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Share Name Share Symbol Market Type Share ISIN Share Description
Coinsilium Group Limited NEX:COIN NEX Ordinary Share VGG225641015
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.20p -6.78% 2.75p 2.50p 4.50p 2.95p 2.70p 2.95p 62,076 14:41:31
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Coinsilium Group Limited: Strategic Business Update

14/01/2019 7:02am

UK Regulatory (RNS & others)


Dow Jones received a payment from EQS/DGAP to publish this press release.

 
 
 Coinsilium Group Limited (COIN) 
Coinsilium Group Limited: Strategic Business Update 
 
14-Jan-2019 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
14 January 2019 
 
                          COINSILIUM GROUP LIMITED 
 
                      ("Coinsilium" or the "Company") 
 
                         Strategic Business Update 
 
Coinsilium Group (NEX: COIN), the blockchain venture builder, advisor and 
investor which manages and finances the development of early stage 
blockchain technology companies, today announces a Strategic Business Update 
for shareholders, incorporating a review of 2018 activity and an outline of 
the Company's plans for 2019. 
 
Eddy Travia, Chief Executive Officer of Coinsilium, commented: "As the 
blockchain industry matures, it is starting to attract an increasing number 
of well-funded institutions and Coinsilium's track record of identifying 
high quality early stage opportunities, such as RSK and Factom, is well 
known in the industry. 
 
In 2019, our key priorities will therefore be to clearly demonstrate to the 
market the potential we see in the companies within our investment portfolio 
and to continue to build-out various new initiatives to take full advantage 
of a rapidly expanding blockchain industry. 
 
As a company, Coinsilium is exceptionally well positioned with a robust 
financial model and an ability to leverage shareholder returns at an 
exciting time in the blockchain industry. However, we recognise the 
challenge that the market has in valuing early stage blockchain-based 
companies, particularly as there are so few benchmarks. That said, the 
sector has seen some remarkable valuation uplifts in relatively short 
timescales as companies have proven their viability. Therefore, we will work 
to ensure that Coinsilium's market valuation better reflects the value of 
our current business and its future potential in 2019. 
 
I trust the information provided in this update will be useful for 
shareholders and potential investors, to better understand our current 
position and our strategic and operational plans for 2019 and beyond." 
 
Blockchain Investment Environment in 2018 
 
The Company has observed record levels of institutional investment in 
blockchain companies over the past twelve months. This echoes a report 
published in October 2018 by blockchain research group, Diar, outlining that 
Venture Capital investment in blockchain companies was up by 280% so far in 
that year. Coinsilium believes that increased interest in the sector has had 
a positive effect on the overall valuations of blockchain companies and the 
Board therefore looks forward to the next twelve months with confidence. 
 
The Company witnessed the blockchain sector mature significantly in 2018 and 
was able to take advantage of a vibrant market at the beginning of the year 
through a number of new client acquisitions. Following recent market shifts, 
Coinsilium adjusted its criteria for on-boarding new clients, focusing on 
businesses for which blockchain technologies are an intrinsic element of 
their business models. The Company continued to make good progress and 
generate revenue, notwithstanding the slowing of business as a result of 
increased regulatory scrutiny of the industry and a downturn in 
cryptocurrency and token prices from July 2018. 
 
The Company invested in innovative blockchain-based start-ups and SMEs 
within a number of sectors including financial services, fintech and health. 
All investees increased their user-base and achieved growth towards their 
strategic objectives over the last year. 
 
Coindesk Article: 
https://www.coindesk.com/vc-investment-in-blockchain-startups-is-up-280-so-f 
ar-this-year [1] 
 
Coinsilium Share Price Review 
 
Over the past year, we have seen a strong correlation between the share 
price of Coinsilium and the price of cryptocurrencies. Whilst Coinsilium's 
focus has always been on the underlying blockchain technology and not the 
cryptocurrencies per se, given that, until recently, a significant 
proportion of Coinsilium's advisory revenues and success fees have been 
denominated in cryptocurrencies, it is understandable that the market would, 
to some degree, see fit to conflate the two. 
 
Over 2018, the price of bitcoin has fallen from US$19k to under US$3.5k and 
now sits at circa US$3,600 (at the time of writing). In the short to medium 
term, should cryptocurrency market conditions continue to improve, 
Coinsilium's share price may well benefit from such market sentiment 
alignment. However, our medium to long-term strategic goal remains to 
demonstrate the commercial diversity and solidity of Coinsilium as a 
business so that, in the future, the share price will more fairly reflect 
the company's operational performance and potential, much of which remains 
unconnected to cryptocurrency prices. 
 
Investee Highlights in 2018 
 
Indorse [2] 
 
Singapore-based Indorse is a tokenised platform, that scales globally, and 
is expressly designed to create a genuine confidence that prospective 
employees have the bedrock skills required to perform. 
 
