Business Irish

Saturday 17 November 2018

Startups duo in €19m ICO for crypto exchange

Founders of hotel booking app aim to make it easier to trade cryptocurrencies, writes John Reynolds

Joe Haslam
Joe Haslam

John Reynolds

Irish serial entrepreneurs Joe Haslam and Conor O'Connor are raising up to €19m in an initial coin offering, ahead of the launch next month of Local Token Exchange (LTE), a decentralised cryptocurrency exchange they have founded that makes it easier for people to trade various types of the digital currencies.

The pair, who are based in Spain, previously founded hotel booking app Hot Hotels in 2012.

It continues to operate after they raised €1.8m in seed funding and were accepted into a US tech startup accelerator, Techstars, in 2015.

Corkman Haslam lectures in entrepreneurship and scaling up businesses at the IE Business school in Madrid. O'Connor, who is from Wicklow, previously sold a hotel booking business to Norwegian group Schibsted.

"Most crypto transactions at the moment take place on centralised exchanges. Our approach is peer-to-peer and it democratises the process. Our transactions take place using smart contracts and Escrow. There are very few decentralised exchanges currently operating," said O'Connor.

"We aim to enable trading in over 100 cryptocurrencies by the end of the year. Most exchanges allow a lot fewer. It's estimated that there were up to 30,000 ICOs last year, while there are currently up to 1,000 per month," he added.

The money raised will be used for development, marketing and maintenance, he said. LTE currently employs a team of nine, which it aims to double, and has six advisers.

Haslam added: "This is essentially just another platform in the same way as Hot Hotels is.

"When my students look at what's happening in Venezuela, say, or the fact that the Turkish lira lost 20pc of its value against the dollar this year, I lose their interest very quickly talking about the traditional worlds of finance and accounting when crypto allows a 21-year-old to raise $25m in 15 minutes, as Reuters reported last year.

"It's possible that startups will increasingly be financed this way."

Earlier last week, Limerick billionaire Patrick Collison, co-founder of payment giant Stripe, said that people who make money from crypto are likely to represent a new breed of investors in startups. "Thanks to crypto, the kind of people who hung out on Bitcointalk in 2012 are going to be allocating a lot of capital in coming decades. One of the biggest spillover benefits of the space may be all the weird stuff they choose to back next," he tweeted.

The owner of the New York Stock Exchange is reported to be setting up a crypto trading platform targeting institutional investors - something that may increase the currencies' liquidity.

ICOs, which are regarded as a high-risk investment, involve selling digital tokens or coins.

The process doesn't involve debt being issued or shareholders selling equity in most cases.

Sunday Indo Business

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