We are happy to announce that the Creandum funds are investing in KnC – a world leader in crypto currency payment processing and associated products and services. KnC is one of the largest and fastest growing Bitcoin companies globally and from its operations in Sweden serves customers all over the world.
We are convinced that much of the future innovation in the financial services space won’t come from banks themselves. They are too big, slow and generally have too much to lose. This is the key reason we are constantly meeting companies looking to disrupt the banking system both in the Nordics but also in the US where a quarter of our team is based. Over the past 10-20 years Bitcoin is definitely one of the most interesting phenomenon we have seen in this space – and KnC is one of the most interesting companies we have come across.
KnC started off with a retail business, designing, building, selling and shipping Bitcoin mining hardware to customers all over the world. The Bitcoin mining equipment verify transactions between senders and receivers and for that receive a small reward – because of that they are also often referred to as Bitcoin payment processors. From the initial strategy KnC shifted its business to large-scale industrial mining currently operating one of Sweden’s largest data centers. Recently they have launched a cloud-based mining service and developed consumer applications like the KnC Wallet. They have done all this in less than one year while generating a turnover of approximately $100M. The KnC team has executed at an extremely high pace as well as demonstrated that KnC constitutes an attractive platform that can be leveraged into several crypto currency opportunities. Needless to say, we are very impressed by what they have accomplished to date.
Besides the team, a bet on KnC is a bet on increased adoption of crypto currencies and in particular Bitcoin. KnC has the opportunity to establish itself as a key part of the Bitcoin ecosystem – an ecosystem that is still immature but there are indicators pointing in the right direction (e.g. increasing trading volume, increasing merchant adoption, decreased Bitcoin ownership concentration). In the past we have seen several examples where payment and bank infrastructure players have built attractive long-term positions. We believe KnC is in a unique position to build a defendable position in this space – and hopefully becoming the payment processor of the 21st century. Today’s announcement of Paypal entering the bitcoin world further increases our excitement.