It achieves this by verifying the actual technical skills of individuals on 
its platform through validators, interactions with AI chatbots and 
assessments by acknowledged experts in their relevant fields. Blockchain 
then creates an immutable record of this skills assessment and also provides 
the mechanism to reward participants for the value they create to the 
platform. 
 
For further information about Indorse, please visit www.indorse.io [2]. 
 
Indorse fulfilled successful investment rounds during 2018, raising 
SGD450,000 in equity investments and c.US$9m via a token sale. Over 40,000 
users signed up to the platform with 96 programmers currently validating and 
reviewing code to verify the technical competence of coders. 
 
Indorse fully delivered on its promises for 2018 by creating and running a 
working product despite difficult crypto market conditions. The team also 
managed to build and rollout an update of their platform in December 2018. 
It has customers in the pipeline for 2019 and is expected to achieve 
significant revenue growth in the upcoming months. 
 
RSK [3] 
 
RSK Labs is an open source platform adding value to the Bitcoin ecosystem by 
enabling the use of smart contracts. RIF Labs uses the RSK Smart Contract 
Network for settlement, identity management and economic coordination in a 
fully decentralised method. Coinsilium was the lead investor in RSK's first 
investment round in February 2016. 
 
For further information about RSK, please visit www.rsk.co [4]. 
 
In February 2018, the Company purchased 15,000 series Seed-1 RSK shares in 
addition to its previously held 50,000 series Seed-1 RSK shares, making the 
total amount invested US$83,750 for a total holding of 65,000 Seed-1 RSK 
shares. 
 
On 19 November 2018, the Company announced that RIF Labs had agreed to 
acquire the entire share capitals of RSK Labs. 
 
The RIF Labs acquisition was conducted by way of a 'share for token' swap 
between RSK Labs shares and RIF tokens and Coinsilium will receive 
approximately 1,951,846 RIF tokens over a vesting period in return for its 
65,000 RSK shares. The value of the RIF tokens receivable by Coinsilium was 
US$773,070 at the prevailing November 2018 Bitcoin/USD rate. Malcolm Palle, 
Coinsilium's Executive Chairman, joined the board of RIF Labs in 2018. 
 
RSK Labs is one of Coinsilium's major investments and we look forward to 
deepening our ties with RIF Labs and finding mutually beneficial 
opportunities for development. 
 
Elevate Health 
 
Elevate Health is building a platform focused on the behavioural health 
space, aiming to facilitate a number of cost-reducing solutions for 
behavioural healthcare providers, insurers, health authorities, families and 
employers. to address problematic and costly lifestyle choices on the part 
of their customers, clients, patients, employees and loved ones. Elevate 
Health seeks to connect technological innovations such as phone apps, 
wearable devices, oracles and smart contracts in order to pay monetary 
rewards to motivate lifestyle changes. 
 
For further information about Elevate Health, please visit: 
www.elevatehealth.io [5]. 
 
Elevate Health has now successfully piloted its platform and the "rewarder" 
admin section of the platform and user app went live on the Android Play 
Store on 5 January 2019. 
 
Additionally, Elevate Health will go live with its first use case, SOBER, 
this month, alongside its partners East Sydney Medical and The Dawn Rehab, 
Thailand. SOBER will monitor problem drinkers leaving medical care and 
reward them for remaining sober as part of their rehabilitation. 
 
In February 2019, Elevate Health will launch two pilot projects with Aboitiz 
Equity Ventures, one of the 10 largest groups in the Philippines and a 
Forbes Global 2000 company. It will reward their employees for achieving 
lifestyle changes for various lifestyle metrics. 
 
The platform is targeting 100,000 end users by the end of this year, which 
would represent an equivalent transactional volume of US$500,000 per day. 
 
StartupToken [6] 
 
StartupToken is a Gibraltar registered hyper-accelerator helping 
entrepreneurs in the blockchain space to grow their projects into successful 
start-ups. StartupToken helps its clients reach the necessary level of 
engagement with their communities worldwide thanks to a full-service package 
including legal and technical support, token economics and modelling, 
compliance, events organisation and growth hacking. 
 
For further information about StartupToken, please visit 
www.startuptoken.com [7]. 
 
In November 2017, Coinsilium acquired a 30% holding in StartupToken Ltd, at 
a valuation of circa GBP1.2 million, for a consideration of GBP360,905 paid 
through the issue of 3,255,224 Coinsilium shares at 8.5p, and a further cash 
payment of GBP84,211.23. 
 
In December 2018, StartupToken announced an inward investment from 
Blockwater Capital, a leading digital asset fund (DAF) that focuses on 
bringing blockchain-enabled projects to real world application. Blockwater 
agreed to acquire 7.4% of StartupToken for a total consideration of 
GBP193,548.39, valuing StartupToken at GBP2.6 million and thereby, Coinsilium's 
seed capital investment at GBP722,222, an increase of 100% compared to the 
cost of Coinsilium's original investment. 
 
