VC Investment Company, Banking on Blockchain Fund, joins the blockchain investment landscape

Life.SREDA recently announced a new fund called Banking on Blockchain Fund, or BB Fund for short. The Fund offers start-up capital for early stage blockchain companies, giving financial institutions access to the “rapidly-growing blockchain ecosystem.”

The Fund starts with US$5m in capital, from Life.SREDA, with a near-term goal of expanding to $50 million by the end of the year. The long term goal is $100 million in backing from financial institutions by 2017.

“The big shift of 2016 will be «acceptance and adoption» of blockchain technology. 2016 will be the year where people will be using the blockchain technology without realizing it.”
— – Life.SREDA

Life.SREDA is a venture capital firm focusing on investments in FinTech mobile and Internet projects. They claim the “next big thing" is the combination of the past decade’s global trends, such as the integration social and mobile evolution with innovative and bright FinTech ideas.

Originally a Moscow-based venture capital firm, started four years ago, the company already covered the U.S. and Europe, before moving headquarters to Singapore in 2014, extending their reach into Asia.

Russia’s largest mobile points of sale service, LifePay, entered the Southeast Asian market in early 2015, with its acquisition of iboxPro. Life.SREDA funded the deal for around US$10 million. The firm also invested US15m in SumUp, a European clone of Square, as well as undisclosed sums in mobile bank Rocketbank and Online Bank Fidor. Thomas Labenbacher, the newly appointed Managing Director of the BB Fund, previously held an executive position at Fidor.

LifePay is among the most successful investments in the Life.SREDA portfolio, which constitutes investments exceeding US$40 million from its first fund, spread across 15 different startups. The firm participated in US-based mobile bank Simple’s fundraising round in June 2013. Simple was later acquired by Spanish banking group BBVA, for US$117M, resulting in a “180% annualized profit,” the company said.

The company’s Managing Partner is Vladislav Solodkiy, who started his career in marketing and advertising. Over the years he held executive positions in top Russian companies: MTS, Alfa-Bank, Russian Standard Bank. Vladisalv’s projects were awarded Brand of the year, EFFIE three times and participated in Cannes Lions.

“Venture Capital funds and Financial Institutions are pumping over $1 billion into blockchain technology start-ups in 2016, four times more than in 2015, and this exponential growth is predicted to continue through 2020.”
— – Life.SREDA

The BB Fund will be headquartered in London, with a focus on the European market, and intends to be a “go-to” for banks by providing an avenue through which they can gain exposure to the rapidly-growing blockchain space.

According to figures compiled by London & Partners, the official promotional company for London, the fintech sector raised over US$3.6b in 2015, a 70 percent increase on the record amount raised in 2014, $2.1b.

Technology companies have raised US$10b in the UK since 2010, and London-based firms account for more than half of the total at US$5.2b. “During 2015 the investment secured by London-based tech firms accounted for 63 per cent of total VC investment raised by UK tech firms,” states the London & Partners.

“The objective of the fund is to nurture those companies we believe have the best possible chance of success based upon detailed due diligence of the technical, managerial and business capabilities.”
— – Banking on Blockchain Fund

The new fund is one of many Venture Capital firms that have been focusing on Bitcoin and Blockchain related products. Barry Silbert’s Digital Currency Group (DCG) has already invested in close to 60 companies in 20 countries.

“Our mission is to accelerate the development of a better financial system. We build and support bitcoin and blockchain companies by leveraging our insights, network, and access to capital,” states DCG.

“We believe that digital currencies, distributed ledgers, and smart contracts will transform financial services. DCG’s mission is to help build the foundation for the blockchain industry.”
— – Barry Silbert, CEO and founder at Digital Currency Group

The Draper Fisher Jurvetson (DFJ) Growth Fund, led by the prominent blockchain investor Tim Draper, made one of the largest blockchain investments last year, backing the wallet and exchange service company Coinbase, to the tune of US$75m.

Bnk To The Future has also entered into the FinTech investment sector, and many of the projects selected are blockchain solution focused. “We believe that the future of finance looks very different to how it looks today and we offer qualifying investors the opportunity to invest in the companies and products that are building the future of finance,” states the company.