The Delhi-based residential incubator Satoshi Studios is focused on blockchain startups across India and South-East Asia.
Following demonetisation, the e-wallets saw a sudden surge in India, and since then they’ve grown exponentially. Today, however, blockchain — a distributed database that maintains continuously growing list of records — seems to be name of the game. An article in Wired says that bitcoin has a market cap of $5 billion. There are also several merchants like Newegg, Dell, Expedia, Overstock and Microsoft who are accepting bitcoin as a possible form of payment for their product.
In a white paper on application of virtual currencies, RBI’s research wing, the Institute for Development and Research in Banking Technology, claims to have successfully concluded proof of concept (POC) studies using blockchain technology for trade finance applications.
The paper claimed that the POC was run in concert with the National Payments Corporation of India and banks like Citibank, Deutsche Bank and HDFC Bank. It isn’t just the large banks and corporations looking at blockchain; there are several startups cropping up in the space as well.
It was looking at this that 27-year-old Nikunj Jain, 26-year-old Sahil Baghla and 24-year-old Ayush decided to start Satoshi Studios, a blockchain incubator in Delhi. The first batch is set to start at the end of March.
Prior to launching Satoshi Studios, Sahil along with Ayush, both alumni of IIT Kanpur, had co-founded two startups, Bluegape and Murmur. Bluegape was started as a college dorm room project, and both the projects went onto raise multiple rounds of investments from over 30 investors. Nikunj, an IIT Delhi alumni, has been an angel investor at various startups.
The trio have in their startup experience worked with various bitcoin and blockchain companies. Nikunj adds that they were getting several funding inquiries. They figured that there is a huge demand for an incubator or an accelerator that can provide the initial seed fund, right guidance and a proper infrastructure.
These inquiries were primarily from India and South-East Asia. That is why Satoshi Studios was launched as an initiative to cater to the blockchain startups in the Indian and South-East Asian region.
Also, the team believes that most of the problems that are prevalent in India are prevalent in South-East Asian countries, and launching an incubator and a startup support system in either of these locations would benefit these blockchain startups, and help them grow and provide solutions in these regions. Says Nikunj,
“Moreover, at this stage we have built a blockchain community in India consisting of various developers, entrepreneurs, strategists and even investors so a startup that is selected would be able to leverage this community support that we have India.”
The incubator has got backing from Roger Ver, who is known to be one of the earliest investors of the first-generation Bitcoin businesses, Amit Bhardwaj, who is leading the Bitcoin adoption in India, and Michael Terpin, co-founder of BitAngels, the first angel network for investments in bitcoin/digital currency companies.
The team is working along the lines of a three-month residency programme in Delhi, where startups will get mentorship, guidance and funding assistance. At the incubator stage, the team is looking at various tangible and intangible factors, such as team dynamics, startup vision, short- and long-term goals, founders' ability to be flexible and receptive to new ideas, team's determination to grow from a startup to an organisation and actually solve a real-world problem using blockchain.
“The idea/concept that a team is building is important but not the most important parameter for selection, as at this stage an idea can go through a lot of changes and that is something we at Satoshi Studios understand and acknowledge,” says Nikunj. To begin with, the team will launch two batches every year.
The startups will get an office space, living space and technical and strategic guidance. Satoshi Studios will also provide an initial seed capital of $50,000 for each startup for an equity of 8-15 percent. “We would be taking an equity in each startup against the monetary and non-monetary support we provide. The equity would help us create future cash flows through exits or dividends,” says Nikunj.
The team believes that systems written of blockchain are poised to solve Internet’s biggest problems of privacy, security, and inclusion. Blockchain can eliminate the middlemen in any industry that relies on data integrity. Apart from Satoshi, another accelerator focused on Bitcoin and blockchain startups and following a sector-agnostic approach is TwentyThirty.
However, globally, one of the biggest concerns the technology gives rise to is that it follows a decentralised payment system, which operates independently of any government or central bank. The article in Wired said that since people can exchange on a peer-to-peer basis without passing through any financial intermediary, the Bitcoin network doesn’t reside under any given regulation, and can also be constructed to be agnostic to any jurisdictional rules.
“There are very few who understand blockchain in South-East Asia. We believe that with our expertise in blockchain, we can create an ecosystem in New Delhi which can accelerate the journey of blockchain startups in this region,” concludes Nikunj.