Interview: Blockchain Valley Ventures’ Expansion into Asia Pacificby Fintech News Singapore September 7, 2020
Blockchain Valley Ventures recently welcomed Credit Suisse Private Banking’s former Global Head of Investments, Thomas Amstutz to the company as part of its growing presence in the Asia-Pacific region. Having both relocated from Switzerland to Singapore, Fintechnews.sg sat down with Leeor Groen, APAC Managing Director, and Thomas Amstutz, APAC Chairman, to learn more about their plans for the region.
Blockchain Valley Ventures (BVV) is a Swiss-based venture capital firm and corporate finance advisor fully dedicated to emerging financial technology and blockchain. It has offices in Zug, Zurich, and Singapore and partnerships in London, Frankfurt and Israel. A member of the Draper Venture Network (DVN), BVV is the only Swiss firm in the global alliance of leading venture investors collectively managing more than $2bn.
What is the vision of BVV?
Leeor Groen (LG): Our mission is to be the most relevant investor and dealmaker in the industry. The core of the BVV team comes from the Swiss financial industry and moved into this space in order to deliver on the opportunity to bridge the traditional and emerging financial markets. In our backyard around Zug and Zurich, we saw the likes of Ethereum, Tezos, and Bancor emerge.
They all set up their foundations and raised considerable sums of capital to pursue their ambitions of new financial systems. We wanted to bridge these ecosystems and support the industry to deliver on this opportunity. This is why we engage with innovative companies in the space from an early stage through direct investments and support them throughout their journey with our corporate finance practice.
What are the opportunities that BVV is targeting and what separates it from other venture firms?
Thomas Amstutz (TA): Focus. We see ourselves as the natural partner for private wealth and family offices who are looking for alternative asset exposure in an emerging industry as we are 100% dedicated to it. Naturally, bitcoin and other digital assets are a key entry point but this represents just one avenue to participate in the rapidly emerging financial technology ecosystem.
In fact, we partner with leading infrastructure players in the industry who are offering crypto or digital asset exposure. We complement this with a more comprehensive alternative asset strategy which also covers private equity and venture capital opportunities that emerge as the entire industry evolves.
Could you walk us through your journey to be a bridge between Switzerland and Asia for both investors and tech companies?
LG: While most companies today operate in a digital world, there are clear trends that develop faster in certain regions compared to others. By having people on the ground in two of the most significant regions, we are able to capture market developments in a timely manner and offer them to our investors before they become mainstream on a global scale. This applies equally to the portfolio companies that we support; By having an extended network across continents, we are able to assist when it comes to geographical expansion and connect our startups to the most relevant counterparties in the region.
What are the biggest trends and opportunities that you see in the fintech space?
TA: In the blockchain universe, there is an explosion in the Decentralized Finance (DeFI) space and we consider this as part of the longer-term trend towards embedded finance; where every stakeholder is enabled to provide financial services. We see increased sophistication in emerging financial markets through the introduction of lending and investments and companies like Slice or Shopify that have nothing to do with fintech adding financial products to better serve their customers.
As technology companies continue to add financial services, they not only increase revenue per customer, but they make viable opportunities in markets previously deemed too small or not cost-efficient to acquire customers. As investors, we are excited to see the development of embedded finance help the next generation of technology companies realize their potential.
With Tim Draper and Gabe Turner driving the DVN out of the Bay Area, we complement this with our bases in Switzerland and Singapore.
BVV has made eight investments in the blockchain space so far, what other acquisitions are you potentially targeting? What is your normal investment size?
LG: We have so far backed eight companies and have approved two further investments which are to be announced shortly. Including our first few deals in the Asian market. We are very bullish on opportunities in the APAC region as large parts of the population have embraced digital technology in their daily lives. This opens the door to a more diverse set of financial infrastructure compared to developed markets, where disruptors have to face well-capitalized incumbents. As we target early-stage opportunities, we initially invest between USD 250 – 500k and play an active role in helping shape the strategic direction of a business.
How has the decision to join the Draper Venture Network (DVN) impacted BVV and its investment approach?
LG: Given our industry specialization, we look to back the emerging category leaders in the key segments we identify, irrespective of where they are geographically. This is why we employ a co-investment strategy and work alongside other leading investors to support selected portfolio companies. With Tim Draper, who is himself one of the most active investors in the blockchain ecosystem, and Gabe Turner driving the DVN out of the Bay Area, we complement this with our bases in Switzerland and Singapore. The DVN therefore gives us coverage of the North American market and global exposure to deals where there is obviously a huge pool of opportunities.
Due to the current crisis, most investors have opted to focus on more mature companies instead of early-stage startups? Would BVV be taking the same approach as well?
TA: The entire private equity industry has held up remarkably well for what is such a large economic disruption, and there has been record capital being deployed in Q2 2020 across Europe, North America, and Asia. That being said, the risk appetite among the investors has certainly been closely monitored with a focus on supporting existing companies rather than new. At BVV we believe the long-term winners and emerging category leaders in the financial industry already exist and we are working to support them and ensure they have every chance of success. Our commitment to the sector means we are interested in the entire growth stage of the industry and are focusing on opportunities across the entire spectrum.