Bitbond
Today we announced our investment in the Berlin-based startup Bitbond, a marketplace for bitcoin-based p2p loans. Bitbond has a very bold vision to create a global lending marketplace, enabled by the revolutionary bitcoin technology. We are very happy to support the visionary founders, Radoslav Albrecht and Robert Nasiadek on their journey.
Here are a few words explaining why we think there is a great opportunity in front of Bitbond and the team.
A truly international lending platform
While p2p lending is a somewhat established and successful concept and while lending is happening all over the world and is one of the oldest documented businesses out there, it is to a very large extent a local business. So German lenders tend to lend to German consumers and (especially small) businesses, US lenders to the American ones, etc. There are many reasons for that, but one of the key reasons is that transaction costs for international money transfers are disproportionately high, especially for lower amounts. Transferring bitcoin is very cheap and fast, no matter where the sender and receiver are located. It is Bitbond’s mission to make financing and investing globally accessible by leveraging bitcoin as a platform.
And the global lending market is MASSIVE. It is in the 100s of billions a year and, as many startups have noticed, it only waits to get disrupted. On top of the “current” market size being already pretty big, Bitbond can enable new lending markets in places where they might not exist today. The next point explains how.
Independent of banking infrastructure
Borrowing money typically requires a bank account. Majority of the globe’s population does not have one. Thus, most of the global population does not have access to credit. Thanks to bitcoin, ANYONE in the world can start borrowing on Bitbond without the prerequisite of having a bank account.
Giving people the opportunity to invest their money can turn out to be just as important. Many people have to put their savings under their mattress where they get eaten up by inflation. For example, many African countries have inflation rates above 10% p.a. and without a bank account which returns you at least the inflation rate, it doesn’t really make sense to save.
The whole topic runs under the keyword ‘financial inclusion’. There are many initiatives around this, like this one. You can have a look at these maps to understand the challenge a bit more.
There is a chance that bitcoin and platforms like Bitbond can be more effective at tackling these challenges than some of the global top-down programs. Admittedly, using Bitbond and bitcoin requires access to the Internet - luckily google and facebook are already working on this one.
General bitcoin opportunity
While cryptocurrencies like bitcoin are still in their early stages of development, there is a chance that they will become more prevalent and have significant impact on the world of finance. Bitbond is well positioned to benefit from positive developments in this field and play a significant role in them, primarily as a lending platform, but potentially by enabling further financial services on top of the bitcoin / cryptocurrency infrastructure.
For us, Bitbond represents a perfect early stage investment opportunity. It had some early success, it has a small, yet great team; it is a marketplace and we like marketplaces; it still entails significant risks and unknowns, but offers amazing upside if things go well. We are looking forward to the journey with Bitbond!
P.S. Yes, there also is some early competition - check out Bitlendingclub and BTCjam. The market is so early and so big, that I am sure that there is enough space for a few players.
Here are a few words explaining why we think there is a great opportunity in front of Bitbond and the team.
A truly international lending platform
While p2p lending is a somewhat established and successful concept and while lending is happening all over the world and is one of the oldest documented businesses out there, it is to a very large extent a local business. So German lenders tend to lend to German consumers and (especially small) businesses, US lenders to the American ones, etc. There are many reasons for that, but one of the key reasons is that transaction costs for international money transfers are disproportionately high, especially for lower amounts. Transferring bitcoin is very cheap and fast, no matter where the sender and receiver are located. It is Bitbond’s mission to make financing and investing globally accessible by leveraging bitcoin as a platform.
And the global lending market is MASSIVE. It is in the 100s of billions a year and, as many startups have noticed, it only waits to get disrupted. On top of the “current” market size being already pretty big, Bitbond can enable new lending markets in places where they might not exist today. The next point explains how.
Independent of banking infrastructure
Borrowing money typically requires a bank account. Majority of the globe’s population does not have one. Thus, most of the global population does not have access to credit. Thanks to bitcoin, ANYONE in the world can start borrowing on Bitbond without the prerequisite of having a bank account.
Giving people the opportunity to invest their money can turn out to be just as important. Many people have to put their savings under their mattress where they get eaten up by inflation. For example, many African countries have inflation rates above 10% p.a. and without a bank account which returns you at least the inflation rate, it doesn’t really make sense to save.
The whole topic runs under the keyword ‘financial inclusion’. There are many initiatives around this, like this one. You can have a look at these maps to understand the challenge a bit more.
There is a chance that bitcoin and platforms like Bitbond can be more effective at tackling these challenges than some of the global top-down programs. Admittedly, using Bitbond and bitcoin requires access to the Internet - luckily google and facebook are already working on this one.
General bitcoin opportunity
While cryptocurrencies like bitcoin are still in their early stages of development, there is a chance that they will become more prevalent and have significant impact on the world of finance. Bitbond is well positioned to benefit from positive developments in this field and play a significant role in them, primarily as a lending platform, but potentially by enabling further financial services on top of the bitcoin / cryptocurrency infrastructure.
For us, Bitbond represents a perfect early stage investment opportunity. It had some early success, it has a small, yet great team; it is a marketplace and we like marketplaces; it still entails significant risks and unknowns, but offers amazing upside if things go well. We are looking forward to the journey with Bitbond!
P.S. Yes, there also is some early competition - check out Bitlendingclub and BTCjam. The market is so early and so big, that I am sure that there is enough space for a few players.
P.S.2 Radoslav is also a very good at giving presentations around bitcoin and related topics, like the one below. Check it out.