For further information about Blockwater Capital, please visit 
www.blockwater.io [8]. 
 
StartupToken has successfully organised roadshows for its accelerator and 
advisory clients in Europe and East Asia, very active regions in terms of 
cryptocurrency trading, entrepreneurship and blockchain development and 
where StartupToken is building a growing presence. 
 
StartupToken is now working with leading blockchain platforms to help them 
in building a solid ecosystem of partners, users and developers. 
 
Bundle [9] Network 
 
Bundle Network is an online platform connected to multiple cryptocurrency 
exchanges. Through one single account, users can purchase and sell multiple 
coins and tokens within seconds, at the best price available. Bundle Network 
aims to provide support for the burgeoning and ever-changing world of 
digital assets, easing the transaction process to trade quickly, safely, and 
efficiently. Bundle Network aims to release a beta version of its platform 
in Q2 2019. 
 
For further information about Bundle, please visit www.bundle.network [10] 
 
In August 2018, Coinsilium announced that it has completed an investment of 
US$125,000 in Bundle Network. The valuation terms of Bundle Network, whilst 
known to the Company, are subject to confidentiality due to commercial 
sensitivities. 
 
Bundle Network has strengthened its collaboration with Istanbul-based 
start-up accelerator RDC Smartup, which was established by software 
development company RDC Partner. RDC Smartup's co-founder, Mr. Onder Uysal, 
has joined the Bundle Network management team in charge of strategy and 
business development. 
 
In April 2019, the Bundle Network co-founders will join the Draper 
University programme. Draper University is a Silicon Valley-based school for 
entrepreneurs founded by Tim Draper. Tim Draper is a renowned venture 
capitalist (past investments include Skype and Hotmail) and owns large 
holdings of bitcoins. 
 
Coinsilium Strategic Priorities for 2019 
 
As previously stated, in the upcoming year one of our key priorities will be 
to demonstrate to the market the quality and potential we see in the 
companies within Coinsilium's investment portfolio, and thereby secure 
material value recognition for these equity stakes. 
 
In addition to securing the growth of the Company over the short, medium and 
long terms, Coinsilium is also working on a number of key initiatives to 
expand and diversify its interests in the blockchain sector. Further 
information on a number of these areas is provided below. 
 
Seed Accelerator Programs 
 
The key difference between incubators and seed stage accelerator programs is 
that incubators do not usually take equity stakes, while seed stage 
accelerator programs do. Seed accelerator programs also have a clearly 
defined time frame of service provision to start-ups and are ideal for 
sourcing new investment opportunities alongside the development of specific 
applications for blockchain platforms. 
 
Coinsilium has earned equity stakes in blockchain start-ups in the past for 
accelerator-type services, notably via the Block Chain Space programme, 
which it ran in 2016. This has enabled the Company to preserve cash while 
actively guiding and supporting start-up founding teams. 
 
However, since 2017, Coinsilium has chosen to position itself at a different 
level by not directly operating seed accelerator programs, but rather by 
investing in companies running these programs, such as StartupToken, in 
which the Company acquired a 30% equity stake in November 2017, as outlined 
above. 
 
For this reason, going forward, Coinsilium will also be looking to enter 
strategic commercial relationships with certain existing and newly 
established global seed accelerator programs. Whilst the operational 
management of these seed accelerator programs will be handled by third 
parties, such as StartupToken, the Company will provide strategic advice 
around the structuring and management of investment funds focused on 
financing the start-ups. 
 
Coinsilium also plans to expand its B2B accelerator offering to other 
regions in 2019. The Company's regional approach will allow it to optimise 
revenue streams by choosing to operate in areas that can show the greatest 
market growth potential. Stakes in these businesses tend to perform 
strongly, as the local management teams are well suited to support the 
start-ups in their programs. 
 
Coinsilium will also have the opportunity to make early stage investments in 
the accelerated start-ups that it finds to be most promising. The Directors 
believe that it can draw significant value from close cooperation with its 
portfolio companies such as RSK and StartupToken, whilst helping them to 
achieve meaningful benefits and returns. 
 
Advisory Services 
 
In 2018, ICOs (Initial Coin Offerings) came under a high level of scrutiny 
from financial regulators worldwide, most notably from the U.S. Securities 
and Exchange Commission (SEC). The number of 'Utility Token' offerings and 
their average proceeds decreased throughout the year as potential token 
issuers and token buyers became increasingly aware of the regulatory risks 
surrounding ICOs. This has resulted in many start-ups now switching their 
focus away from token sales and towards traditional equity offerings and VC 
funding. 
 
