Paysera STO has been cancelled. The investment was returned and I have invested it to FinBee and Reinvest24. Desico currently offers Kriptomat Securities*. Investors are promised 8% of all company revenue and 4% of profits over the next 20 years. Is this offer worthy of attention?
What is Kriptomat?
Kriptomat is an Estonian licensed crypto exchange* that my mother could use. Or anyone who can use e-banking. The platform has been translated into more than 20 languages. You can buy and sell around 30 main cryptocurrencies, so the choice is really good.
The purchase / sale deal is charged at 1.45%, so buying and selling a cryptocurrency and then converting it back would to euros costs 2.9%.
Why invest in Kriptomat?
The company is growing rapidly. Several months ago when the STO was announced, Kriptomat had 2 000 users, now over 10 000. According to unofficial data, the turnover has grown even more. That is great news for the investors.
On the other hand, the growth has been influenced by the recovery of the crypto market after the recession as fresh money is starting to move to the cryptocurrencies again.
The Kriptomat team is experienced and implemented several major projects (Spletnik and Platformax). I have been using Platformax’s automatic sales system myself. It has impressed me, the team took care of the needs of our company and thanks to this we attracted some new customers.
Kriptomat is already up and running. The company is reaching for big audience by producing high-quality translations in over 20 European languages.
Now they need funding for marketing and further product development. New customers will be able to use the product immediately and they will pay off the platform expanses from the second transaction – on average, one customer aquisition costs €3 and the average transaction fee is €5. This is a good news for the investors because Kriptomat shares both – earnings and profit.
This project has a chance to skyrocket. Paysera is a time-tested player from whom you can expect modest growth in the near future. Kriptomat is a real crypto startup and the current growth can turn exponential, so even with a small amount of investment, you can get a big capital gain. As far as I know, the latest financial reports and growth forecast for Kriptomat were audited last week and in the near future, the potential return calculator will be provided to investors on Desico website.
Kriptomat STO weaknesses
Income starting at 2020
Income and profit for the investors are calculated only from 2020 onwards even though the investment is made in the middle of 2019. This seems totally illogical to me – we take the risk now and only get the reward for it six months later. Paysera used the reverse option for investors – the income was calculated from 2018, before the investors even took the risk for the project.
Start-up operating for a year
The company has been in business for over a year. Banks often do not even consider financing a company like that. This investment is extremely high risk and very realistic to generate negative returns. However, high risk – high reward.
Fluctuations of cryptomarket
Crypto bear market started at the beginning of 2018 and has just finished after a year and a half. This is the most unstable market in the world and it is realistic to expect frequent slumps, which will make investors passive. The sales of Kriptomat will be likely to decrease significantly. The company started its business during the downturn, survived it, and gained some valuable experience. However, in a panicking bear market, I think it is unrealistic to expect a high level of investor activity on Kriptomat.
Kriptomat has a number of competitors in crypto exchange, such as Coinbase or Kraken. I’ve been using Kraken exchange since 2017 when they provided pathetic services when I had to repeat the order 20 times before it was finally executed. Since then, much has changed and now the exchange is running lag-free and it would cost only 0.4% of buy and sell total, or 7 times cheaper than Kriptomat. However, more than 30 million people use the Coinbase exchange for convenience where buy and sell transactions cost 2.98%, which is more expensive than Kriptomat.
Extra convenience costs money. I would not use the services of Kriptomat myself, but for a completely new user it would be an easy way to enter the market. I could compare it to FinBee – I wouldn’t borrow because it is expensive, but there are a lot of people and companies who prefer need financing quickly or like their customer service.
Interview with Dejan Davidovic, CBDO Kriptomat
I am glad that Dejan, one of the founders of Kriptomat, has agreed to share his thoughts with HonestFIRE blog readers. He has recently visited Lithuania and was presenting his company to potential investors.
Let’s dig in.
How did you like your stay in Lithuania? 🙂
I live in Slovenia and I somehow felt like home. We both have so much green nature, kind people, passion for basketball and a language no one understands. You have more lakes, while we have mountains.
Your business is really young, you started just over a year ago. Are you happy with the progress so far?
This has been an amazing journey for us. If I was told last year that we will achieve this much, I would not believe it. In a period of just one year, we came from our very first registered user to a business that is almost entirely covering its costs. We’ve done an amazing job and I’m very proud of the results our team has accomplished.
I’m more than happy that we are after our next milestone of 50k registered users. We have a stable and trustworthy platform and all of our KPIs are showing great results.
Is customer support your main strength compared to the competitors (Coinbase or Kraken)?
Kriptomat was designed to bring digital currencies into every household and to enable anyone to buy, sell and use crypto. Kraken is our respected and reliable partner and is one of the leading trading platforms. They are there for people that know how to trade, not for retail-oriented people. If you go and try to buy bitcoin on Kraken or Kriptomat you will see the difference.
Coinbase is the market leader and we love what they are doing and how. We have learned a lot from them. We have things where we think we are different and, as or users say, also better. I believe the basic difference is the local approach we are focused on, while they focus on established markets.
This entire market is still to become an industry and there is enough space for all of us.
How do you expect crypto market fluctuations to affect the growth of Kriptomat? How do you expect next bear market to affect the exchange’s growth and sales?
Our business model is based on buy/sell transactions. Market up or down we still make business. When I see the biggest telecommunication company AT&T announcing they will start accepting cryptocurrencies as a payment method I expect crypto assets will have a much bigger impact in the future and we will not be talking about bear and bull.
But still, 2018 may have been a bear market for cryptocurrencies, but it was a great year for development as the cryptocurrency industry underwent rapid changes in regulation and stabilization. It was also a year of advertising bans and the year that cryptocurrencies made their foray into mainstream financial markets — exciting yet turbulent times for the industry.
