All posts in “finance”

Cryptocurrency and a stock market boom pushes TradingView to $37 million in new funding

Fueled by last year’s greed-inducing visions of a cryptocurrency boom and a stock market largely untethered from classical economics, TradingView, a developer of social networking and data analysis tools for financial markets, has raised millions in new venture funding.

The New York-based company just scored $37 million in funding led by the growth-stage investment firm Insight Venture Partners .

TradingView has developed a proprietary, JavaScript-based programming language called PineScript, which lets anyone develop their own customized financial analysis tools. The company “freemium” software as a service model that lets most users connect and exchange trading tips and tricks for free, but begins charging when customers want access to more charts, data and real-time server-side alerts.

There are three payment plans beginning at $15, with a mid-tier at $30 and a high-end $60 per-month premium option.

The company had previously boosted its growth by offering its charting software for free to partner websites like SeekingAlpha, Bitfinex and the Nasdaq. That strategy helped it grow to 8 million monthly active users with around 61 percent coming from direct traffic as of March of this year.

These days the company derives nearly 75 percent of its revenue from those monthly subscription plans to individual traders. TradingView’s executives think the company still has an opportunity to expand its footprint among those retail investors, but it’s also planning to make a push to serve more institutional clients with its toolkit.

For the past seven years the company has enjoyed consistent growth, according to TradingView co-founder and chief operations officer, Stan Bokov.

For Paul Szurek, a vice-president at Insight Venture Partners, the investment in TradingView is building off of broad consumer interest in amateur speculative trading. Looking at RobinHood, Bux and eToro as gateways for new investors who eventually move on to more sophisticated tools, Szurek said that TradingView was often their next step into market investing.

“The rise of cryptocurrencies… and trading those assets… has flywheeled into a broader interest in investing across asset classes,” Szurek said.

While TradingView was never crypto-focused, according to Bokov, the company was supportive from the beginning and it’s been a boon to the broader business. “They came for crypto. They stayed for the other stuff,” Bokov said.

And crypto might just be the gateway drug for younger speculative traders to start investing in financial markets more broadly, according to Szurek. “October to January, during the real core of the crypto boom here, there were a lot of users coming in starting out researching that asset class broadly. Eighty percent move on to research other asset classes,” he said. “As TradingView kind of pushed through the [first quarter], trends in growth really diverged from what we were seeing in purely crypto-focused business and that’s a testament to users leveraging this one-stop-shop component of the platform.”

Additional investors in the new TradingView include DRW Venture Capital and Jump Capital. The company was a graduate of the 2013 Techstars Chicago batch and was seeded by Irish Angels, Techstars, iTech Capital and undisclosed angel investors.

“TradingView was built for non-professional traders, but its accessible trading tools and powerful-yet-intuitive charting capabilities have attracted the attention of institutional investors,” said Kimberly Trautmann, head of DRW Venture Capital, in a statement. “As an investor, we are excited about the diverse cross section of the industry that TradingView has reached and its rapid growth. As a proprietary trading firm on an institutional level, we’re looking forward to leveraging the platform and contributing to its further development.”

Coinbase’s first investment, Compound, earns you interest on crypto

Compound wants to let you borrow cryptocurrency, or lend it and earn an interest rate. Most cryptocurrency is shoved in a wallet or metaphorically hidden under a mattress, failing to generate interest the way traditionally banked assets do. But Compound wants to create liquid money markets for cryptocurrency by algorithmically setting interest rates, and letting you gamble by borrowing and then short-selling coins you think will sink. It plans to launch its first five for Ether, a stable coin, and a few others, by October.

Today, Compound is announcing some ridiculously powerful allies for that quest. It’s just become the first-ever investment by crypto exchange juggernaut Coinbase’s new venture fund. It’s part of an $8.2 million seed round led by top-tier VC Andreessen Horowitz, crypto hedge fund Polychain Capital and Bain Capital Ventures — the startup arm of the big investment bank.

While right now Compound deals in cryptocurrency through the Ethereum blockchain, co-founder and CEO Robert Leshner says that eventually he wants to carry tokenized versions of real-world assets like the dollar, yen, euro or Google stock. That’s because Leshner tells me “My thesis is that almost every crypto asset is bullshit and not worth anything.”

