Luxembourg crypto compliance solution Scorechain is managing steady growth despite the crypto winter. CEO Pierre Gerard explains how the financial environment is actually helping the crypto ecosystem mature.
When Scorechain closed its €2m Pre-Series A fundraising round 18 months ago, it had big goals for accelerating growth and growing its network to LATAM, APAC and across Europe.
Then came the war in Ukraine, the global financial crisis and the crypto winter. “Like most crypto companies, we didn’t achieve our objectives,” says Scorechain CEO Pierre Gérard, adding: “But, in 2022, we were able to grow to almost 50% growth in terms of revenue.”
It’s an impressive story for a startup founded in 2015, a year after bitcoin lost 56% of its value, and judging by the bumps that crypto has seen in recent years, it’s presumably the kind of challenge a person in this industry becomes accustomed to. In spite of it all, Scorechain is clearly thriving.
Hidden trend from the inside
Today, the crypto-compliance firm has a team of 20 with more than 100 customers in 45 countries ranging from small players to banks. It occupies the top position in France, in terms of customers, and in Switzerland, in terms of revenue.
Gérard explains that customers are mostly crypto native companies at different stages of development, but also include larger firms providing financial services. Traditional banks are watching their step, particularly since the 2022 collapse of cryptocurrency exchange FTX, prompting regulators to raise concerns about bank involvement with crypto clients. But also because of regulatory uncertainty.
“We know that there’s still a huge potential that is not fully released and operational but we can see a hidden trend from inside,” the CEO says, adding that banks are investing in internal R&D and compliance teams to define a crypto offer for customers. “This is very interesting because it also helps us define what will be our product in the future and how it should evolve to better answer to the market needs,” says Gérard.
Building trust
By the time the firm marks its tenth anniversary, the CEO expects a lot to have changed in terms of crypto use cases. Similar to the internet’s evolution from first early adopters, through emailing and the birth of e-commerce and media, he expects to see new services arising that will see blockchain become fixed in the public imagination not as a technology but more through specific use cases and the Amazons and Netflixs it spawns in the financial services world.
While Scorechain has onboarded two major banks and is in talks with banks in Germany, it is not clear if traditional banks will be the biggest players in this world.
Bank crypto offers could take a number of forms, such as the tokenisation of financial instruments. “We can use this blockchain technology to provide new services and create more liquidity in some markets,” the CEO says.
A new opportunity
One thing that keeps the CEO upbeat about the future of the industry is the correlation he sees between traditional financial player crashes and crypto growth. Last week, the share price of Crédit Suisse plunged so dramatically, it nearly collapsed the Swiss bank. Yet cryptocurrency values have continued to grow since the start of 2023.
“Some people are finding value in crypto currencies,” says Gérard, adding: “Potentially it’s a new opportunity with new ways to create more stability in the financial industry, for everybody in the global economy.”
The CEO is hopeful that this stability will build trust in the crypto ecosystem and attract more companies who were previously hesitant about the technology into the industry.
