Funderbeam — the beginning, a significant 2016, and the future

When we started to write the introduction to our 2016 report, we realized that we haven’t shared Funderbeam’s story publicly. Yes, bits and pieces here and there, but not the whole journey. From the very early start until 2016, when we launched all of our three visionary pillars: data, funding, and trading. So let us use this opportunity to reveal some of it so that you understand where we have come from. After all, every business is a story — and here is Funderbeam’s. At the end, you can find a link to download the full report of Funderbeam’s activities in 2016.

Our watchdog Freddy keeping us focused.

The beginning of Funderbeam goes back to 2013 when we started to play with the idea of a trading game. This was a stock market game for young adults to make all their investment mistakes in a virtual world instead of going to the main markets and losing money. As Funderbeam’s founders were part of the capital markets, it was a very short route to take!

At the same time, we had been seeing how small and medium size enterprises struggle to fund their growth and how their access to capital was limited, particularly cross-border. So we started to think: what if instead of a game, we create something real? None of us had any previous experience being a startup founder, but we thought that if we create something innovative then hopefully the startups will follow us and be the first ones to adopt it. And why can’t we analyze startups, create indices and build a community? The first screenshots were drawn, some research was done and then it was clear to the whole team that there would be no game — there will be a global startups stock market.

Do any of you remember Pitchcraft? No…? That was Funderbeam’s app for an audience to rate startups at pitching events. By investing virtual ‘pitchcoins’, the audience could select the winner. As the service provider, we could get data and connections with startups.

It was our first attempt to market ourselves and plug into the industry that we wanted to serve. But it was clear after some live events (thank you Seedcamp for letting us test!) that each event is different and we either needed to focus on the main business or we become an event-specific app. So we abandoned Pitchcraft, a data scientist joined the team, and we started to build the first of our three Funderbeam pillars — data. Without knowing how exactly, we were bullishly confident that by 2018 we would also have created two other pillars — the primary and secondary market.

No startup is built without pizza. Workshop around 2014.
It’s always difficult when you are new in an industry and you have a broader vision than just one focused business line. People, especially VCs, listen to your story and say: “Focus. Why do you build a stock market? Focus on data”. Or: “Forget data, build the stock market.” Or: “Just go for crowdfunding”. Once you mention that you have a vision of building the baby of Bloomberg, Nasdaq, and Angellist using next-gen technology, only a few would let us finish the story. Until one VC put it very directly: “I would suggest that you focus. But, if you do manage to build startup data analytics, funding and trading as a three-in-one, it will be an extremely powerful combination.”

So here we are — Funderbeam, three-in-one. Our idea is to provide a full value chain for the startup and growth stage community — accessible, high quality and transparent data to understand the market and make informed investment decisions, data which is available to individual, small and large institutional investors; a primary market to enable like-minded investors across the globe to invest in startups or for startups to raise funds; and a secondary market, to trade, to build global startup indices and thus to circle back to the data product once again.

Technology is nowadays so powerful, that it makes no sense to have those three pillars on different channels. Guess how many dedicated data people we have today to provide you data on about 150,000 global startups? Well, two full-time and three part-time.

For the first two years, we focused on data and started to look for the next-gen technology to build funding & trading. We launched data analytics in the autumn of 2014 and envisioned launching trading in 2018. Do any of you have one of our first business cards? The one you got in 2014? Well, check inside the card to see our initial plans. The reality turned out very differently. We heard that two bitcoin stock exchanges wanted to launch their businesses in Europe using an Estonian bank for collaboration. We started to learn more about the underlying technology for cryptocurrencies and, in 2015, we got so many strong signals about blockchain technology that it was impossible to ignore it. We realized that this would be our time-machine — the future is now and we will build our next two pillars using the blockchain. The rest is history!

Funderbeam opening party
Launch of Funderbeam Markets, April 2016
Funderbeam Markets opened its service to the public on April 21st, 2016, although there was one company funded and traded on our platform even before then: Funderbeam ourselves. Funderbeam Syndicate 1 was our test case and you can still find it on our market — trading. Not all of you may be aware, but the tokens of Syndicate 1 and Syndicate 2 represent the same value in the underlying asset i.e. Funderbeam. So you can trade history!

More seriously — Funderbeam Syndicate 1 proved that we had done it — we had built data, funding and trading and we were now ready to go live.

We have to thank the first three startups that used the Funderbeam platform, who showed courage and trust in us — Shipitwise, SportID, and Sportlyzer! All three of them raised money successfully and are still active on the market. We are looking forward to growing and continuing the journey with them for many years to come.

By the end of summer 2016 — when we’d gone through the whole cycle of our newly added services from launching a fundraising campaign, issuing securities on the blockchain, trading, post-trade actions, and reporting — we were ready for scaling. And this is where Funderbeam is now — ready for global scaling armed with data, funding and trading platforms.

In this report, Funderbeam’s first public annual review, you can read all the details about what happened in 2016. What happened in data, funding, trading and in all their respective teams. It goes without saying that our core asset is our people, and here you can meet all the new members of team Funderbeam (and believe us — this is a top class asset!). You can reach us directly at kaidi@funderbeam.com and urmas@funderbeam.com. Feel free to share your impressions, feedback, and comments. We are happy to hear your story.

Now, what about the future and the big vision? Well, we have a T-shirt saying “IPOs are so 2015”. It’s about democratizing global investments in growth companies. That’s for sure. But it’s also about us all living across borders, creating businesses and communities and investing, all globally. Some ask where is the next Silicon Valley, with its strong exit path to the US stock exchanges, NASDAQ and the NYSE. But what if the next “Silicon Valley” is not a place, but a platform?

In 2017 we will continue to grow in Europe and begin our first projects in APAC, we aim to introduce the first €1m round on the Funderbeam platform with the involvement of institutional investors, we need to get better in data, enhance the user experience, bring in more high profile startups and make payments around funding and trading much more smooth. 2016 was a groundbreaking year — we proved that the vision of three pillars and a liquid startup market can be a reality. 2017 will be the year of growth and strengthening our operations.

Enjoy the journey!

Kaidi & Urmas

Read the full report here.

Kaidi Ruusalepp and Urmas Peiker