The Bitfury Group, a technology company specialising in Bitcoin mining and blockchain services, plans a new funding round this year as it seeks to more than quadruple its revenues compared with last year, its founder and chief executive said.
"We are seeing high demand for blockchain-based services across many areas and industries, from banking and insurance to government and others," Valery Vavilov told The National in an interview in Dubai.
“[Blockchain] has the potential to be even bigger than the Internet,” he added.
The company, which plans to open its first Middle Eastern office in Dubai in the coming weeks, expects to achieve annual revenues of $450 million in fiscal 2018, which ends on March 31, compared with $100m in 2017, Mr Vavilov said.
Blockchain is an electronic transaction-processing and archive system that allows parties to track information in a secure network without the need for third-party verification.
It is the underlying software enabling transactions of cryptocurrencies including Bitcoin, but can also be used to track more conventional transactions, such as remittances and real estate sales.
Governments and companies in the region are increasingly looking to adopt emerging technologies such as blockchain to cut the costs of doing business.
Spending on blockchain in the Middle East and Africa is projected to double this year to $80.8m, up 107 per cent from $38.9m in 2017, according to figures published in February by IDC.
Bitfury, which is based in Amsterdam but has offices in San Francisco, Washington DC, Riga, Latvia and Hong Kong, provides both the software and hardware components needed to operate blockchains, including a string of data centres.
The company has held talks with prospective clients in Dubai and Abu Dhabi over the past week as it seeks to expand in the UAE, and, eventually, the wider Middle East.
It expects to receive a licence to open its first regional office in Dubai "within the next three weeks", Mr Vavilov told The National, in response to perceived high demand in the country.
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Read more:
Amsterdam’s Bitfury launches operations in the UAE
UAE Exchange agrees tie-up with blockchain start-up Ripple
Abu Dhabi Securities Exchange signs agreement with Swift and other parties to adopt blockchain technology
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“The UAE developed because of a strong overarching vision for what it wanted to be,” he said. “If we apply that sense of vision to how blockchain could be adopted here, then the country could become an incredible window [of opportunity] for blockchain firms.”
The Middle East is one of the target regions for a new fundraising round expected to launch later this year, the founder said, without revealing specifics.
“We have raised more than $100m in capital in recent years. We are committed to the Middle East and will be pursuing investment in the region as well,” Mr Vavilov said.
During his trip to the UAE, Mr Vavilov showcased Bifury’s new blockchain solutions, including Emercoin, Exonum and LightningPeach.
Among the products planned for the region is the Lightning Network app, still in the testing phase, which will enable blockchain-based micro-transactions including movie streaming payments and remittances from low-income workers – both for which the chief executive sees strong demand due to the large expat population.
The app is expected to go live globally “this spring”, said Mr Vavilov. However, it could take longer to launch in the UAE because regulations for blockchain and other ‘FinTech’ applications are still to be finalised, he said.
Despite widespread concerns about a ‘Bitcoin bubble’- the cryptocurrency has shed more than half its value since its December peak – Mr Vavilov said he held no similar fears of a ‘blockchain bubble’.
“Unlike Bitcoin, blockchain is a service that is provided, and people are really starting to understand how it can help them do digital transactions more effectively and safely,” he said.
Bullet Train
Director: David Leitch
Stars: Brad Pitt, Aaron Taylor-Johnson, Brian Tyree Henry, Sandra Bullock
Rating: 3/5
History's medical milestones
1799 - First small pox vaccine administered
1846 - First public demonstration of anaesthesia in surgery
1861 - Louis Pasteur published his germ theory which proved that bacteria caused diseases
1895 - Discovery of x-rays
1923 - Heart valve surgery performed successfully for first time
1928 - Alexander Fleming discovers penicillin
1953 - Structure of DNA discovered
1952 - First organ transplant - a kidney - takes place
1954 - Clinical trials of birth control pill
1979 - MRI, or magnetic resonance imaging, scanned used to diagnose illness and injury.
1998 - The first adult live-donor liver transplant is carried out
THE SWIMMERS
Director: Sally El-Hosaini
Stars: Nathalie Issa, Manal Issa, Ahmed Malek and Ali Suliman
Rating: 4/5
How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
Kill Bill Volume 1
Director: Quentin Tarantino
Stars: Uma Thurman, David Carradine and Michael Madsen
Rating: 4.5/5
The Two Popes
Director: Fernando Meirelles
Stars: Anthony Hopkins, Jonathan Pryce
Four out of five stars
Blue Beetle
Director: Angel Manuel Soto
Stars: Xolo Mariduena, Adriana Barraza, Damian Alcazar, Raoul Max Trujillo, Susan Sarandon, George Lopez
Rating: 4/5
Company Profile
Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed
