The ICO revolution
Turkish entrepreneurs hoping to cash in on the cryptocurrency
craze in 2018
Turkish startups were barely able to raise $100 million in fundraising rounds in 2017, according to StartupsWatch data. Until last year, Turkey had been the leader among Eastern European nations for startup investments but has now fallen to second behind Poland with Romania nipping at its heels.The largest fundraising in Turkey was conducted by Iyzico, receiving some $15 million from International Finance Corporation (IFC), Amadeus Capital Partners and Vostok Emerging Finance.
Next year, however, the blockchain phenomenon is poised to upend all the trends in the startup ecosystem. Cryptocurrencies have topped the headlines all year, with Bitcoin leading the charge and expected to maintain its market dominance into 2018. But crypto-fever has infected the entrepreneurial spirit as well, with more and more people looking to harness the power of blockchain technologies, and they are poised to change the fundraising landscape forever.
Some five Turkish startups are planning to conduct initial coin offerings (ICOs) in 2018, with the aim to raise around $250 million. Indeed, while their founders may be Turkish who were born in Turkey, most are headquartered elsewhere to conduct the coin offerings.
Kimlic, a digital identity services provider, is entering the fray and aims to raise $14 million. Copyrobo, Global Miles, and Blockchain evangelist Cemil Sinasi Turun are also in preparations for 2018 launches. Only Turun has a plan to conduct his offering in Turkey and is in touch with Capital Markets officials in Ankara. The others will be raising equity from global investors through ICOs in Singapore, Vietnam, Malta or the UK, where the legality of the industry is less in question.
Additionally, a smart travel platform provider on blockchain is planning to raise up to $ 200 million in an ICO. Bundle Network, a cryptocurrency exchange platform, is also planning to raise up to $40 million with a system to allow its investors to conduct trades in several online cryptocurrency exchanges worldwide.
Lets have a closer look at these two, representing the biggest ICO efforts of Turkish entrepreneurs on the global stage:
‘Further’ to d srupt travel ndustry
A spin-off of Istanbul-based Seven Gates that was established in 2012 and invested in blockchain technologies in the travel industry, Further is headquartered in Dubai and the company will be conducting the ICO in Singapore.
It will be offering some 430,000 worth of Ethereum tokens in return for “Smart Travel Record”, a smart token holding passengers’ traveling data, similar to the Passenger Name Records or reservation codes, which could be used in the aviation industry’s main transactions such as ticketing and billing, as well as ground handling, hotel reservations and car rentals.
Futther’s fundraising strat- egy follows a dual track: it is also selling up to a 6 percent stake in the startup to potential investors which it hopes to conclude before the ICO ends.
The startup aims to work with non-IATA members, which comprises 486 airlines worldwide. It is currently holding negotiations with a regional airline association that has continent-wide members in Africa. The company aims to see the first transaction on its platform in 10 months and plans to make the ticketing function available in 18 months.
Part of its business plan is to acquire a 2.5 percent market share within five years, with 100 million ticket transactions on its platform, and help secure $500 million in revenues from airline travel. Deals with a South Asian and a Gulf airline are also underway, according to the company.
The pre-ICO process will be launched in February, with the ICO itself conducted between February and March. The company aims to raise $150 million at the ICO stage while an additional $50 million would be offered if it fully covers its books on time.
Further’s Blockchain will provide a real-time solution for Billing, Settlement, and Payment problems, plus, it will introduce new functionalities like customizable airline tickets and an exchange market for tickets and reservations, according to Further’s whitepaper.
Ticket and hotel reservations will be made through smart tokens, which will have the ability to be exchanged, divided, combined, and change ownership while helping to accomplish the settlement and payment process.
“We envision a future where travel products are customizable, interactive and autonomous,” its white paper said.
Cryptocurrency trade and arb trat on platform
Bundle Network is an online exchange platform connected to various cryptocurrency exchanges that enables users to purchase and sell coins and tokens simultaneously through one account and one click. Users can buy different cryptocurrencies either in bundles or individually, allowing price comparison and arbitration between platforms.
It is seeking to raise $40 million from global investors. The startup is based in London and has a development unit in Switzerland. It will conduct a Token Generation Event (TGE), similar to an ICO, through an entity in Malta.
It has begun the private phase of the TGE and has received commitments from family and friends. It will offer a total of 510 million Bundle Tokens (BND), according to its white paper, valuing the company at $100 million.
Bundle aims to grab 1.2 percent of market share of the continuously growing cryptocurrency market and projects a $40 million revenue target in 2018.
Its revenue model is similar to that of traditional exchange platforms that charge fees from transactions, with a standard transaction costing 0.5 percent.
There are over 1,000 cryptocurrencies and 500 online dedicated exchange platforms in the world. Cryptocurrencies are expected to reach a market cap of $5 trillion by 2025.
‘Further’ a ms to d srupt travel ndustry and conduct an ICO to ra se $200 m ll on n 2018. Bundle Network s to add $40 m ll on to allow ts users to sell and buy cryptocurrenc es from d fferent exchanges s multaneously from a s ngle nterface.
K ml c, Copyrobo and others are expected to follow su t and attract a m n mum $250 m ll on n nvestments.