The ICO revolution

Dünya Executive - - COVER PAGE - ERDINC ERGENC

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.

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