Coinsilium's advisory services division is adapting to lower demand in the 
utility token space whilst preparing itself for an increasing interest in 
Security Token Offerings (STOs) or Digitised 'Smart' Securities. Utilising 
Blockchain based smart contract technology, it is now technically possible 
for financial instruments such as equities to be represented by tokens. When 
compared to Utility Tokens, Security Tokens are likely to be asset-backed 
and governed by smart contracts with specific functionalities such as 
automated reporting and voting rights. 
 
Unlike Utility token offerings, STO's will be subject to regulation in the 
same way as traditional equity offerings and this is a model with which 
Coinsilium's management is most familiar. 
 
However, the overall regulatory environment is still evolving and not as yet 
entirely clear. The Company is hopeful that these issues will be resolved 
through the introduction of new regulatory frameworks and Gibraltar is one 
jurisdiction set to implement new Token regulations in 2019. 
 
During 2019, Coinsilium will be increasing its presence in Gibraltar, moving 
the management of core operations, such as its advisory services division, 
there from London. In addition to identifying Gibraltar as a jurisdiction 
providing a higher level of regulatory certainty for blockchain and 
cryptocurrency businesses, the objective is also to reduce the costs of 
operations, enabling Coinsilium to allocate more resources towards 
investments and the provision of revenue generating activities such as its 
accelerator and advisory services. 
 
In this regard, in Q1 this year, Coinsilium's Executive Chairman Malcolm 
Palle will be relocating to Gibraltar in order to oversee the establishment 
of Coinsilium's permanent presence and ongoing operations in the 
jurisdiction. 
 
Flowstone Capital 
 
In October 2018, the company announced the establishment of Flowstone 
Capital, a new 100%-owned private crypto fund based in Gibraltar. 
 
Coinsilium is currently exploring alternative models to maximise the 
shareholder value of Flowstone Capital. As a result of the flexible 
structure that the Company utilised, Flowstone Capital required minimal 
amounts of Coinsilium management time in 2018. Further updates will be 
provided to the market in due course. 
 
TerraStream 
 
Coinsilium's wholly owned, Gibraltar-based subsidiary, TerraStream was 
established with the aim to facilitate the application of blockchain 
technology for Token based alternative funding solutions with potential 
applications across several industry sectors. The initial focus is on the 
mining industry and in particular, precious metals and natural resources 
extraction. 
 
In light of the prevailing market climate and regulatory challenges of the 
past year, Coinsilium decided to revise its development strategy for 
TerraStream given its initial focus on asset backed lending. Instead of 
launching with a utility token proposition, the Company believes that the 
emerging STO or Digital 'Smart' Securities environment will be more 
conducive for TerraStream's development, where we see potential 
opportunities through the provision of enabling technology solutions. 
Further announcements will be made in due course. 
 
Conclusion 
 
The Board of Coinsilium looks forward to providing further updates to the 
market across its business in terms of new advisory relationships, broader 
commercial initiatives and the specific activities of its material investee 
companies. The Company is excited as it enters 2019 to build upon its 
current and new activities within an augmenting blockchain and 
cryptocurrency market. It is especially enthused as it aims to expand its 
B2B accelerator programs and its presence in Gibraltar. 
 
For further information, please contact: 
 
Malcolm Palle, Executive Chairman +44 (0) 7785 381089 
Coinsilium Group Limited 
 
Eddy Travia, Chief Executive Officer +44 (0) 20 3889 4312 
Coinsilium Group Limited 
 
www.coinsilium.com [11] 
 
Guy Miller / Mark Anwyl +44 (0) 207 469 0930 
Peterhouse Capital Limited 
(NEX Exchange Corporate Adviser) 
 
Nick Emerson +44 (0) 1483 413 500 
SI Capital Limited 
(Broker) 
 
Notes to Editors: 
 
About Coinsilium 
 
Coinsilium is a blockchain venture builder, advisor and investor that 
finances and manages the development of early stage blockchain technology 
companies. It does this through its consortium of top tier investors, 
industry thought leaders and executive managers. Coinsilium's focus is on 
driving innovation in fintech and blockchain technologies, enabling 
businesses to take advantage of growth opportunities. Coinsilium also 
provides advisory services to companies planning token generation events. 
 
Coinsilium shares are traded on NEX Exchange Growth Market, the primary 
market for unlisted securities operated by NEX Exchange, a Recognised 
Investment Exchange under the Financial Services and Markets Act 2000. 
 
For further information about Coinsilium, please visit www.coinsilium.com 
[12] 
 
ISIN:          VGG225641015 
Category Code: MSCU 
TIDM:          COIN 
Sequence No.:  7149 
EQS News ID:   765509 
 
End of Announcement EQS News Service 
 
 
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(END) Dow Jones Newswires

January 14, 2019 02:02 ET (07:02 GMT)

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