During the year we established the company, acquired licenses, developed a reliable and secure service, and worked on setting up the perfect environment for future growth. It made us productive and look for alternative solutions for the challenges we were facing.
I expect user acquisition and business results to continue with their growth. Once our offering is successful, I’m happy to know that our investors will benefit.
Would your mom or dad be able to buy bitcoin on your platform without your help? 🙂
15 years ago I was describing them what is the internet and how it works. They both said that it is too complicated and that they do not need that in their house. Today they both have smartphones with instant messaging apps, they use social media, they make video calls, they have wi-fi in their house, they watch smart-TV connected to the internet. All innovations face resistance to adoption and the same holds true for cryptocurrencies.
Our oldest user is over 80 years old and the average age of our users is above 40. They feel comfortable and safe using Kriptomat. My parents live in Slovenia and they would be able to open an account and buy bitcoin. There is no regulated all-in-one solution where they could buy it in the Slovenian language. So I believe the answer is yes, as soon as they become aware of its existence.
Part of your marketing, for example, your staff is described as wizards, seem to be aimed at gamers. Are they significant part of your users? Who is your main customer?
Looking at what our team has accomplished in the last 18 months I can easily say they are people with magical powers. We are pivoting in several different verticals and thanks to our strong partnership with the Enjin team, gaming is one of them.
At the moment the main part of our users is crypto newbies, followed by gamers and miners.
Paysera STO has been canceled due to slow funding. Do you see that risk with Kriptomat? Do you have a plan B if initial goal is not reached until June 22? Have you changed anything in the way you run your STO after failure of Paysera?
I’m really sorry Paysera management decided to revoke the issuance of the securities. I wouldn’t say slow funding was the reason, but rather a combination of several reasons. It’s hard for me to comment on that.
Doing an STO is really hard and it requires a lot of resources. You can expect only more mature teams and companies taking this path. I personally love what digital securities are bringing to the finance world. Especially the fact that the world which used to be there only for established investors is now becoming available to everybody. I expect this to have a big impact on how people invest their funds and it will surely be a serious game changer. However, at the moment, there is almost no success story in the EU. This is a brand new thing, an innovation, and a lot more can still be done to educate people and will be done.
I see that people from the Crypto sphere find STOs boring, institutional investors think it is too early and waiting for the regulated secondary markets, while retail investors are somehow afraid and waiting what will happen.
We believe this is the right path for us and we are doing our best to make it happen. We will do everything we can to become “the ones that made it”. That is why we will be publishing some changes in our Offering document this week. Main changes are:
- We are prolonging the time of the offering to be able to meet with investors, educate them, answer questions and build credibility on tokenized securities. The new end date will be September 27th, 2019. This means the offering ends once we reach the investment goal or the last day of the offering.
- We are publishing audited financial projections and an investment simulator based on those numbers. This way we give our investors a chance to see the potential of their investment and make an educated decision. STOs are a heavily regulated thing, which is why we had to have all the business analytics audited before we were allowed to publish them live.
You distribute dividends to the investors from revenue starting January 2019. The investors take the investment risk as early as May 2018 and there is a gap of half a year. Why has it been chosen to do it this way? Do you think it is fair?
Yes, of course I know that is fair. Transparency and simplicity are two of the core values of our company. We wanted a payouts schedule to be logical, transparent, is good and makes sense for business and covers the “what-if” scenarios. The last two mentioned were the ones we based our decision on.
After the offering is over and we decide to issue the financial instrument it will take some time for us to actually start using the funds we collected. As it looks now, we will actually start using the funds in late October.
We are an experienced team and the “what-if” is something we always take into account. We knew there was a chance that we would need to prolong the offering period because it might take time to start using the funds, regulations might change, we might have other challenges during the offering, etc.
As it looks right now, we were right.
Kriptomat is not the first business you develop. I have personally used Platformax sales system and it was working smoothly. Is running a crypto exchange different to other business?
We have been together for over a decade and we are a great team that combines innovation, experience, freshness, expertise and great management skills.
Setting up a business like Kriptomat is a unique challenge. There are almost no standards to follow and the ecosystem is still being built. There are some operations that require truly special care and as we are handling our users’ value you need to set up operations with a huge responsibility. It is different like everything we did so far, but we love the challenges as we are seeing the results.
What is your short-term and long-term goal with Kriptomat?
Short term is to reach 0,5 million users, long term is to have 5% of the retail-oriented crypto exchange market.
One sentence answer please: why would a retail investor be interested in your project?
I believe it’s one of a lifetime opportunity and the right timing to invest in an innovative start-up with an experienced team, working service with a proven business model with one of a kind dividends structure.
Is it worth investing in Kriptomat STO?
I am going to invest a small portion of my portfolio (1-2%) in this project. At first I was skeptical, but seeing how the team works and how fast this company grows I want to be part of its growth. The experienced team has developed a number of good projects, one of them used by myself, and my good experience contributes to my investment decision.
However, it is a very risky project and it is realistic that I will never get any of my money invested to the STO back. I believe that this investment is only for those who tolerate very high risk and are ready to wait at least 5 years before getting a significant return.
If you want to participate in this STO you can do so until June 22nd 2019. You can register to the STO using this link* (I will get a small commission for this, which will contribute to the development of blog).
P.s. Be sure to research the investment yourself before you making any investment decisions. In this article I only share my personal experience and it is not a recommendation to make any investment decisions. Do your own research.
*By clicking on this link you will be able to register for the STO and I will receive a small commission that will contribute to blog’s maintenance.