The tipping point | Adventures of a Unicorn

Katharine Wooller, Managing Director, UK and Eire, Dacxi

CryptocurrencyGetting crypto to be taken seriously sometimes feels like pushing a very large snowball up a hill; at some point it has to have the critical mass to gather its own momentum!

Over the last few weeks it feels as though, finally, the industry has come of age, hastened greatly of course by a global pandemic, and the implosion of all major economies.

It seems as in the David and Goliath fight that is crypto Vs banking, that the first-round bell has gone off, with surprising results.

The industry news of recent weeks is enlightening, affirming confidence from institutional investors.

The asset manager Stone Ridge Holdings Group has purchased 10,000 BTC (approx. £88m at the time of writing) as a “primary treasury reserve asset”.  Micro-strategy has purchase $425m worth of BTC, and Square has invested $50m.  Mode Global Holdings, a London Stock Exchange-listed company, has announced plans to make a substantial purchase, as it looks to convert 10% of its cash holdings as part of a strategy “protect investors’ assets from currency debasement.”

Grayscale Investments, whose clients are mainly institutional and professional investors, announced a record quarter, with over $1 billion raised in three months, more than four times the amount for same quarter last year.   Even the investment banks have had reason to pause on their usual scorn: JP Morgan issued a research note on bitcoin stressing the “vote of confidence” from Square’s recent treasury purchase of $50 million worth of BTC.  If the institutional interest is there, crypto is finally being taken seriously as an asset class.

To my mind, the industry is now a force to be reckoned with.  It is no longer only a niche interest for hipsters, millennials and PHD computer scientists.  This week a PWC report on investment in crypto related businesses suggests that the industry is all grown up, with $1.1bn being deployed via venture capital.  The value of these deals in the first half of 2020 has already eclipsed that of the whole of 2019.  The rate of progress is clearly ramping up.  Around $597m has been spent on 60 deals in 6 months, mostly focused on crypto exchanges (in my opinion a long overdue consolidation) and trading infrastructure – again a sign of a maturing industry.

These changes are best seen via the lens of a global shift to blockchain technology, which is now omnipresent across a large number of industries, not just banking and payments, but also supply chain logistics, gambling, gaming, healthcare and agriculture.  I would go so far as to say it is necessary progress for mankind.

PWC estimates that blockchain technology stands to boost the global economy by $1.7tr in the next 10 years –  at 1.4% of global GDP this is significant in our current predicament.  PWC’s economists are very specific about timescale, forecasting a tipping point of 2025 if blockchain technologies are adopted at scale across the world, suggesting that the UK stands to benefit by around $50bn over the decade.  They also identify that financial services stands to generate $224bn worth of value from blockchain, unsurprising therefore that the blockchain industry is “eating the lunch” of traditional banking businesses.

It is no surprise to me that Paypal, one of the world’s largest payment businesses, has finally confirmed, officially, in the last few days they will be offering crypto to their 300m+ users, nor that the prices reacted very positively to this news – at the time of writing the last 24 hours have seen Bitcoin rally 6%, Ethereum 9% and Litecoin 12%.

The rate of progress has noticeably ramped up in the last few weeks, and in my opinion, we are past the point of no return.  Great news for the industry, and early investors alike.  I’ll raise a glass to that!

Adventures of a unicorn is a business blog documenting the daily life of tech start up in hypergrowth.  Dacxi is a unique crypto business in the crowd lending space.  

Katharine Wooller About the author

Katharine Wooller is managing director, UK and Eire, Dacxi – a digital crypto fintech platform specialising in bringing cryptocurrency to the ‘crowd’.

Katharine Wooller has had a long UK fintech career, as Investment Director at industry leading peer-to-peer lender, and in senior roles at a specialist investment banking SAAS supporting tier one banks, asset managers and hedge funds.  More recently she has held advisory roles for blockchain businesses and is currently MD for a retail crypto exchange. She leads the Women Who Crypto initiative.


If you are a job seeker or someone looking to boost their career, then WeAreTechWomen has thousands of free career-related articles. From interview tips, CV advice to training and working from home, you can find all our career advice articles here


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Opportunity in chaos | Adventures of a Unicorn

Katharine Wooller, managing director, Dacxi UK and Eire

desk-with-laptopWe are in some strange times; I fully expect my children and grandchildren to ask me what it was like to live through the Coronavirus era.  It is the black swan event to dwarf all others.  

