As concerns grow over inflation and increasing interest rates, the cryptocurrency market has been looked at as a natural hedge to preserve capital. This popularity has led to more and more institutions looking to build exposure to blockchain and cryptocurrency. BCB Group, a provider of crypto banking services, makes cryptocurrency more accessible for cryptocurrency exchanges, market makers, funds and corporate traders, and cryptocurrency-specific projects. The company provides a host of services including exchange services, treasury management, custodial, wealth management, interest accounts, and foreign exchange. BCB plans to further expand its offering to integrate traditional banking with the digital asset economy.
London TechWatch caught up with CEO and Cofounder Oliver von Landsberg-Sadie to learn more about the inspiration behind the company, the state of the cryptomarkets, the company’s future plans, latest funding round, which brings the total funding raised to $5.55M, and much, much more.
Who were your investors and how much did you raise?
We raised $4.55M from North Island Ventures, Blockchain.com Ventures, Pantera Capital, L1 Digital, and Pack Capital. This is best described as a seed follow-on or pre-Series A raise.
Tell us about your product or service.
BCB provides banking services for the crypto and blockchain industry including accounts in multiple currencies, and we offer FX services with extremely competitive pricing. BCB also offers cryptocurrency trading and treasury services. We mainly cover the UK, Europe, and Switzerland but will cover more cryptocurrency economic centres soon.
What inspired the start of BCB Group?
BCB’s original service was cryptocurrency brokerage for high-net-worth individuals and was inspired by the complexity of the market with scarcity of high-quality information for those who wanted to invest. What inspired our pivot into banking was just how hard it was to move money when that money was even remotely related to the crypto industry. We were inspired to solve the problems not just for ourselves but for the market as a whole.
How is it different?
BCB is the only B2B fintech in the world offering a regulated one-stop-shop for bank accounts, on-chain cryptocurrency and FX trading, and custody services, and no-one beats us for customer service where all clients have direct access to the ops and trading teams via messenger apps.
What market are you targeting and how big is it?
Today our focus is on cryptocurrency exchanges, market makers, funds and corporate traders, and cryptocurrency-specific projects. Market size estimates change every day but the most significant indicator might be Bitcoin itself which is worth around $1tn presently.
What’s your business model?
Our model is a fairly simple transaction fee model which is tailored to the specific needs of the client. Some have large but few transactions, some are inverse with millions of small transactions, so we work hard to present the most economically interesting package on a client-by-client basis.
How has COVID-19 impacted the business?
As a digital services business, the pandemic has been a catalyst for growth. As a tech-savvy company, work from home has become the norm, even beyond lockdown, and staff are happy with the flexibility.
What was the funding process like?
As a first-time entrepreneur after 20 years in comfortable banking jobs, this could not have been more of a challenge. It was only when the numbers really started to prove themselves that things became a little easier, and things fell into place quite quickly towards the end of 2020. Our lead investors are quite central in the crypto VC community and quickly helped us attract more like-minded funds for what ended up approximately 30 days from heads of terms to completion.
What are the biggest challenges that you faced while raising capital?
The general state of the global economy presented a tough backdrop to raise funds in, combined with continued scepticism about the long-term viability of the cryptocurrency industry. There was also the basic problem of keeping up with the scale of growth we are experiencing from a corporate administrative point of view. Getting up to date with multiple corporate entities in multiple jurisdictions was a monumental challenge which our CFO Philipp Prince met with great effect.
What factors about your business led your investors to write the check?
Our network of clients is one of our greatest assets, from Bitstamp to Gemini, B2C2, Kraken, Binance, so many important names in this space. Having great market share in the UK/EU/Switzerland gives us a moat which is attractive to investors. We’re profitable too, having broken even in mid-2020, which is always a plus. But above all, we’re solving a problem that so many in this industry face: Basic transaction banking.
What are the milestones you plan to achieve in the next six months?
This year we’re focusing on product completeness for existing verticals and we’re investing heavily in regulatory licences, led by cofounder Oliver Tonkin, in more jurisdictions so that we can expand our offering in more territories. Revenue is obviously a big focus too so we have some pretty ambitious targets, but our sales team led by Ben Sebley are doing a great job of looking after clients and bringing our services to a wider audience. In terms of transaction volume, with $7B behind us in Jan and Feb, I’d like to hit at least $100B by year-end.
This year we’re focusing on product completeness for existing verticals and we’re investing heavily in regulatory licences, led by cofounder Oliver Tonkin, in more jurisdictions so that we can expand our offering in more territories. Revenue is obviously a big focus too so we have some pretty ambitious targets, but our sales team led by Ben Sebley are doing a great job of looking after clients and bringing our services to a wider audience. In terms of transaction volume, with $7bn behind us in Jan and Feb, I’d like to hit at least $100B by year-end.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
BCB bootstrapped for 2 years before we raised $1M in seed money in mid-2019… it was an exceptionally lean period for founders and staff. Capital efficiency must be your number one control while you’re busy inventing and selling. It is also useful to test ideas as quickly as possible, failing fast, so that winning ideas have a better chance of finding that ultimate product-market fit.
Where do you see the company going now over the near term?
We’d like to focus on executing well for existing clients and products in the very immediate term, while building a base for product and territorial expansion over the full year. We see untapped opportunities in central and eastern Europe as well as Singapore, and we see simple recombinations of existing products to drive sales and cross-product demand, for example with the launch of BCB Treasury, a combo of banking, trading, and custody.
What’s your favourite outdoor activity in London?
I love long-distance running in London, and not just in the amazing parks like Hyde Park, Hampstead Heath, and Richmond Park, but in all the secret and beautiful alleyways in the City of London, and along the gorgeous canal towpaths. So much to explore in this amazing city, one lifetime is not enough to see it all.