How to get Compound interest on your crypto

Here’s how Compound tells me it’s going to work. It’s an “overnight” market that permits super-short-term lending. While it’s not a bank, it is centralized, so you loan to and borrow from it directly instead of through peers, alleviating you from negotiation. If you loan, you can earn interest. If you borrow, you have to put up 100 percent of the value of your borrow in an asset Compound supports. If prices fluctuate and your borrow becomes worth more than your collateral, some of your collateral is liquidated through a repo agreement so they’re equal.

To set the interest rate, Compound acts kind of like the Fed. It analyzes supply and demand for a particular crypto asset to set a fluctuating interest rate that adjusts as market conditions change. You’ll earn that on what you lend constantly, and can pull out your assets at any time with just a 15-second lag. You’ll pay that rate when you borrow. And Compound takes a 10 percent cut of what lenders earn in interest. For crypto-haters, it offers a way to short coins you’re convinced are doomed.

“Eventually our goal is to hand-off responsibility [for setting the interest rate] to the community. In the short-term we’re forced to be responsible. Long-term we want the community to elect the Fed,” says Leshner. If it gets the interest rate wrong, an influx of lenders or borrowers will drive it back to where it’s supposed to be. Compound already has a user interface prototyped internally, and it looked slick and solid to me.

“We think it’s a game changer. Ninety percent of assets are sitting in people’s cold storage, or wallets, or exchanges. They aren’t being used or traded,” says Leshner. Compound could let people interact with crypto in a whole new way.

The Compound creation story

Compound is actually the third company Leshner and his co-founder and CTO Geoff Hayes have started together. They’ve been teamed up for 11 years since going to college at UPenn. One of their last companies, Britches, created an index of CPG inventory at local stores and eventually got acquired by Postmates. But before that Leshner got into the banking and wealth management business, becoming a certified public accountant. A true economics nerd, he’s the chair of the SF bond oversight committee, and got into crypto five years ago.

Compound co-founder and CEO Robert Leshner

Sitting on coins, Leshner wondered, “Why can’t I realize the time value of the cryptocurrency I possess?” Compound was born in mid-2017, and came out of stealth in January.

Now with $8.2 million in funding that also came from Transmedia Capital, Compound Ventures, Abstract Ventures and Danhua Capital, Compound is pushing to build out its product and partnerships, and “hire like crazy” beyond its seven current team members based in San Francisco’s Mission District. Partners will be crucial to solve the chicken-and-egg problem of getting its first lenders and borrowers. “We are planning to launch with great partners — token projects, hedge funds and dedicated users,” says Leshner. Having hedge funds like Polychain should help.

“We shunned an ICO. We said, ‘let’s raise venture capital.’ I’m a very skeptical person and I think most ICOs are illegal,” Leshner notes. The round was just about to close when Coinbase announced Coinbase Ventures. So Leshner fired off an email asking if it wanted to join. “In 12 hours they researched us, met our team, diligenced it and evaluated it more than almost any investor had to date,” Leshner recalls. Asked if there’s any conflict of interest given Coinbase’s grand ambitions, he said, “They’re probably our favorite company in the world. I hope they survive for 100 years. It’s too early to tell they overlap.”

Conquering the money markets

There are other crypto lending platforms, but none quite like Compound. Centralized exchanges like Bitfinex and Poloniex let people trade on margin and speculate more aggressively. But they’re off-chain, while Leshner says Compound is on-chain, transparent and can be built on top of. That could make it a more critical piece of the blockchain finance stack. There’s also a risk of these exchanges getting hacked and your coins getting stolen.

Meanwhile, there are plenty of peer-to-peer crypto lending protocols on the Ethereum blockchain, like ETHLend and Dharma. But interest rates, no need for slow matching, flexibility for withdrawing money and dealing with a centralized party could attract users to Compound.

Still, the biggest looming threat for Compound is regulation. But to date, the SEC and regulators have focused on ICOs and how people fundraise, not on what people are building. People aren’t filing lawsuits against actual products. “All the operations have flown beneath the radar and I think that’s going to change in the next 12 months,” Leshner predicts. How exactly they’ll treat Compound is up in the air.

