March 25, 2019
Swiss Crypto Fintech Startup Attracted Backing in March
There were 45 angel investment deals worth an aggregate EUR 333 million targeting Western European companies announced in February 2019, according to Zephyr, the M&A database published by Bureau van Dijk, compared with 48 such deals totaling EUR 201 million in January, which indicated value growth was driven by individual investments rather than prolific deal making, though volume did remain relatively level month-on-month (January: 48). Interestingly, value in February was the fourth-highest recorded for the period 2006 to 2019 to date due to one deal that fetched EUR 106 million.
While there is still another week to go until the end of March, as at the time of writing, only 8 angel investments worth an aggregate EUR 13 million have been announced in the month to date and the largest by value did not even exceed EUR 10 million: UK neuroscience, bioscience, and neurophysiology based medical devices developer and maker Neurovalens secured EUR 5 million in a series A funding round led by Wharton Asset Management UK and Techstart Ventures and which featured participation by IQ Capital Partners, Beltrae Partners, Co-Fund NI and the Angel CoFund. Not only was the Neurovalens one of only four investments targeting Western European companies announced in March to date that had a disclosed value, but it also featured investment in a sector other than usual software/technology targets.
Amun of Switzerland was the next target by value and while it is a software/technology target, it is a fintech aiming to facilitate access to crypto-asset investments. The Zurich-headquartered company has recently launched an exchange-traded product (ETP) that tracks a basket of the top virtual currencies but is currently known for its Amun Crypto Basket ETP that started trading on the Six Swiss Exchange in November 2018. Amun landed EUR 4 million in funding from several investors in March, including Adam Draper, the founder of accelerator Boost VC, Graham Tuckwell, the founder of ETFS Capital, and Greg Kidd, co-founder of Hard Yaka, as well as four family offices. Amun intends to use money raised to keep investing in technical infrastructure, to launch additional crypto-tracking exchange-traded products on more strategies across multiple geographies, and to help others bring crypto assets to the public markets.
The category encompassing cryptocurrency/blockchain/bitcoin/application-specific integrated circuit (ASIC) microprocessors and related activity is a relatively new and up-and-coming segment. However, global companies operating in this area have certainly attracted significant angel investment in recent years; Zephyr shows 51 such deals worth an aggregate EUR 315 million were announced in 2018 (2017: 16; EUR 126 million) and 7 deals with a known combined value of EUR 228 million have been announced in 2019 to date, of which Amun’s fundraiser is the only one in March so far.
With regard to mergers and acquisitions within this ecosystem, dealmaking has been rather limited so far but is expected to accelerate as players with war chests start seeking growth inorganically and well-funded startups being expanding their own presence, which could let early-stage investors exit and reinvest in newer players. Change seems to be a-coming: Amazon’s Amazon Web Services is now providing a simple way to build blockchain networks; Google recently announced a raft of crypto and blockchain analytics tools; a New York Times report at the beginning of the month indicated Facebook is about to jump on the bandwagon by launching its own cryptocurrency in the first half of 2019; and it is believed blockchain technology will be a disruptor in the payments sector in the future.