The Bank of England has forecasted a fall in GDP of 30% due to the pandemic – the worst in 300 years.   By way of comparison to previous recessions in living memory, the pre-recession peak to trough fall in GDP was around 5% for the mid-1970s and early-1980s recessions, whilst the early-1990s recession was relatively shallow at around 2%.

The major economies are drunk on printing money like there’s no hangover tomorrow.  Again, for some context on the size of the problems we are facing, America has printed more money in one month of this year than in the first two 200 years of existence.

This means that during 2020 the U.S. budget deficit — 3.3 trillion USD — was larger than the total debt incurred from 1776 through the end of 1979.  In the interest of perspective, with the first trillion dollars, the US managed to defeat British imperialists, bought Alaska and the Louisiana Purchase, defeat fascism, end the Great Depression, built an Interstate Highway System, and get mankind to walk on the moon.

Overall, economically, we are fairly well up poop creek with no paddle and a hole in the boat. In the UK, we currently have the lowest base rate on record, and there is much talk about negative interest rates forthcoming in the near future. The property market is forecasted by the CEBR to drop by 14% next year, the FTSE is down 22% for the year to date – frankly there aren’t many places for cash to lie low and wait it out. The politicians are quick to point out there is no “quick fix” – Boris Johnson’s Conservative Party conference speech last week was the first senior politician, that I am aware of, to point out there is no going back to our previous normal. As Prime Minister one assumes that he’s privy to information the average man on the street isn’t.  More worryingly, Sunak has already warned the British public to steel themselves for taxation increases due to the “once in a century” nature of the crisis.

The historian in me cannot help but notice that boom and bust are cyclical.  After every major event there have been enormous social and economic change, and that there is huge opportunity in the current scenario – the two world wars being an obvious example.  Whilst the devastation of coronavirus is particularly felt in the margins of society, in the most physically and economically vulnerable of our community, there is huge opportunity for evolution, particularly in our financial infrastructure.  Already, arguably, this is taking place.

At the top of the list is The Global Economic Reset initiative from the International Monetary Fund, with no small remit, in their own words to “build a world that is greener, smarter and fairer”.  The vast majority of central banks are looking to digitise their currencies, which gives crypto a starring role.  The EU has pledged a new set rules by 2024 with the aim of streamlining cross border payments and “enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector”.  As the acceptance and use of crypto grows, particularly in the coins with a fixed supply (ie bitcoin), I would hazard an educated guess, will the prices.

For the savvy, there is huge opportunity in the current environment. I take no offense that the ever-growing number of retail and institutional investors would not be joining the crypto party if the economy was a bed of sweet-smelling roses. Fidelity estimates a third of institutional investors now own crypto; the FCA’s research shows that the uptake from retail investors has doubled over the last year.

The growth patterns in both gold and crypto shows a flight to safe haven assets as a hedge against inflation. Gold futures climbed past $1,900 per ounce over COVID to tally their highest settlement and intraday on record at the height of COVID, and the blue-chip crypto Bitcoin and Ethereum are up 54% and 202% respectively.

Interestingly, it was only over the COVID summer that industry titans came on record in praise of bitcoin as a hedge against inflation; for example, Hedge Fund superstar Paul Tudor-Jones pledging: “If I am forced to forecast, my bet is it will be Bitcoin”. Similarly, over COVID, investment guru Raoul Pal pivoted hard to bitcoin, grimly noting that coronavirus will be ‘the largest insolvency event in history”.

We are in for a rocky ride, the best defence for the average person appears to be: financial education, diversification, reasonable cash reserves, and emotional resilience.

See you on the other side, in what I hope will be an improved version of our previous systems.

Adventures of a unicorn is a business blog documenting the daily life of tech start up in hypergrowth.  Dacxi is a unique crypto business in the crowd lending space.  

Katharine WoollerAbout the author

Katharine Wooller is managing director, UK and Eire, Dacxi – a digital crypto fintech platform specialising in bringing cryptocurrency to the ‘crowd’.