One source in the crypto hedge fund space told me about forthcoming regulation: “You’re either going to get annihilated and have to disgorge profits or dissolve. Or you pay a fine and you’re among the first legal funds in the space. This is the gamble you take before asset classes get baptized.” As Leshner confirmed, “That’s the number one risk, period.”

Money markets are just one piece of the financial infrastructure puzzle that still needs to emerge around blockchain. Custodians, auditors, administrators and banks are still largely missing. When those get hammered out to make the space safer, the big money hedge funds and investment banks could join in. For Compound, getting the logistics right will require some serious legal ballet.

Yet Leshner is happy to dream big despite all of the crypto world’s volatility. He concludes, “We want to be like Black Rock with a trillion under management, and we want to have 25 employees when we do that. They probably have [tens of thousands] of employees. Our goal is to be like them with a skeleton team.”

Coinbase CEO Brian Armstrong to talk the future of cryptocurrency at Disrupt SF

Coinbase has come a long way since its launch in 2012. The company has raised more than $225 million and paved the way for cryptocurrencies to enter the mainstream by providing a digital currency exchange. Which is why we’re absolutely thrilled to have Coinbase co-founder and CEO Brian Armstrong join us on the main stage at TechCrunch Disrupt SF in September.

Armstrong worked as a developer for IBM and consultant at Deloitte before joining Airbnb as a software engineer in 2011. At Airbnb, Armstrong focused on fraud prevention, giving him the opportunity to learn about payment systems across the 190 countries Airbnb serves.

In 2012, Armstrong co-founded Coinbase and gave a budding demographic of cryptocurrency enthusiasts the opportunity to trade in their USD for bitcoins, and later the digital currency of their choice. Coinbase currently serves over 10 million customers across 32 countries, providing custody for more than $10 billion in digital assets.

In fact, Coinbase was valued at $1.6 billion following a $100 million funding round in August 2017.

In April, the company unveiled an early-stage fund for cryptocurrency startups, and acquired Earn.com for $100 million. As part of the acquisition, the company brought on Balaji Srinivasan as its first CTO.

There were also reports that Coinbase approached the SEC to become a licensed brokerage firm and electronic trading venue, which would allow the company to expand beyond the four coins (Bitcoin, Bitcoin Cash, Ethereum, Litecoin) that trade on the platform now.

Just yesterday, Coinbase announced that it would offer a new suite of services aimed at institutional investors, who are beginning to warm up to cryptocurrencies.

There is plenty to discuss with Armstrong come September, and we’re absolutely thrilled to have him join the stellar Disrupt SF agenda. You can head over here to buy yourself tickets. See you there!

BRD crowdraises $32 million to build financial services into a mobile crypto wallet

Crypto wallets can’t remain crypto wallets for long. There is so much competition and so many scammers that value-added features like financial services are de rigueur. BRD knows this quite well and is putting $32 million behind the platform to grow out the features and cryptocurrencies supported on their popular app.

Founded by Aaron Voisine, Adam Traidman, and Aaron Lasher, the company started out as a side product called Bread Wallet. BRD, say the founders, was the first iOS bitcoin wallet in the App Store.

The team has 1.1 million users in 170 countries and 76% of those are iOS. They’ve received 71% of their customers in the past year, a fact that attests to the recent popularity of cryptocurrencies. They have $6 billion of crypto assets under protection.

The team has also partnered with Changelly to help transfer more tokens than Bitcoin and Ethereum – including their own BRD token.

How did they raise the money? By token sale, of course. They ran a $12 million presale and a $20 million crowd sale, resulting in a combine Seed and A round that would make most fintech orgs blush.

The team is most proud of their focus on decentralization.

“We’ve made our name around security, first and foremost. That’s what most the miners and dev crowd know us for, as the most secure way to hold and protect all their cryptoassets,” said Voisine. “The assets themselves are not stored in any centralized system within BRD. A transaction on BRD connects directly to the blockchain and are synced in real-time. There is literally nothing to steal from BRD, since we’re not holding a single asset ourselves… even though we have over $6B USD under protection.”

Further, they are offering BRD Rewards that will let BRD users get discounts and other benefits. This is an effort to “bring a much better balance between fees and utilization.”

