Opinions and analyses

26 November 2018

Our Pick for the Company to Deliver on the Promise of Blockchain Tech for the Enterprise

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Blockchain is transforming Shipping and Logistics Blockchain is transforming Shipping and Logistics Ivan Bandura via Unsplash

Anyone who is keenly interested in the blockchain sector, has probably realized that the blockchain technology market has matured and is primed to solve real-world problems, far separated from the hype and hysteria of cryptocurrencies. As thoughtful, thematic, and analytical venture capital investors (rather than crypto speculators), we at Applied Crypto Ventureshave been firm believers in the enterprise blockchain opportunity.

Important Note: The class of technologies colloquially called “blockchain” is now more accurately called Distributed Ledger Technology (DLT), with blockchain being one architecture that works pretty well and is most familiar as it underlies popular cryptocurrencies.

From the inception of our first fund over a year ago, we had been looking for a platform that would deliver on the promise of blockchain technology for the enterprise. We knew that the next-generation enterprise software stack was perhaps the largest prize in the near to medium term in the DLT. As experienced enterprise tech investors and operators, we also knew that the platforms already positioned in this market (like HyperLedgerStellar, and Corda) were imperfect and that their promise was front-running their capabilities. However, we also possess the humility to admit what we didn’t know: the kinds of enterprises that would adopt DLT first, the killer app that would spark adoption, or the features and functions that would work well within enterprise constraints.

Backing the best team

So we did what a good early stage investor does. We found and backed the best team that could figure this out for us. The team at Adjoint had the right mix of deep technical expertise and the bold vision for the Decentralized Enterprise of the future. They had a strategy to specialize in fintech, and established toeholds in beachhead markets.

It has been a year since we first met Havell, Somil, Darren and Stephen. Adjoint now stands out from the crowd as the best Enterprise DLT platform on the market. During this period they have built a solid, stable DLT platform for the Enterprise called Uplink — it is open source, if you want to see how easy it is to get started. In these few months, they have managed to acquire several paying customers who are already using their platform — indeed, enterprise DLT platform revenues, which are unheard of in this sector.

But perhaps what makes me most proud of them is their customer and partner development effort that has led them to own not one, but two killer inter-company applications:

  1. Smart Treasury: All large corporates have a treasurer to manage the cash and liquidity throughout the organization. Smart Treasury is a secure, continuously reconciled overlay for corporate treasurers to reduce costs and gain visibility across large complex organizations and multi-regional processes.
  2. Smart Insurance: Creating secure, regulatory-compliant platforms for B2B and B2B2C insurance across programs, mutuals, captives and speciality. Adjoint drives processes to issue policies, manage certificates, trade risks, pay premiums and handle claims. The platform helps multiple stakeholders share a trusted, single version of the truth which reduces complexity, improves processing speeds, and enhances operating margins.

Why did the world need yet another distributed ledger technology (DLT)?

The largest enterprises have a few unique characteristics: they are operationally complex, and they operate in regulated environments. Adjoint’s Uplink DLT platform is differentiated from others because it is purpose-built for highly regulated and privacy-sensitive B2B transactions.

Adjoint’s strong technical team intersects with the right business development context

Technical talent at this level at the intersection of cryptography and computer science is rare. But the founding team Adjoint also includes seasoned professionals from banking, insurance, hedge funds, and big four consulting firms experienced in building enterprise-grade solutions. Their solutions are already delivering tangible value: e.g. their Treasury solution for Fortune 500 companies delivers millions of dollars in savings a year for several customers today. In addition, their global strategy has allowed them to latch on to the faster adoption cycles for enterprise DLT in geographies, such as Europe..

Enterprise DLT maturity and accessibility has pleasantly surprised us

In hindsight, Adjoint’s early success is almost too easy to explain. B2B transactions account for trillions of dollars in cash that is moved around the world on a daily basis. For enterprises among the Fortune 500, roughly half of their transactions are intra-company — from one subsidiary to another — and often involve manual reconciliation processes across their systems of records. These processes can be simplified, automated, and made robust — if there is a single, reliable, and immutable global ledger, which is exactly what DLT is designed to do,

Adjoint’s products are implemented and delivered as familiar Software-as-a-Service (SaaS) — which is how enterprises buy most of their software today. Like other SaaS offerings, Adjoint implementations are typically hosted on premise or with major IaaS providers, such as Amazon’s AWS, Google Cloud Platform, and Microsoft Azure. The platforms also integrate with existing ERP systems through an extensive library of APIs, which makes adoption and implementations easier. Uplink is interoperable with most existing enterprise systems and avoiding the “rip-and-replace” cycle makes it easier to sell. Having been through several technology adoption cycles in my lifetime, I can see how this approach has clear merit in being a scalable, future-proof solution for enterprises.

Outside the cryptocurrency envelope

More importantly, none of Adjoint’s implementations involve any cryptocurrency. Not to put too fine a point on it, but the delivery of value or the consummation of a transaction on a DLT does NOT require a coin or a token. This is not obvious to most participants in the blockchain ecosystem. It also casts the business model of companies like Adjoint into the familiar mold of enterprise software startups rather than tokenized / decentralized blockchain projects. It makes it more digestible for customers, employees, and investors.

Looking forward

Adjoint has come a long way in a year, and our excitement about them is probably palpable.

While they are still in the early days of building a business, the company has enough capital augmented by significant customer revenue to reach the next waypoint on their trail-map. Their tech stack is being further enhanced, and distribution channels have been identified to drive product adoption.

Two asks

  • Adjoint continues to add to the team, so referrals to DLT developers, solutions engineers, and enterprise solution sales ninjas are welcome.
  • If you or your business would like to hear about how DLT can transform your operations, please let me know (here in the comments).

I am looking forward to Adjoint’s progress towards the next waypoint and being a part of their impactful journey.

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