Congratulations to Safello!
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Looking back at our investment from Seed to IPO
We are thrilled to share that our portfolio company Safello went public today on the Nasdaq First North after a successful and highly oversubscribed pre-IPO fundraising round.
Safello is a tech-enabled digital asset brokerage that enables the buying and selling of cryptocurrencies in a safe and compliant environment. Since its launch in 2013, the company’s mission has been to democratize the adoption of cryptocurrencies with full transparency and regulation at the forefront.
We were early believers in the Digital Asset sector, having invested in Cryex in 2014. However, due to an onerous regulatory environment, Cryex’s success was challenged and the company merged with Safello in 2017. Post-merger, our conviction continued to build in this sector. We stayed focused and involved during the more challenging years.
This transaction was also the catalyst for the partnership between Eric Martineau-Fortin and Sep Alavi, who, in 2017, joined White Star Capital and now runs the Digital Asset Fund. With Sep on the team, we led the first institutional investment in Safello and supported the company through all its private rounds and now as a public company.
Today, Safello has over 190,000 users and has processed more than 400,000 orders representing over 1bn SEK in volumes. Since its launch, the company has grown over 6000% from executing 300 orders per month to nearly 20,000 today. Safello reached profitability in mid-2019. With the accelerated adoption of cryptocurrencies over the past 18 months, the core market in which Safello operates is poised for strong growth globally.
Safello’s operations and economics benefit from the growth of the cryptoasset class as well as growing trading volumes in the industry. Earlier this year, Safello announced a partnership with Klarna, the Swedish fintech unicorn, and leading global payment provider to allow its users to directly purchase cryptocurrencies from their bank accounts using Klarna’s open banking solution. In addition, as the company continues its growth journey, it announced last month the acquisition of Bitcoin.se, Sweden’s leading cryptocurrency information, news, and discussion portal.
Company milestones since inception:
Product and Technology
Safello operates 5 distinct product lines today:
1. Brokerage: A proprietary application for buying and selling cryptocurrency at record speed
2. Safello Premium: A subscription service for different fee-tiers and value-add services for brokerage
3. Widget: A service integrated into the native front-end of external applications to enable buying and selling of cryptocurrency
4. Brokerage-as-a-service: A platform enabling 3rd parties to process cryptocurrency purchases quickly and securely
5. Safello Business: An SME/enterprise-focused offering that soft-launched in December 2020
Our investment in Safello was based on the following thesis. Fiat onramps and offramps were a bottleneck in the rapidly growing crypto markets — Safello’s frictionless UX/UI was a clear signal for its mass adoption. Regulation and compliance are key elements in running a successful cryptocurrency business — Safello has been operating under the Swedish FSA since 2013 and is backed by a top Swedish bank, Handelsbanken. The cryptoasset market cap was destined for exponential growth with major institutional adoption, and Safello’s brokerage and associated businesses were well poised to capture significant value.
Looking back, Safello has accomplished most of its long term goals including but not limited to:
1. Expanding its product offering to better suit the needs and extend the lifetime value of its customers.
2. Expanding its target audience in the Swedish market from retail to HNWI and companies.
3. Applying the hyper localization strategy to other parts of the Nordics and new markets.
4. Staying fully compliant along the way keeping a close relationship with regulators.
Safello continues to evolve toward a mobile-first, full-stack crypto bank from a product and technology perspective. The company is also scaling internationally outside Sweden and the Nordics.
We are excited about the growing trading and brokerage industry for cryptoassets and have full confidence in Safello’s business model and experienced team. We believe that White Star Capital can continue to bring significant support to the company’s vision as an investor and active member of the board of directors of the company.
We are proud of what Safello has achieved since our initial investment in late 2017 and have been very impressed with Co-founder and CEO Frank Schuil and the team he has built. Frank is known as a thought leader in the cryptocurrency space. His vision and dedication to building a successful business are admirable. Further, we feel he has brought on highly relevant and complementary talent to lead product, finance, and compliance at Safello.
On behalf of all of us at White Star Capital, a big congratulations to Frank, Niklas, Joakim, and the rest of the team on this incredible journey. We are proud to be an early investor in Safello and look forward to this new chapter from IPO and beyond.
About White Star Capital
White Star Capital is a global multi-stage technology investment platform that invests in exceptional entrepreneurs building ambitious, international businesses. Operating out of Guernsey, New York, London, Paris, Montreal, Toronto, Tokyo, and Hong Kong, our presence, perspective, and people enable us to partner closely with our Founders to help them scale internationally from Series A onwards.
Find out more about how we venture beyond at www.whitestarcapital.com or follow us on LinkedIn, Twitter or Facebook.