Katharine Wooller has had a long UK fintech career, as Investment Director at industry leading peer-to-peer lender, and in senior roles at a specialist investment banking SAAS supporting tier one banks, asset managers and hedge funds.  More recently she has held advisory roles for blockchain businesses and is currently MD for a retail crypto exchange. She leads the Women Who Crypto initiative.


If you are a job seeker or someone looking to boost their career, then WeAreTechWomen has thousands of free career-related articles. From interview tips, CV advice to training and working from home, you can find all our career advice articles here


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Goal setting | Adventures of a Unicorn

FintechFor the uninitiated, for the start-up community “unicorn” status is the holy grail of growth, the sacred £1bn valuation. They are a source of much mystique, and many a bad half-idea is a creaking rocking horse masquerading as the mythical being.

Even worse, the Shoreditch scene has become, for some businesses, a parody of itself.  Too much skateboarding to work with a good idea in theory, not enough actual action or sustainable profitability.  Alas, a lot of horse manure often contained therein.

Dacxi is the 6th disruptive business I have worked with from an early stage, and my 3rd in the blockchain space.  Two tech start-ups I have recently assisted, have recently achieved pre-money valuations of £15m and £5m respectively.  My blog posts will attempt to cut some of the sound business advice from the zeitgeist wannabees’ soundbite sophism.  Certainly, you have to think differently to create a unicorn.

Fintech, and specifically the crypto industry, is a microcosm for a number of broader social phenomena of our times. It is a perfect venn diagram of a number of themes: big data, a sense that the current financial infrastructure is not fit for purpose, the decentralisation and democratisation of wealth, the need for a vastly improved (cheaper, faster & more efficient way) to move value.

It has been seemingly unstoppable in its rise.  Numerous entities have come out in favour of blockchain technologies: from Central Banks working on digital currencies, such as our very own Bank of England, leviathan payment firms (Mastercard, Visa, Paypal) to titans of banking including BlackRock, DTCC and the New York Stock Exchange. Some of the world’s largest retail firms, also, have pinned their colours to the flag of crypto, including eBay, Starbucks and Uber.   More interestingly, recent trends have suggested that bitcoin is “decoupling” from traditional financial markets, and a number of substantial hedge funds are taking it seriously as an asset class.  Indeed, industry stalwart Paul Tudor Jones has postulated that it can be used to hedge against inflation.

There are some industry commentators suggesting we are in the “iPhone moment”, in terms of adoption, as it becomes the dominant technology, past the point of no return. Certainly, much like dog years, a week in crypto is the same as a year in any other industry.

I’m not generally a massive fan of platitudes, but I’ve always liked the phrase: “if your dreams and aspirations don’t scare you, then they are not big enough”.  Interestingly google suggests a number of folk who claim all credit for this wholesome advice!

I joined Dacxi in late February 2020, a business with aggressive aspirations: to build a leading retail crypto exchange, which seeks to provide liquidity on its community coin, list on the London Stock Exchange in the next 12 months and create the world’s largest female crypto community.  No small remit, and whilst we regularly make press comment, it felt right to capture some of the joys and frustrations on a detailed basis.

Hopefully this blog will provide a lively account of the roller coaster ride that is an early stage fintech!

In next week’s blog: Starting a new job during COVID and the newly acceptable business behaviour!

Adventures of a unicorn is a business blog documenting the daily life of tech start-up in hypergrowth.  Dacxi is a unique crypto business in the crowd lending space. 

Katharine WoollerAbout the author

Katharine Wooller is managing director, UK and Eire, Dacxi – a digital crypto fintech platform specialising in bringing cryptocurrency to the ‘crowd’.

Katharine Wooller has had a long UK fintech career, as Investment Director at industry leading peer-to-peer lender, and in senior roles at a specialist investment banking SAAS supporting tier one banks, asset managers and hedge funds.  More recently she has held advisory roles for blockchain businesses and is currently MD for a retail crypto exchange. She leads the Women Who Crypto initiative.


If you are a job seeker or someone looking to boost their career, then WeAreTechWomen has thousands of free career-related articles. From interview tips, CV advice to training and working from home, you can find all our career advice articles here


Lockdown & the Future of Remote Working | Adventures of a Unicorn

Wild Code School_remote learning, woman learning to codeUnderstandably, we are all getting a bit neurotic about what the “new normal” will look like post Covid.

