For most startups the road to securing funding is a long and hard process. It’s not exactly a “beg, borrow or steal” kind of experience but more often than not it involves luck, timing and knowing people with the right connections. The latter part is something you don’t read about in books. It is just a fact of life.
One startup shared its experience during its three-year journey (thus far).
Founded in 2016 by Annette King, Jeremy Sutton and Mark Wales Galileo Platforms raised US$2 million in Series A funding from Greenlight Capital Re and Scales Investors in October 2018.
Wales said Hong Kong government support was not lacking for the start-up. He attributes this in part to having chosen the right technology – Blockchain – as the centerpiece of their innovation strategy.
"Blockchain is a fundamental technology that will lead the much-needed change in the insurance sector. Our platform takes much of the functionality typically found in legacy policy administration systems and encodes it in smart contracts in a blockchain. This mutualizes the policy administration function, reducing costs and creating new opportunities for insurance," explained Wales.
In this exclusive interview with Fintech Innovation, he describes the funding options the startup had at its disposal and why it chose the path it has taken.
Reflecting on the Initial Coin Offering (ICO) movement, he commented that the founders of Galileo Platforms are seasoned professionals who have seen a few bubbles in the past, including the Internet bubble and the financial crisis. “We knew a bubble when we saw one, and we thought we were looking at that and being caught up in bubbles is not normally good for you or for your company.”
Moreover, he noted that Venture Capitalists (VCs) bring value to a startup’s business because they [VCs] are hardened financial people who “do a lot of due diligence on you, your business model, your technology and looking at you to see whether they truly believe you are going to be successful and be able to achieve what you say you're going to achieve. If you can't convince these people that you have a viable business why should you then go out and do an ICO and take money from a bunch of individuals who've done little, if any, of the due diligence that those people have and are purely speculating on the rise in the price of some token off something from your organization that doesn’t show very clear value?”
Watch the full video to hear more from Wales on funding strategies that startups can look as their way forward.