Hopeful Australian blockchain startups will now have access to part of a $US70 million ($92 million) investment fund to fuel development of local companies, provided by the company behind one of the world’s largest cryptocurrencies.
The NEM.io Foundation is based in Singapore but has expanded into Australia over 2017 to promote and encourage development on its NEM blockchain. The company announced the multimillion-dollar fund this week and has already locked in a $650,000 investment in local IP-focused blockchain startup CopyrightBank.
Speaking to StartupSmart, CopyrightBank founder David Oh explains what sets the NEM blockchain apart from the technology behind cryptocurrencies such as Bitcoin and Ethereum.
“For Bitcoin, you need someone with a deep understanding of cryptography to make it anything beyond a digital store of value, and for Ethereum you need a developer proficient in Solidity, which isn’t so easy to program in,” Oh says.
“NEM works via APIs (application programming interfaces), so you’re not actually programming the blockchain itself. You can write in any language you want, Javascript, Ruby on Rails etcetera, and it just interacts through the APIs.”
This ease of access is why Oh thinks Australian startups should take advantage of the fund provided by the NEM.io Foundation, saying the blockchain space is moving “very fast, so don’t wait”. The company is dedicating around $13 million worth of XEM tokens to Australian startups, which are also required to be “active members” of the NEM community.
Oh says the funding is decided through community voting, with companies posting the concept for their startup on the NEM community forums, which are then voted on by users. Top companies are then presented to the Foundation, which carries out due diligence before issuing the funding in XEM tokens in line with the company achieving milestones.
“The reason we established this fund is because we believe that blockchain can truly transform the way businesses operate, and we see the rise of the XEM cryptocurrency as a way of giving back to the community,” global director of partnerships and strategic alliances at the NEM.io Foundation Jason Lee told StartupSmart.
NEM is currently the 12th largest cryptocurrency by market cap and the price of the token has risen over 6000% this year. It’s currently sitting at 20c.
“We want startups who can really work on applications that would benefit society and solve a fundamental problem for Australians,” Lee says.
With arms across the Asia Pacific region and experience in the US, Lee and the NEM.io Foundation have been exposed to multiple blockchain markets, and Lee believes Australia’s stacks up “very well” against the rest of the world.
“We are in a very good position. Our ecosystem is very conducive to growth with things like FinTech Australia, the Australian Digital Commerce Association, and large corporates who are actively engaging in blockchain technology,” he says.
“The government is taking steps to embrace the technology too. We welcomed the removal of double taxation on Bitcoin in this year’s budget, but we think it’s just the start of the government beginning to engage further with the community, and we’d like to continue to discuss with them how they can achieve this.”
Lee says he’s seeing the demand and interest for blockchain and cryptocurrency-focused startups continue to increase, saying there’s a number of recent Australian ICOs that have tried to do things “by the book”, compared to some less scrupulous ones seen overseas. He believes this is in part due to the Australian government taking a less restrictive approach to ICOs, compared to places such as China.
The amount of ICOs undertaken locally will exponentially increase over 2018 says Lee, which he hopes will set good precedents in the space as ways to use blockchain technology as a way to solve real-world business problems.
“I’d like to see solutions coming out of Australia’s core industries, like mining, agriculture, and tourism. I see a lot of good synergies there,” he says.
Meanwhile, Australia’s first cryptocurrency asset fund is set to launch over the coming months, with Apollo Capital looking to raise $30 million from wholesale investors to invest in digital currencies such as Bitcoin and Ethereum.
Chief investment officer Henrik Andersson told StartupSmart the fund will aim to give traditional investors an easy foot in the crypto market door, saying its hard for them to get exposure to cryptocurrency.
“We’re seeing more and more interest in the space all the time, especially with CME about to launch Bitcoin futures. I also predict we’ll see a Bitcoin ETF in the next one to two years,” he says.
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