Emergence Bytes Vol.1
Digital asset markets in 3 min or less
Greetings from Emergents @ Weild & Co, and welcome to the first edition of Emergence Bytes, where we dish out quick but original takes on what we’re seeing in the blockchain and digital asset markets.
About Emergents @ Weild & Co
We are tech investors, wall street veterans, blockchain enthusiasts, and university professors focused on providing comprehensive investment banking and tokenization services to innovative issuers.
We are one of only a few i-banks in the world that believe in and work with blockchain-enabled assets.
Emergence Bytes Sections
Here are the topics we are biting into:
👩💻Featured Insight: Blockchain Fundraising in the Age of COVID
💸Industry Capital Activity
🛠Blockchain Use Cases
🎧What We’re Listening To
🎟Which Events We’re Attending
👨👩👧👦Emergents Team Update
👨💻Featured Insight👩💻
Blockchain Fundraising in the Age of COVID-19
It's not exactly a news flash to say that COVID-19 has altered fundraising plans for both blockchain startups and venture funds. However, the situation is as amorphous as it is rapidly evolving. Here are our initial takes:
Institutional capital is flowing to tier-1 VC firms, not smaller funds. Case in point, the recent a16z's crypto fund II, which was significantly oversubscribed. The original fund target was $450 million, but overwhelming demand increased the fund size to $515 million. On the contrary, newer yet high-performing funds such as Anthony Pompliano's Morgan Creek Digital is experiencing difficulty raising their second round. According to Pitchbook, less available capital is forcing LP’s to allocate capital to managers that have a long track record of performance.
Bridge rounds abound. Crunchbase recently detailed a story about blockchain startup Data Gumbo. They were closing their Series B round of financing until COVID-19 stormed onto the scene, causing some new investors to back out. Instead of fretting, they reached out to existing investors and were able to secure short-term funding through a bridge round and refocused company efforts on executing and growing. They will now be able to complete an even larger Series B once the capital environment becomes favorable. At Weild & Co, we have seen many companies prudently adopt this strategy.
Startup valuations are decreasing. According to Pitchbook, deal terms are shifting in investor’s favor. This trend directly contrasts the founder-friendly and blitz-scaling sentiments that epitomized Silicon Valley for the last 5+ years. Furthermore, according to a survey by Paris Startup Station F, COVID is pushing 57% of companies to either delay fundraising efforts or compromise on the amount of capital they originally intended to raise.
94% of VC-backed startups will survive but at a cost. According to the same survey conducted by 120 VC firms, 94% of VC-backed startups will survive these next six months. But survival comes at a price, as over 60% of VC-backed companies cut back on marketing expenses, and over half reduced HR expenses.
Bottom line: Unless your name is Andreesen Horowitz or Bakkt, capital is tough to come by, but not unattainable. And while the equity markets are roaring back to life, don’t count on that trend to continue. It’s best to focus on execution and building, but if you’re a startup that desperately needs capital, cut costs✂️and find a bridge 🌉
💸 CAPITAL ACTIVITY
Blockchain Activity
Wilshire Phoenix has filed to launch a new Bitcoin Commodity Trust and enable investors the exposure to bitcoin without holding bitcoin.
Vanguard has finished the first phase of a pilot to issue digital asset-backed securities and aims to improve the process of securitization with blockchain.
Digital Asset Trading Platform FalconX raised $17 million in a round lead by Accel Partners with participation from Lightspeed Ventures, Flybridge, and Accomplice. This round signals broader optimistic sentiment for the digital asset space, as none of the funds mentioned here are “blockchain-specific”.
Everything Else
While there were 200+ listed funding rounds in the last week, some notable ones are Series C ($150 million) for Postman ($150 m) and Headspace ($47.5 m), Series B for Conversa Health ($12 m) and JW Therapeutics ($100 m).
🛠 Blockchain Use Cases
We are fans of how Estonia continues to implement innovative solutions to everyday activities. With their use of Digital Identification Cards and secure electronic signatures, the country is a fascinating example of how a technology-forward society responded to COVID-19.
We are thrilled when we see examples of emerging technologies converging and Vodafone partnering with Energy Web on using IoT and Blockchain to improve utilities’ energy grids really gets us going.
Leadership from key global organizations continues with the United Nations launching The Atrium - “an interagency platform for blockchain technology, built on blockchain, designed to support learning, collaboration and conversation amongst the UN community.” The World Economic Forum presented their Presidio Principles that provide a framework for their vision of “Foundational Values for a Decentralized Future".
🎧 Podcasts we’re listening to
Venture Stories (Specifically the episode featuring Jesse Walden from May 28th)
🎟 Upcoming Events We’re Attending
BlockDown 2020: June 18th-19th
Remote Crypto Con: June 24th-26th
DLT & Cryptoassets 3.0: June 25th
Emergents @ Weild & Co Team Update
Sean Nasiri is an early crowdfunding pioneer, co-founded the first mission-driven equity crowdfunding platform @GenYrator. Launched the first Reg A+ platform as Dir. of Investments @Startengine. Most recently lead Business Development and Operations on the east coast @TokenSoft.
After spending 2 years working with clients at TokenSoft, I noticed there was a gap in the ecosystem between on-boarding new clients and actually getting them to launch and execute on their offering. The ecosystem lacked the experiences of a professional iBank, which is exactly what Emergents was built to solve.
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