Case Study Number 7: Switchless/BitX
Digital currencies such as Bitcoin have been hailed as the future of financial systems. Cryptocurrencies’ decentralised system is reliant on blockchain technology – in short all transactions are encrypted and stored in a vast public ledger called blockchain.
Founded in 2013, Switchless/BitX’s business model is based on a dual synergetic approach;
- Switchless is a platform enabling leading banks, private wealth managers and brokerage firms to transact Bitcoin. This B2B software offers the following modules: Wallet, Vault, Brokerage, Merchant services and controller – which manages interactions with existing banking infrastructure such as online banking and KYC verification.
- BitX is a B2C exchange platform which enables end users to buy and sell Bitcoin. BitX is live in South Africa, Namibia, Kenya, Malaysia and Indonesia. The company focuses on high growth countries with large populations where the need for and impact of cryptocurrencies are likely to be the biggest and where the barriers for adoption are lower than in the developed markets.
Switchless/BitX is led by well-rounded founders with top finance with engineering talent; Marcus Swanepoel has worked for Standard Chartered's Leveraged Finance team in Singapore, 3i and Morgan Stanley while Timothy Stranex was a software engineer and tech lead at Google in Zurich.
Switchless successfully completed a pilot project with Standard Bank in South Africa in 2014 thus becoming the first company to build a fully-integrated and operational Bitcoin system for a large multinational financial institution. A growing number of banks in South Africa, South East Asia and Italy have also expressed interest in the technology.
Ariadne Capital’s fund invested £250,000 into Switchless/ Bitx selling its stake less than two years later at a profit as the startup took in strategic investment from Naspers. Ariadne’s bearhug contributed to raising the company profile through its dedicated communication channels, thought leadership on the EntrepreneurCountry website, speaking opportunities at the EntrepreneurCountry Forum and at the Follow The Entrepreneur Investor Summit. Ariadne also assisted in the company’s market development strategy by managing C-Level meetings with leading international banks.
Switchless/Bitx exemplifies Ecosystem Economics™ for the following reasons:
1. Switchless/Bitx is a Digital Enabler to leading banks and retailers helping them build a Digital P&L
2. The company’s B2C2B approach places consumers at the heart of its business model; Switchless/BitX leverages its B2C application to help its customers, now Naspers in particular, to become platforms.