We’re all running out of ways to use the word “unprecedented”! Second only to the guesstimates on just how cataclysmic our economic forecast looks, is what Corona-virus has done to our hither to held as irreversible societal and working norms.

As someone that started a new role as Corona-virus hit the UK, I feel well placed to comment on how overnight compulsory homeworking has affected a scaling tech business.

It is probably the stuff of a particularly detailed anxiety nightmare to take on a senior role, spend 10 days with the founder for onboarding, to then be stranded eleven thousand miles and an 11-hour time difference apart. In March this year, this was exactly my personal challenge. Over the past few months, I have come to appreciate the many genuine advantages of a remote team based from home, that I intend to make permanent in my territory.

Despite much anguish and hand wringing when lock down was first announced, I reflected that plenty of businesses have successful teams that do not work in the same four walls. Whilst we have a relatively modest global head count of 20, split across 6 offices in 6 times zones, there are plenty of much larger organisations who are, to say the least, disparate.

Walmart, which has one of the largest headcounts in the world, employs 2.2 million people in 27 countries, which doesn’t seem to have done last year’s $3.8bn of profit any harm. I know many of the investment banks, who are not constrained by budget, have senior leaders that hot desk permanently. More recently, in response to Covid, tech stalwarts Google and Facebook have announced they expect their teams to work remotely for the rest of the year. As I wrote in an article for Fintech alliance, in Spring this year, frankly tech businesses should be a masterclass in managing relationships remotely.

Lockdown has been over-whelming positive from a commercial perspective. Whilst I am sensitive to the devastation that Covid has reeked for businesses and individuals worldwide, we are in the truly privileged position that Coronavirus has positively impacted our turnover. As a digital offering, the majority of the UK population being stuck at home was very helpful, as was a broad distrust of traditional financial infrastructure positively impacting the crypto markets. It has been somewhat surreal that our busiest ever months have been over the lockdown period.

Whilst at time it felt like the four horsemen of the apocalypse were enthusiastically saddling up, personally there is much about full time home working that I will seek to preserve.

Like many people, my schedule gained a whole day a week from not having to commute. Thus, I was able to fill my diary with high quality opportunities to trouble shoot small issues and think deeply about broader strategies issues — hugely useful, of course, when the world is in meltdown and constantly changing.

I will miss encountering a problem, to spend a few minutes walking around the garden with a cup of tea until the solution presents itself. A walk to a grotty third-floor bathroom just won’t achieve the same! I would suspect moving forwards, we will all be picky with our time, and only meet someone physically, if we can justify the travel time, be they 10 minutes or 10 hours away, when a zoom call will do.

In terms of corporate culture, it is now broadly accepted you can efficiently run a geographically disparate headcount. I’ve loved some of the igneous methods that have emerged for keeping morale up, including zoom-hosted team quizzes, “dress up Friday”, and internet broadcast HIIT classes. Frankly, I feel much closer to team members in different continents, now I am acquainted with their living rooms, spouses, kids, cats and lounge wear.

Moreover, it should be a time to shine as people managers, and competent management during the bad times binds people in a way that doesn’t happen when the going is good. I hope, too, that the tech obsession with London wanes — sky high rents, and zero work/life balance in offices long overdue a refurb but considered trendy, is long overdue a reconsideration in my opinion. It is not true that only London based businesses succeed, as the growth of tech hubs in Manchester and Birmingham will attest.

I have a hunch that the business environment will be friendlier and more inclusive. Pre-Covid you would be mortified to have your child or DHL delivery interrupt an important online meeting — now it seems par for the course. We are all entitled to hobbies, relationships and to live in a property/area that we like, and more flexibility in the work environment would go a long way. In my opinion, tech businesses should be trail blazing in this respect!

Adventures of a Unicorn is a business blog written by Katharine Wooller, Managing Director, UK & Eire, Dacxi.com. It documents the daily life of tech start-up in hypergrowth.

Katharine WoollerAbout the author

Katharine Wooller is managing director, UK and Eire, Dacxi – a digital crypto fintech platform specialising in bringing cryptocurrency to the ‘crowd’.

