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The PayPal for cryptocurrency trading: New trading platform moves out of beta testing

Smart Company logo Smart Company 12/11/2019 Peta Short
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As the popularity of cryptocurrency started to rise a few years back, consumers were looking to spend their new digital stash of cash online in place of a credit card. The problem? The confidence that you could legitimately use cryptocurrency without being defrauded.

Brothers David and Ed Sapper, along with a third partner, saw this concern and an idea came to them: they wanted to build a trading platform that would have the same credibility as PayPal does for online purchases.

“It’s ingrained in our heads that no matter what website we go to, no matter what we buy, if it’s a PayPal checkout bot on the website we automatically assume that, you know, PayPal has our back,” says David, co-founder and chief operating officer. 

“We really wanted to create that middle ground for the users where we could say, we are licenced, we are regulated, we are insured, and provide that trading with confidence.” Sapper says. 

Disrupt and innovate with quarterly advances from Radium Capital. This fintech can provide early access to your R&D refund. 

BlockBid is registered and licensed with Australia’s government body for financial transactions, and works with underwriters in the UK to ensure users won’t lose their money. 

Not “just another kid on the block” 

It was really important to Sapper that Blockbid didn’t white-label its platform; owning the platform meant the team needed to invest the time and money into building the platform from scratch.

“To build a platform that allowed us to transact faster, quicker than any other platform out there, while at the same time maintaining functionality and security, to also a back-up system that we got insurance for, was paramount from day number one.

“Because otherwise we’re just another kid on the block, that’s just coming out with the cool thing that’s going to get a little bit of money.”

The Melbourne based startup raised AUD$1.3 million in late 2017, followed by a family and friends round. But this wasn’t their only option for funding.

In early 2018, Blockbid worked with PWC to understand their books, as accounting for cryptocurrency funds was all relatively new and the team needed to better understand how to realise future profits. 

After connecting with PWC, the team decided the government’s R&D tax offset would support the required innovation and product development. 

Not sure if the R&D tax offset is for you? A business might be entitled to the tax offset, if it can demonstrate it has undertaken eligible R&D activities. Eligible R&D activities are considered experimental activities testing a hypothesis where the outcome is not already known or cannot be known based on existing knowledge.  If a business can demonstrate it’s eligible for the R&D tax offset, it might be entitled to either a 43.5% refundable tax offset or claim the non-refundable 38.% tax offset.

Sapper and the team became aware of Radium Capital — R&D finance experts that help businesses access the innovation grant money before, rather than after, the end of each financial year. 

“We went through stages where we worked with [PWC and Radium] to update our records and provided the required information then Radium Capital gave us the advance that we needed at a very critical point of production and development,” Sapper says. 

“It allowed us to not only build a team as we needed to, but also [Radium Capital] allowed us to look at very different areas of where we could actually further provide these kinds of services to our users.”

“We needed all hands on deck, at all times”

The process for Blockbid was simple, according to Sapper all they needed to do was: log into the Radium Capital online portal and upload all the relevant documentation. From there, once approved, Radium Capital can provide quarterly advances. 

“So Radium Capital provide quarterly advances based on the R&D work that you do,” Sapper says, explaining how access to the grant freed up cashflow within the business. 

“But the [idea] was that we won’t have to go through a process of raising capital, or raising through equity, at a stage where we were going through extreme growth, and we needed all hands on deck, at all times.”

Applying for the R&D grant, Sapper says, was a really useful process to better understand your own business in terms of determining the viability of the business. 

“It provides a really good backbone, when you go to investors, based on the fact that they need to see the approved R&D. It gives the ability to show that what you are doing is innovative enough that it is disruptive technology.”

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