For a comprehensive overview of UK fintech investment data, take a look at our guide.
2016 is the year of Bitcoin. Last month, as rumours abounded concerning the true identity of Satoshi Nakamoto, the cryptocurrency’s creator, M&A advisors Magister Advisors predicted the space will yield ‘at least five start-ups with $1bn valuations’ in 2016. And where there are start-ups with high valuations, high profile acquisitions are never far behind.
We track a number of UK SMEs in the Bitcoin space. In April 2015, London-based Coinfloor completed its fifth fundraising, securing an unannounced £200k investment at a pre-money valuation of £2.3m. Coinfloor, which in the past has received follow-on backing from Passion Capital, is an online Bitcoin exchange.
Bitstamp is another UK-based Bitcoin exchange. Founded back in 2011, the company lists US Bitcoin investment firm Pantera Capital as a shareholder. In October, Bitstamp completed an unannounced £3.92m fundraising.
It’s no secret the interest of UK banks has also been piqued by Bitcoin. Barclays has been collaborating with Swedish Bitcoin exchange Safello, as well as compliance start-up Chainalysis. However, it’s blockchain, the technology that underpins the cryptocurrency, which has the potential to outgrow Bitcoin and cause the most disruption.
In layman terms, blockchain is a logical progression that uses complex maths to generate consecutive blocks. The consequence being: if you change one, you have to change them all. It’s this sophistication which makes blockchain so secure and, currently, impossible to hack.
At the end of December, American stock exchange Nasdaq employed blockchain technology to complete a share sale. Claiming it was the first instance such a transaction has ever taken place, Bob Greenfield, Nasdaq CEO, has said the “transaction marks a major advance in the global financial sector and represents a seminal moment in the application of blockchain technology”. He added that blockchain could revolutionise equity trades and “the core of capital infrastructure systems”.
Here in the UK we’re also seeing blockchain technology being incorporated at a grass-roots level. Innovate UK’s Provenance Product Passport project has received a £88.5.k grant to develop technology that incorporates blockchain to allow the traceability of material goods. The aim being to give customers the true choice to purchase products manufactured under fair conditions.
Both Bitcoin and blockchain are set for big things in 2016, across a number of sectors. We’ll be keeping our eyes peeled on the latest developments. Stay in the know with the Beauhurst Bulletin.
Beauhurst’s Innovate UK data, updated regularly by our researchers, details over 9,000 projects and just under 6,500 participants. For any academic looking to collaborate with fast-growth companies, Beauhurst Innovate UK data is a great place to start. Request a demo to find out more.