Last week Bloomio AG, a Swiss-based blockchain-based equity crowdfunding platform that allows investors to fund startups in return for tokenized shares, added a new board of independent experts to conduct due diligence of potential strength and scalability of startups applying to raise on the platform. New members include NeoFelis CEO Eduardo De Barrios, Metahash Chief Legal Officer Maria Agranovskaya, Alibaba Marketing Director Tatiana Ignatochkina and Real Advisors founder Juliet Kasko.
“Lack of information and scam concerns, are amongst the main inhibiters for individual investors to approach startup investments. Implementing a trusted, independent and trustworthy panel of experts – who will conduct the due diligence – is the solution that Bloomio implements to address these concerns,” Bloomio CMO Francesco De Santis explained to Crowdfund Insider via email regarding the advantages of the new advisory board. “Investors will not only have a confirmation that the startup passed the due diligence process, they will have access to a detailed reports with scoring on the 5 main areas of assessment (Team, Product Idea, Innovation, Product State and Process Maturity). In case risks will be identified during the process, investors will be aware and they will be able to make an informed decision.”
In April, Bloomio raised an additional CHF 700,000 CHF — totaling CHF1.4 million in seed capital with plans to start up business in Q1 of 2019 — in growth capital from a group of investors this past spring to develop and scale its platform in order to offer tokenized securities (including a secondary market to provide liquidity for investors). Co-Founded by CEO Max Lyadvinsky and Emile Osumba, The platform’s website has been live since December 2017.
Crowdfund Insider had the opportunity to connect with Bloomio CEO and Co-Founder Maxim Lyadvinsky via email to discuss blockchain, plans for growth and security. Our interview follows:
Crowdfund Insider: Please comment on key issues the platform faces in the sector as Bloomio plots its growth?
Maxim Lyadvinsky: We are bringing forward two massive changes: we are redesigning the venture capital industry allowing virtually everyone to buy and trade shares of startups, having access to professional assessments and unbiased due diligence. This is a social change, and, like all of this sort, brings with it the challenge of building awareness and trust amongst a wide range of users.
We recently conducted a survey where emerged that majority of respondents ignored that it is possible to invest in startups with less than 100 USD. In the same survey, 57% of the respondents said that they would like to invest in startups. Our challenge is closing this gap.
CI: How does Bloomio utilize blockchain?
Lyadvinsky: Blockchain, in our business model, is a key enabler to deploy an efficient and secure secondary market. This is crucial as one of the main blocks for investors, to enter the VC industry, is the lack of liquidity. Having the possibility to trade the tokens, representing company shares, addresses this concern and could bring many more individual investors to invest in startups.
Blockchain plays an industry changing role here as, with the implementation of smart contracts, it reduces significantly the traditional parties involved in startup investments (banks, notaries…) bringing speed and lower costs. Blockchain is also the most secure option to store and process transaction. It is also a challenge as blockchain is relatively new and each novelty requires, in people mind, some time to build trust. It is what it could be called the Buterin paradox: “The main advantage of blockchain technology is supposed to be that it’s more secure, but new technologies are generally hard for people to trust, and this paradox can’t really be avoided.”
CI: In which ways does Bloomio see itself leading the sector? Where does Bloomio expect to be in 2-5 years?
Lyadvinsky: Bloomio brings the highest financial standards to equity crowdfunding. From our approach to due diligence (conducted by 3rd party experts and not by an internal team) to the implementation of the most secure technology to protect all the transactions, as well as the introduction of fund managers, active on the site to allow portfolio investments to accommodate different risk thresholds. This is what, in our view, is needed to bring the trust in the equity crowdfunding sector and to fully exploiting its potential by bringing to it mainstream investors completely new to the VC industry.
Our ambition, in the timeframe you indicated, is to acquire a leading position in Europe and then expand into other geographies.
CI: What predictions does Bloomio have for token equity and security?
Lyadvinsky: We are talking today about tokenizing startups’ equity but virtually any asset could be tokenized and traded across investors. Tokenization could also apply to SMEs and to large corporations. On this last one, you might argue that this is what the stock markets are about, but … implementing a fully regulated, trusted, cross border and liquid crypto market what would be the need for a startup to go for IPO?