Katharine Wooller has had a long UK fintech career, as Investment Director at industry leading peer-to-peer lender, and in senior roles at a specialist investment banking SAAS supporting tier one banks, asset managers and hedge funds.  More recently she has held advisory roles for blockchain businesses and is currently MD for a retail crypto exchange. She leads the Women Who Crypto initiative.


If you are a job seeker or someone looking to boost their career, then WeAreTechWomen has thousands of free career-related articles. From interview tips, CV advice to training and working from home, you can find all our career advice articles here


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A Need for Speed and Valuation Madness | Adventures of a Unicorn

desk-with-laptopIt is a truth universally acknowledged that speed kills, particularly in start-up land. Every new tech business is obsessed with the maximum addressable market and getting the “hockey stick” of hyper growth.

For most immature and cash-strapped businesses, understandably, the quicker they can scale, the better, and ideally aided by VC/PE funding. Timing can be live or die.

Interestingly, numerous fintech businesses that are not revenue generating or have a large client bank with non-viable account levels, have achieved eye-watering sale prices. It can be postulated that some of the tech industry valuations defy logic. Great for founders, not so hot for hype-driven investors.

It is therefore interesting to reflect on the speed of adoption, and the journey to becoming a dominant technology. Previously, there was much talk around the “first mover advantage”, where being the first business to dominate a niche was usually the victor. Interestingly, technology businesses tell a more subtle story, with good examples being Microsoft coming up with a tablet a full decade before the iPad which ultimately triumphed; and Friendster (amongst others) beating Facebook as first to the lucrative party that is social media.

Crypto is a particularly interesting case study in adoption vs value, and a quick google search will reveal as many evangelical fans as doom mongering naysayers. However, it is a fact crypto currency cannot exist if the local currencies are effective.

The most interesting tech businesses drive innovation and delivers something the world does not yet know it needs, thus making the market. Annoyingly, the word disruptive has been often overused. Uber did not invent cab rides, any more than eBay did not invent e-commerce, nor Airbnb the holiday let. They simply provide a better more fit-for-purpose version. Crucially, they provided the right product, in the right place, at the right time. Certainly, recent economic events suggest that the global financial infrastructure is not up to scratch, and the major crypto coins have recovered harder and faster than traditional assets.

What is more interesting is whether crypto is in its “iPhone moment” where it reaches the tipping point to become the dominant technology. Indeed, the attention from hedge fund managers, asset managers and tier one banks, who are finally taking it seriously as an asset class, would suggest so.

We must acknowledge there have been some heinously bad ideas in the crypto industry, toxic coins, poorly executed exchanges, and bizarre hybrid financial instruments. Crypto suffers, rightly, from an image crisis and increasing interest from regulatory bodies should provide a much needed clear out, particularly in the privacy tokens arena.

Bitcoin’s investment cycle to date has been complex; the major returns running to thousands of per cent, seen in late 2017 early 2018, were a quick burst bubble, motivated by hype rather than solid fundamentals. At one point during these heady times, Ripple’s co-founder, was richer, on paper than the founders of Google and Facebook. Hindsight is a beautiful thing!

The further bitcoin deviates from standard asset classes, and it is widely held to now be decoupled from traditional markets, the harder it is to analyse. Like the dot-com boom of the noughties, the previous explosive growth was based on irrational speculative values, but what it has achieved is to lay the groundwork for “2nd Wave” businesses. Interestingly, in the previous internet mobile tech boom, this created some of the most valuable companies in history. The second crypto wave, the evidence suggests, is here.

Adventures of a Unicorn is a business blog written by Katharine Wooller, Managing Director, UK & Eire, Dacxi.com. It documents the daily life of tech start-up in hypergrowth.

Katharine WoollerAbout the author

Katharine Wooller is managing director, UK and Eire, Dacxi – a digital crypto fintech platform specialising in bringing cryptocurrency to the ‘crowd’.

Katharine Wooller has had a long UK fintech career, as Investment Director at industry leading peer-to-peer lender, and in senior roles at a specialist investment banking SAAS supporting tier one banks, asset managers and hedge funds.  More recently she has held advisory roles for blockchain businesses and is currently MD for a retail crypto exchange. She leads the Women Who Crypto initiative.

 

 


If you are a job seeker or someone looking to boost their career, then WeAreTechWomen has thousands of free career-related articles. From interview tips, CV advice to training and working from home, you can find all our career advice articles here