The ICO is one of the hottest financial trends, breaking the VC model of investment, allowing basically anyone to raise money through a digital tokens offering or to participate in such a financial round. Just last week around 65 startups raised money through an ICO, and in total, 140 startups raised about $2.1 billion so far.
But who are the startups raising these flash rounds, and how do they perform? Two of them, Bancor and Omise, were at the center of a discussion during the latest TechCrunch Disrupt event earlier this week. Eyal Hertzog, co-founder of Bancor and Jun Hasegawa, CEO of Omise both raised an aggregated $175 million in ICOs, claimed that people buy tokens as they buy currency: because they believe in the future of the body that issued them.
According to them, an ICO is not only a mechanism for fundraising but also a way to make the ecosystem around a company be a part of a company’s success: professional investors, customers, suppliers – basically anyone. Unlike IPOs, token holders can immediately liquidate their tokens with the aid of other companies working with the startup (e.g. developers or retailers), or with other token holders who engage with the startup.
People who bought Bancor and Omise’s tokens must be curious to know how they perform, besides knowing their token price. Luckily, we have Emmet, the digital company analyst to help us analyze their momentum using NLP and AI technology.
Emmet is an AI powered digital company analyst, now accessible for everyone from Zirra’s website. He understands simple English and can answers questions such as “Give me facts for Uber,” “What are the risks for Slack?” Show me traffic for Airbnb,” “Is Coursera hiring?” and “Who is competing with Palantir?”
We asked Emmet a few questions to dive deeper into Bancor and Omise. Here are some of the most interesting insights we got back. The output of the two queries shows both startups share common challenges and opportunities: They both lack patents or trademarks, they experience a high level of competition, and they suffer from a low level of partnership with other companies. Considering the fact that their mission is to create an ecosystem of developers, apps and services that use their tokens to create value, this is something both should take seriously.
Risks and Challenges for Bancor – By Emmet
Although, both have raised a significant funding round, larger than most of their competitors, and Emmet acknowledges the fact that both are among the top three of their niche in terms of funds raised.
Bancor created a protocol to standardize the creation of tradable tokens, beginning with Etherium. According to its founders, Bancor promotes the liquidation of every digital good. Omise is an online payment gateway offering a wide range of processing solutions focused around Southeast Asian businesses.
Risks and Challenges for Omise- By Emmet
Let’s get a closer look at each company’s traffic, by asking Emmet to show the traffic of both Bancor and Omise.
The output shows an uptick in Omise’s traffic from 20,000 visitors in March 2017, to 40,000 in July, and than up to 100,000 visitors last month. The trend is steady in both mobile and desktop traffic. In contrast, Bancor’s traffic has seen better days. It created a massive interest in its token last June when the company announced the biggest ICO to date, $150 million, but lost momentum right afterwards. In fact, Bancor’s traffic returned to its pre-announcement days. Bancor’s valuation is now two thirds of its valuation at its ICO (0.007 ETH today). However, Omise’s valuation is now about a quarter of its valuation at ICO (0.0025 ETH).
Blockchain technology startups that have raised funds through ICOs are catching the the eye of the media, challenging the VC industry and the way in which companies are contracting with their investors. However, most of these companies are too young and not yet ripe for the picking, with little sign of success, except for their large ICO.
I’m actually sad that the main “blockchain panel” at #tcdisrupt is about ICOs. They are legitimate but currently quite overemphasized
— Vitalik Buterin (@VitalikButerin) September 18, 2017