Prize-linked savings accounts or “PLSA” originated in the United Kingdom in 1956 as a way to encourage people to save money by adding prize incentives to the savings process. Klink is the digital asset yield generation platform that lets users deposit stablecoins to earn and asset holders are automatically entered into a drawing to win prizes ranging from 10 cents to $10M. For every $25 held on the platform, the depositor receives one entry into the weekly drawing. By gamifying the savings process, Klink hopes to attract a new generation of digitally-native savers that are looking for a new way to earn beyond a traditional savings account. Klink is completely free to use and assets on the platform are insured for up to $30M through Fireblocks.
London TechWatch caught up with Klink Cofounder Chris James Murphy to learn more about the business, the company’s strategic plans, recent round of funding, and much, much more…
Who were your investors and how much did you raise?
We just raised our Pre-Seed of $500K (£462k) to allow us to finalize our initial product, built out our stellar team, and amplify our services into the market. The round was led by Blockchain Founders Fund, with participation of UOB Venture Management, Signum Capital, and TechMeetsTrader.
Tell us about your product or service.
Klink Finance is a gamified crypto asset management platform that operates at the intersection of consumer finance and blockchain technology. We implement methods of social gamification and alternative reward distribution amongst our user populations to assist them in growing their wealth through digital assets in a safe and exciting way.
What is your Business model?
Klink leverages the concept of pooled funds amongst user populations unlocking financial rewards for providing liquidity on an institutional scale otherwise inaccessible to individual investors. This mechanism has been seen in the UK since 1956 through Premium Prize Bonds. We were inspired by this mechanism and sought to bring it to the world of crypto.
What inspired the start of Klink?
Our business was driven to optimize poor existing financial behaviors into good ones by providing alternative financial products that eliminate downside risk but enable upside wealth generation. We had seen the positive effects gamification brought into other verticals such as language & fitness apps and wanted to pursue this in the personal finance space.
How is it different?
We act as an intermediary between old, outdated financial service offerings and powerful new financial wealth generation opportunities by giving people access to the benefits of the blockchain world in a streamlined and safe manner.
What market you are targeting and how big is it?
As we bridge the old financial world to the new we encompass a user base from three core demographics including retail investors, crypto natives, and gaming advocates. For our go-2-market sweepstakes product, you could consider that we want to give user populations that spend €69B a year across Europe on lottery tickets an alternative way to distribute their funds in search of financial benefit.
How are you preparing for a potential economic slowdown?
The markets and sentiment have drastically changed in the last year and we believe that the landscape of service offerings will need to serve populations with instruments to preserve, retain and grow their funds in an economic tightening, a solution that is at the core of our proposition.
The markets and sentiment have drastically changed in the last year and we believe that the landscape of service offerings will need to serve populations with instruments to preserve, retain and grow their funds in an economic tightening, a solution that is at the core of our proposition.
What was the funding process like?
In the earlier phases of our business, our core focus was on developing a framework validation of the capabilities to launch such a business mode. This early groundwork led us into some good early conversations with Investors but unfortunately as we began to commence our raise the fall of Terra Luna and the first leg down of the bear market commenced.
Through the turbulence, we saw our early web 2.0 fund conversations fall short of their initial conviction to diversify into UK crypto startups due to such market turbulence. After these first engagements, we soon presented our vision for the business to web3 native funds in Asia and the USA and found an overwhelming level of support and expertise available to us along with initial funding to ensure our success in our earliest phase.
What are the biggest challenges that you faced while raising capital?
As I mentioned, the macro environment became a huge issue when we first sought initial capital, there was a breakdown of trust in the market which made it hard to bring conviction to venture capitalists who were collectively redeveloping their strategy in capital allocation and risk management.
Macro aside, from our experience of being in the capital investment world for a few years now, there is a tremendous amount of noise in the markets. We know many founders and as capable and ready they are to bring their business models to market and beyond, there is such a strong level of weekly inbound deal flow to VCs that there is high competition to stand out from the crowd. It was essential for us to be sharp in our vision to cut through the noise and network into warm introductions where possible.
What factors about your business led your investors to write the check?
We quickly aligned on our vision for Klink with our lead investor Blockchain Founders Fund on the powerful nature of gamification and the huge opportunity to enable it in the personal finance space. BFF has a strong foothold in both, the crypto finance and gaming space which made them the ideal partner and grow with Klink on a global scale.
What are the milestones you plan to achieve in the next six months?
This starting capital will allow us to finalize our initial deposit account product, continue to build out our stellar team, and amplify Klink’s services to the market as we go live in the coming months.
This starting capital will allow us to finalize our initial deposit account product, continue to build out our stellar team, and amplify Klink’s services to the market as we go live in the coming months.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
Understand that we are in a different market now, take only what you need for what stage you are at in the business cycle, and do not get wrapped around pushing valuations at a very early-stage, when the capital is available from a good fund, take it and let your performance do the talking for valuation for the later rounds.
Where do you see the company going now over the near term?
We are at a pinnacle point where we will prove the conviction of our product through market adoption. Our core focus over the coming months is to build past the beta product and grow a strong user base that provides a unique and rewarding service to access digital assets.
