News Briefing - Crowdfunding, SME And Alternative Finance

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The essentials are here and will be regularly updated. If you want to be well-informed about the investment crowdfunding scene, and you're short of time, this is the place to visit.

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1.UK – P2P

 

P2P Finance News reports:

 

“FUNDING Circle has been named one of 12 finalists in a nationwide fintech competition targeting small business banking.

Run by Nesta, the UK’s innovation foundation, the finalists will participate in the last phase of the Open Up Challenge – a £2.5m prize fund backing the next generation of financial technology for small businesses.

As well as small business peer-to-peer lender Funding Circle, the finalists include small business funding aggregators Funding Options and Swoop; Open Banking technology provider OpenWrks; and personal finance app Bud.

Read more: Funding Circle scraps downloadable loanbook

The finalists, who were selected by an independent judging panel, will each receive a £100,000 grant, access to Open Banking data and support to bring their products to market. Five or six of the finalists will go on to win a further £200,000 each at the end of the year.

The challenge is part of the Competition and Markets Authority’s (CMA) package of remedies to shake up the UK retail banking market.

The competition searched for teams building innovative products and services that will help small businesses save time and money, find better services, reduce stress and discover the intelligence in their financial data.”



2. International – P2P

 

Silicon Republic reports:

“Peer-to-peer (P2P) lending platform Linked Finance has obtained €50m in backing from Portugal-based digital bank Banco BNI Europa.

The digital bank will deploy up to €5m over a two-year period to lend to Irish SMEs.”


 

3. International – AltFi

 

 

IVCA director general Sarah-Jane Larkin warns that with Brexit and EU tax harmonisation looming, Ireland needs to get serious about backing its start-ups and SMEs, according to Silicon Republic.

“The recent funding results from the Irish Venture Capital Association(IVCA) ought to have sounded triumphant when you consider that funding levels for Irish tech firms surpassed €1bn in just one year.

Reading between the lines, however, the results revealed that the figures were skewed by two massive €100m-plus deals and that, if anything, the Irish tech start-up community is heading directly for a seed funding time bomb as State-backed funds leveraged by venture capitalists (VCs) peter to a halt.”

 

4. International – FinTech

 

Raconteur offers a consumer-facing overview of cryptocurrencies.

 

Bitcoin Pizza Day, celebrated on May 22, commemorates the first real-world cryptocurrency transaction, completed on that date in 2010. Laszlo Hanyecz exchanged 10,000 bitcoins – then the equivalent of $80 and now worth around $70 million – for two large pizzas. 

Facilitating the purchase of an Italian cheese-and-tomato-based food staple is unlikely to have been what Satoshi Nakamoto had in mind when publishing the bitcoin white paper in October 2008, before mining the genesis block and launching the network the following January. 

However, it’s impossible to know for sure, because Nakamoto has remained both anonymous and silent since establishing the original cryptocurrency, which has now spawned more than 1,500 others. In the eight years since Mr Hanyecz’s pizza purchase, the value of cryptos, both financially and in terms of benefitting society, has expanded exponentially. 

How cryptocurrency can be a force for betterment 

Even now, at this relatively early stage of development – some call it “the 1994 of the internet” –there is a multitude of examples, all over the globe, showcasing how cryptos can be a force for betterment. 

“We are already seeing social-impact solutions that otherwise wouldn’t be possible without cryptocurrency technology, such as expediting the sustainable transfer of aid and providing secure government services,” says Doug Galen, lecturer at Stanford Graduate School of Business and chief executive of RippleWorks, an organisation that pairs startup and technology experts with social ventures around the world. 

“When applied in the right use-cases, we may well see cryptocurrency do to certain industries what the internet has done to how we access information or what mobile technology did to how we connect people.” And that may be what the people behind bitcoin were striving for. 

In Nakamoto’s white paper, Bitcoin: A peer-to-peer electronic cash system, the author proposes “a purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution”. 

The white paper posits: “No mechanism exists to make payments over a communications channel without a trusted party. What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. 

“Transactions that are computationally impractical to reverse would protect sellers from fraud and routine escrow mechanisms could easily be implemented to protect buyers.” 

Cryptocurrency: the future of money for the developing world

Bitcoin and more advanced cryptos have solved a number of the issues outlined by Nakamoto, thus causing even sceptics to concede that this form of digital currency could well be the future of money. With an inbuilt safeguard against fraud and false identity, thanks to the blockchain ledger technology underpinning bitcoin, greater transparency, plus lower fees for cross-country transactions, and by being free from government interference, cryptos have begun transforming payment systems in emerging markets. 

Moreover, it is estimated there are approximately 2.2 billion individuals with internet access, via smartphones and similar devices, but without access to a traditional financial exchange, making them prime targets for the cryptocurrency market. 

Ian Bradbury, chief technical officer of financial services at Fujitsu, says: “The most obvious developing social value use-case for a ‘stored value’ solution is in the area of identity. Although you may not see identity as a cryptocurrency, it certainly has significant value to an owning individual and it is frequently shared with others in a controlled way to gain access to many services, for example border control, right to work, education, healthcare, financial services, benefits and many others. Now, very basic forms of identity management are being implemented to help refugees, for instance.” 

 

5. International – FinTech

 

Business Insider reports.

‘On Wednesday, Microsoft announced the acquisition of Bonsai, an artificial intelligence startup based in Berkeley, California.

Terms of the deal were not disclosed. All told, Bonsai had raised a relatively modest $13.6 million since it started up in 2014. 

There are a few notable things about this acquisition. First, Bonsai was an investment from Microsoft Ventures, which has since renamed itself M12. Plus, Bonsai CEO Mark Hammond is himself an ex-Microsoft employee, working on Windows 95 and the first-ever version of Internet Explorer. 

Second, Bonsai's whole business is built on TensorFlow — a free, open source artificial intelligence technology originally created at Google, which has gone on to become mega-popular with software developers. TensorFlow is actually an alternative to Microsoft's own CNTK toolkit for AI developers.

Still, when Bonsai raised its last funding round in 2017, Hammond told Business Insider that Microsoft didn't consider the fact that it was powered by Google to be a dealbreaker. Microsoft is more interested in serving its customers than pushing any one technology, Hammond said.”