“We want to be the service for first-time buyers of crypto. We want to be the most popular onramp for consumers into the crypto economy,” he said.

Lasher feels that his mission is far more interesting than just making an iOS wallet. He sees this as a philosophical change that will bring new understanding of the importance of crypto.

“If sending money globally as easily as an email doesn’t impress you, how about the ability to store your life savings in your head, then walking your family across a war-torn border to safety?” he said.

How banks and finance firms are using AI to better engage with and understand you

Against a global backdrop of emerging technologies and ever-changing relationships between businesses and consumers, one thing is clear: leaders in the finance and banking industries will increasingly look to artificial intelligence to understand and engage with their customers in new ways. 

According to a 2017 Forrester report, the widening gap between financial firms that embrace digital growth and business transformation powered by technology and those institutions that continue to do business in traditional ways will continue to widen. 

SEE ALSO: How this AI platform is taking over the business world

As leading banks choose to experiment with new and emerging tech as an opportunity to engage with consumers in unexpected ways, conventional banks and financial institutions will be less able to compete on the global stage. 

It may seem obvious that businesses choosing to leverage predictive technologies, artificial intelligence and mobile applications will be better able to serve their customers and ultimately deliver results. But the truth is many businesses are reluctant to experiment with new technologies — and those who are investing may not be achieving their desired results. 

“Our research shows the global banking and finance sector spends about $85B annually on digital technologies. We estimate 67 percent of this spend is wasted,” said Tiger Tyagarajan, CEO and President of Genpact

However, according to the Genpact Research Institute, there are four key tactics the banking and finance sector can implement to ensure return on investment in the digital space. 

Leverage analytics the smart way 

The way businesses function, the decisions they make, and how they serve clients in the best way possible thrives on access to information. While data analytics is not new, access to smart data is a direct line to the customer. 

However, an intuitive approach to this data is crucial. Particularly when it comes to harnessing this information to identify growing trends and user behavior, uncovering new insights and fine-tuning operations to make smarter decisions and meet business goals. Ultimately, it takes more than just relying on the tech to make decisions. It means leveraging this information in a way that is truly actionable and inspired by the consumers themselves. 

From mobile-first to AI-first 

In almost every way imaginable, we are now in the age of business reinvention. It’s less of an evolution, and more of a revolution in the way modern banking is done. According to Tyagarajan: “successful companies embrace the digital disruption and are willing to destroy a business model to create a new business model.” 

Banks are already using AI to streamline their formerly manual processes for tracking data, saving time and maximising cost benefits. The new horizon? Leveraging AI beyond internal processes to inform consumer interaction. As the finance world grows and develops with this technology, the next step is machine learning that changes and adapts to improve fraud detection and provides smarter customer service by conversing with users every day. By using AI to inform both consumer-facing and internal processes, the potential return on investment can be huge. 

Integrating customer facing and back end of business 

Through artificial intelligence, the front end of business, which consumers interact with daily, and the back end, the internal workings of the finance institution itself, is becoming one holistic entity. Finance companies can no longer simply promise an experience – they need to deliver on their promise within the same interaction, while giving consumers a transparent view of the entire process. 

Lowering costs and increasing ROI 

Artificial intelligence has the benefits of engaging with customers in intelligent ways that offer significant cost savings, by providing smarter decision-making based on customer behavior patterns. Whether it’s new chatbot technology or behind-the-scenes interactions with marketing communications, AI can assist in the creation of customized, intelligent products in increasingly efficient ways. These products and services can even implement AI themselves, with more intuitive interactions including speech functionality or providing advice for personal finance management – at a moment’s notice. 

Using open architecture and a modular approach, Genpact deliver digital products and consulting services, powered by the Genpact Cora AI-based platform, that connects with both legacy systems and new technologies. The result: accelerated development times, higher ROI, and greater flexibility. Combined with an overarching governance layer which mitigate risks, businesses can get the most out of their journey to using artificial intelligence in newer and smarter ways. 

Whether financial institutions are focusing on risk management, customer experience or behind-the-scenes operations within the business, investments in technology like Genpact’s digital platforms and services can, and will, continue to drive efficient returns on investment and have the potential to reinvent the world of finance.

Learn more about how Genpact Cora can help your business.

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