Startup News & Analysis

Blockchain marketplace startup CanYa raises $12 million in Australia’s second-largest initial coin offering

Dominic Powell /

Canya

The Canya Founders, JP Thorbjornsen, Kyle Hornberg, and Chris McLoughlin. Source: Supplied

Blockchain-based services marketplace CanYa has completed Australia’s second-largest initial coin offering (ICO), raising $12 million in cryptocurrency Ethereum over a 30-day period via a crowdsale of its CAN tokens.

During that period, the 2015-founded startup also completed the acquisition of a majority stake in online bug bounty platform BountySource for an undisclosed amount, taking the platform’s 46,000 members under its wing in a move that CanYa co-founder Kyle Hornberg says is unprecedented in the ICO and cryptocurrency space.

“Over the past months we went to any blockchain or crypto conference we could get to — if it had crypto involved with it, we were there. At one of those conferences we became aware of BountySource and the interest the founders had to exit the business,” Hornberg told StartupSmart.

“We realised their company and values were directly aligned with ours, and as was the other major stakeholders. From there, the dominos began to fall — we saw the opportunity and took it.”

Right in the midst of their own ICO, Hornberg acknowledges the CanYa team had their hands full, but with 46,000 users on BountySource’s platform, the acquisition opportunity was too good.

“This means we come out of our ICO with over 50,000 active users, and two demonstrable use cases for our tech. We had to strike while the iron was hot,” he says.

Not wanting to detract from the original services marketplace behind CanYa, the company has pooled together a new team to focus on running and integrating CAN tokens with the BountySource platform, while the founding team focuses on CanYa itself.

Overall raise exceeds $20 million

Combining its presale and ICO amounts, the blockchain startup raised a total of 11,013 in digital currency ether. Around 4500 of those were raised during the presale, and were valued at the time at a total of $1.5 million.

However, at the time of publication, those 4500 ether tokens are worth approximately $8.1 million, bringing the total amount raised to more than $20 million. The constantly fluctuating price of ether makes the raise amount quite difficult to definitively state, laughs Hornberg.

Despite this, the team will be keeping a chunk of their raised funds in ether, with the team being “bullish on crypto in general”, says Hornberg. However, he acknowledges it would be “naive” to keep all the funds in a volatile asset such as Ethereum, saying the funds have been diversified and will be actively managed to “maintain the integrity of the project”.

The startup’s CAN tokens will commence trading today on two online cryptocurrency exchanges, with “a few more” to announce in the coming days. The tokens are entering exchanges priced at $2, meaning the company’s market capitalisation is already exceeding $US80 million ($102 million), say the founders.

The team is hoping the tokens won’t go the same way as some others have upon entering secondary markets. Instead, Hornberg says they’ve been actively trying to discourage any “pump and dump” mentality.

However, though the ICO has been “their baby”, he acknowledges the token’s success is now in the hands of investors.

“We can only really affect a few things: getting a rock-solid team and pouring a lot of energy into our community. The proof will be in the pudding,” he says.

Development of the CanYa web app for launch in global markets is “well underway” for a launch in the first quarter of 2018, says Hornberg, with the team confident of hitting all of its roadmap targets.

Higher calibre ICOs on the way

With a spate of successful Australian ICOs raising at the end of 2017 — most notably Power Ledger’s $34 million raise and Horizon State’s $2 million — Hornberg believes the calibre of the raises will continue to improve. But, he says, the amounts raised may trend down.

“Everyone talks about a cryptocurrency bubble, and it may or may not be, but I do think the days of raising $200 million with just a good idea and a whitepaper are behind us,” he says.

“The community expects a higher calibre of ICO.”

The environment in Australia for completing an initial coin offering is also friendly from a government and regulation standpoint, with Hornberg saying the government is “pretty forward-leaning” when it comes to ICOs. However, Hornberg says a number of law firms the CanYa team consulting with were “completely in the dark” when it came to coin offerings.

“I think there’s some catching up needed on those avenues,” he says.

*The author of this article holds a small number of CAN tokens.

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Dominic Powell

Dominic Powell is the lead reporter at StartupSmart.

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  • JW

    Woohoo! Some kids convinced some other kids to give them millions in car wash tokens.
    Wait what does their company do again? You forgot to mention…

    • Rohan Baker

      I was going to ask that exact same question.

      Seriously, WTF do they do again? Raise capital? Is that it? No other services or products that involve value adding of some description?

      And how do you get any dividends as a stakeholder? Can you get that dividend in a fiat currency of your choice and therefore go purchase groceries at the local woolies? Or is it just these made up ICO tokens?

      But are they paying dividends from attracting new stakeholders to get in on the action then use that incoming capital to pay the dividends? Because you can’t rely on the price change of bitcoin to do that as these clowns will be taking a cut so they can live off.

      This is starting to look a giant Ponzy scheme to me.

  • Jan Deane

    Reminds me of tulip mania in Holland in the 1600s. All goes well until someone thinks “what the hell?” and cashes in their chips.
    I think this may end in tears.

  • SunShine

    Before people comment, they really should take the time to learn — about crypto/tokens/blockchain and about this business. I think this is exciting. I’ve poured months into my edu. Months! I’ve gone from hmm, this is crazy to now, I get it..and yep it’s good. Very good. I sent a few emails to this project, with questions. I’ve read the white paper. I scoured Australian papers looking for info. I have run businesses for decades. I’m cautiously optimistic that these guys are playing at the top of their game. Ok, so what is lacking? That’s always the question. Right now, it’s their social and mass media marketing. I read this and felt troubled: “However, though the ICO has been ‘their baby,’ he acknowledges the token’s success is now in the hands of investors. ‘We can only really affect a few things: getting a rock-solid team and pouring a lot of energy into our community. The proof will be in the pudding,’ he says.” Does that mean that the community is in change of international social and mass media marketing? If there is one thing I have learned from helping other businesses grow, it is that a great business without an emphasis on communicating who you are, what you are doing, why you are doing it is a business that is walking alone in the desert. People knowing — that matters. If the business does not take a lead in providing those answers to the world, then the value of the coin will plunge, people’s minds will fill with the info that is available (generally rumor), and they’ll soon be battling online public opinion, which will affect the app. New businesses make this mistake so often that it is normal to me as well as baffling. But, it’s just like life: the popular kids get access to stuff and people that the unpopular don’t. People are important, particularly what they know and think about you. Let’s here your business stories CanYa. Lots of them. Don’t shill. Talk.