What is one of the world’s biggest Blockchain startups doing in India?
The year was 2014, and Joseph Lubin, one of the eight co-founders of the Ethereum Blockchain, was convinced that unless he built a sizeable population of developers on the network, the average person would never realise the power of Ethereum.
With that idea, he founded ConsenSys. The New York-based startup looks to build, consult for, and launch decentralised applications on the Ethereum Blockchain network. The company started with an incubation lab, where developers created projects on various solutions from citizen journalism to land registry. In a few years, the lab was helping companies with big projects.
By 2016, demand was high and the system needed more developers, leading to setting up of the Ethereum Blockchain education arm called the ConsenSys Academy. When developers from the academy started their own businesses, ConsenSys formed ConsenSys Ventures in 2017 to complete its ecosystem. ConsenSys Ventures is a strategic fund that looks to invest in decentralised technology sector businesses.
Today, ConsenSys doesn’t just provide solutions to Fortune 100 companies, but goes beyond and works with policy makers and governments to deploy the best solutions possible on Ethereum, an open-source Blockchain computing platform with smart contract functionalities. The company’s partnerships include those with the Indian government think tank Niti Aayog, the Singapore government, the European Union, among others.
Today ConsenSys’ advises businesses and institutions on how to implement Ethereum, disrupting old processes while decentralising it to create transparency and authenticity to the systems. The company then helps inn building from a concept stage to delivery.
ConsenSys has also signed an MoU with the Andhra Pradesh government to set up Blockchain-centric education programmes.
In a conversation, Kavita Gupta, the Founding Managing Partner of ConsenSys Ventures, speaks about the company’s India strategy and the opportunities it looks to tap.
Following are edited excerpts of the interview:
YS: What potential did ConsenSys see in India to set up operations here?
Kavita: In January, Joe (Joseph) and I were invited for a dialogue by the Andhra Pradesh government, and we realised that people here know and somewhere understand Blockchain, but there wasn’t much implementation we could see. We thought the biggest gap was the good old education system. That made us realise we need to start our education programmes here.
We will soon be starting the Ethereum developer training programme in India. For the first batch, we sought talent pan-India, and received close to 1,800 applications. Of this, we came up with the first batch of 45 students. Further, this talent will see the best of Ethereum experts coming down and taking sessions. Our aim is to build a strong workforce and keep building on it.
YS: Will you absorb this talent for ConsenSys’ Indian operations?
Kavita: Why not? Hopefully we will be absorbing all of them.
YS: What are the areas where you see high potential for disruption with the Ethereum Blockchain?
Kavita: We are seeing interest from all corners, right from the public to the private sector, including various government bodies.
The ecommerce and banking sectors are really growing. Some obvious used cases are custodian and settlements in banking, and authentication of education records among other sectors. Blockchain as an infrastructure has scalability issues, we are receptive to it, and want to optimise it in the right way for our clients.
But despite multiple offers, we haven’t started the implementation of our solutions yet because we first need to build a workforce here. And we don’t want to outsource these projects outside, but rather build in India. Presently, we have finalised Delhi as our office in India and will be looking at another location in South India.
YS: Could you cite some opportunities that you see from the government?
Kavita: To start with, a strong used case we are seeing is in land registry. For governments, we have seen maximum interest in implementation of Blockchain around supply chain, health records and land supply. These areas essentially include verification through electronic records.
When we compare this to the private sector, there is a contrast as private players are looking at implementation around data.
YS: What are the other geographies you see in South Asia for expansion?
Kavita: We already have offices in Singapore, and have just started one in the Philippines. We are now looking to open an office in Japan as well.
YS: You have a $50 million venture fund in the form of ConsenSys Ventures. What are your investment plans?
Kavita: We will have our own innovation lab in India, and want to support those ideas by financing them. That is the testimony to developers being one of the biggest brain power in India. Of the $50 million, we have already invested $8 million in global startups.
We invest in pre-seed and seed stage companies however it completely depends on the potential of the idea and the team driving it. We invest anywhere from $250,000 to $1 million. Though $500,000 is our sweet spot.
But we have five projects we are closing right now, which will take our total investment to $10 million within a month or two.
We are also launching our accelerator called Tachyon, where the idea is to build on the Ethereum community. It is an eight-week programme to build a minimum viable product. The first programme will be held between September and October, and the Demo Day will be held in November.
YS: Finally, what are the challenges to invest in these companies?
Kavita: Though the Blockchain industry is growing a fair bit, it is still largely in its early days. As such, we see a lot of companies with great ideas, but the founders do not have the requisite experience and managerial skill to see the project through. The greatest challenge was to figure out ways to help them flourish and grow beyond a token launch.
As the sector matures, we are seeing a paradigm shift in the emergence of seasoned entrepreneurs and technologists launching startups in this space; many of whom we have invested in. For instance, Vault was started by senior engineers from Facebook and Google, and Dada was incepted by a team that has already turned a company around.