transactions took place between two German companies. One transaction involved the delivery of special hydraulic couplings from Germany to China and the other the delivery of pumps within Germany.
Since launching in 2017, the Marco Polo network has added some major financial institutions as members, including ING, BNP Paribas and Commerzbank, among others.
Announced this morning, BayernLB, Helaba and S-Servicepartner have also joined the Marco Polo network “for piloting and evaluating purposes.”
Daniel Cotti, managing director, Centre of Excellence for Banking and Trade for Marco Polo, said:
“Today, we have the resources and technology to transform the way banks serve their trade finance customers and enable easier access to credit, while minimizing risk and increasing transparency.”
Trade finance is increasingly being eyed as a beneficial use case for blockchain technology. Last July, another trade finance blockchain platform called– built on Hyperledger Fabric and with nine banks on board – went live.
Just yesterday, China’s forex regulator and manager, the State Administration of Foreign Exchange (SAFE), said that it has developed a blockchain system aimed to address inefficiencies in cross-border trade finance. Pilots in three regions and two cities are now planned.
Yasuyuki Kawasaki image via CoinDesk Japan
Payments Firm Wirex Launching 26 Stablecoins on the Stellar Blockchain
Payments platform Wirex is launching 26 stablecoins on the Stellar blockchain network.
The U.K.-based firm announced the news on Thursday, saying that the stablecoins will be backed by fiat currencies including the U.S. dollar, euro, the British pound, Hong Kong dollar and the Singapore dollar.
Wirex, which is licensed by the country’s finance watchdog, the Financial Conduct Authority (FCA), added that the cryptocurrencies can be spent using its own multi-currency Visa card. Wirex’s card allows users to convert and spend cryptocurrencies wherever Visa is accepted, till now supporting 8 cryptocurrencies and 10 fiat currencies.
The stablecoins can also be “instantly” converted to other stablecoins at over-the-counter (OTC) rates, the firm said, adding that the new crypto offerings could have use cases in remittances, token issuance and redemption, and merchant settlements.
The Stellar network was chosen over other blockchains because of its better security and scalability features, as well as lower costs for real-time transactions, Wirex said. The firm will also add Stellar’s native token, lumens (XLM) to its platform.
Tech giant IBM also notably uses Stellar for its payment network World Wire. The firm signed deals with six banks to issue stablecoins on the platform just last month.
The news comes following something of a flood of new fiat-backed cryptos over the last year, with eToro most recently launching eight branded stablecoins alongside a full crypto exchange just days ago.