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Mathias Ruch
June 3, 2022
4
min read
CV VC Updates

Why Blockchain has the transformative power to restore trust

The main theme of this year's World Economic Forum was "Working Together and Restoring Trust". Strikingly, Blockchain, or Web3.0, was one of the big themes that resonated, and not just because of Defi, Metaverse, and NFT. And although the streets in Davos seemed less crowded than in winter, the numerous Web3 pavilions and events, including our Blockchain Hub on the Davos Promenade, were sold out. The keynotes and panel discussions were of a high standard, participants gathered from all over the world. There was a spirit of optimism because Blockchain offers precisely what the world of tomorrow needs: security, transparency, and trust. It almost felt like this year's WEF had become the World Blockchain Forum.

Of course, this observation is not enough given the many issues at hand: War in Ukraine, inflation, global supply chain problems, climate change, and financial market turmoil, to name a few. One can tell that the mood among the world's economic and political elite is subdued. Today's leaders are desperately seeking new, alternative solutions and models.

Given the tumultuous times, it is appropriate to assess the impact on our investment thesis and strategy. Venture capitalists like CV VC were early to recognize the potential of Blockchain, which goes far beyond cryptocurrencies. We see no reason to change our investment thesis: the digital transformation backed by Blockchain remains inevitable. We see no reason to change our investment strategy: Since 2016, we have supported early-stage startups and invested in the equity of nearly 50 companies developing services and products based on blockchain technology. We are in close contact with our portfolio companies, as it will take some time for the indirect effects to become visible. In addition, best practices for venture capital investments remain key.

As the world enters the decade of the fourth industrial revolution, building on Blockchain as a transformative technology, it is worth recanting the theme of this year's WEF, "Working Together and Restoring Trust". Blockchain is often described as a "technology with integrated trust". This is particularly evident in the case of Africa: Unlike first-world nations like Switzerland, many citizens in African countries cannot trust institutions we take for granted, have no access to the global financial system or do not have trustworthy property registries.

With our Africa initiative, we see our expansion strategy more than confirmed. CV VC has been present on the continent since 2018. In a public-private partnership, together with the State Secretariat for Economic Affairs SECO, we worked on our Africa initiative, which we launched in 2021. This year, we published the inaugural African Blockchain Report with Standard Bank and SECO. The report provides a compelling structural overview of the emerging blockchain sector and insights regarding its funding. It highlights that Blockchain funding far outpaced all other sectors eleven times. We also announced the CV VC African Blockchain Early-Stage Fund to unlock this potential. Today we already have diverse ecosystem participation and have invested in 12 Blockchain startups in Africa.

For us, Africa is symbolic of the new world. First, the continent has great economic potential, with a young population and impressive GDP growth potential. Second, adopting new technologies, especially Blockchain and crypto, is remarkable. The many challenges, especially in the financial and banking systems, are an opportunity for the continent, true to the motto «when challenges become opportunities.» Therefore, it is not surprising that many Blockchain use cases cater to the needs of Africa. Third, and consequently, venture capital is exploding in Africa. Just one staggering figure illustrates the trend: in 2019, it took one year to invest $1 million on the continent. Last year, it took only seven weeks.

We are pleased to be the first VC on the continent to build on Blockchain's potential consistently. In Africa and other regions of the world, people have the opportunity to participate in an alternative economic system that allows for greater financial inclusion, independence, and security. What it takes is trust.

Trust in Blockchain, too. If you do trust, walk with us

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