CVA Podcast: Mathias Ruch, CV VC / CV Labs

Transcript

[Music] hello hello this is your host trash ahmed and welcome to the season two episode finale of the crypto valley association podcast now let's discover together some of the growing trends of this fast-moving space and try to shed some light on the mysteries it contains today we have a very special guest joining us matthias the entrepreneur and investor who co-founded the crypto valley labs a unique network of tokenized co-working hubs designed to support and grow the worldwide blockchain ecosystem by connecting blockchain pioneers service providers and innovators of all kinds so let's dive straight into the crypto valley

hey matthias how's it going hey shiraz going good thanks for having me uh it's a pleasure well let's let's let's dive straight in i mean maybe you can tell us a little bit about your first blockchain related experience oh my first blockchain related experience so i am not one of those early bitcoin adopters i was actually taking a closer look into the crowdfunding space back in 2013 14 i would say and you know it was that the whole crowdfunding space was supposed to take over the vc space and i thought that was really interesting and that's when the first large you know crypto based blockchain based crowdfunding events took place uh you know

you all remember the dao i of course read about the dao and that was really when when i you know was all into it so that was back in when was that 20 50. wow wow okay that's uh quite some time ago but did you get the chance to to invest into crypto that that early on yeah we took a bit of a different road so we were so why were we looking into the crowdfunding space we were developing a new investment model and when we were starting our initial company so the predecessor company of cvvs and cv labs was called lakeside partners and we were founding that in early 2016 and you know it was basically we were saying listen since we are based out of the heart of crypto valley let's take a

closer look at this thing called crypto value that's what we did so we talked to everybody to the you know to the authorities to the projects that were here and even to the federal government and and we quickly realized that there's something big happening but we also realized that there is a lot of speculation and and a lot of immaturity in the space so we basically we refrain from investing at the time in the in the in the assets at the time but we were investing in the local ecosystem instead so building co-working spaces creating an advisory starting conferences and blockchain competition so we took a bit a different path and waited for you know let's let's call it the the common sense

back in the system to start that very strategic and and sustainable investment approach in in the blockchain space yeah totally understandable and uh yeah building up these infrastructures is very very important do you believe that any of this rationality has come into play now or the markets are still rather russian would have been a different answer a couple of months ago right so um well the the fact what we see today and you know the fact that everybody is looking into our space again is because there is institutional money coming in and so this is here to stay which is it's sustainable and and which is which is very good good for us and of course there is new spaces

within that big space emerging and and there's speculation in it again which is fine but but you know in general the current situation and and and even the future looks very very bright for all of us glad to hear that yes and so maybe you discuss a little bit about uh the crypto valley and this is the crypto valley association podcast and we actually don't speak so much about the crypto valley itself maybe you can tell us a little bit more about it and your journey within it as you've seen it really grow from from what it was to what it's become today yeah so when we um started to look into the crypto value that was pre crypto valley association and and of course the the founders of the crypto valley association we were a founding member of

of the crypto valley association that was a very small group of people uh remember there was a meet-up series called first tuesday where you know the people the small group of people would meet up every tuesday at the at the restaurant close to the lake that's when all the initial the first generation projects that came after ethereum were presenting themselves so there there wouldn't you know there was no week without one of the international um projects coming here to zug and wanting to showcase what they have if you if if i go back how this felt people were actually ringing at our door and we're asking if if this was crypto value and and you

know they were really looking where to meet where to regroup where can i find like-minded people where are the pioneers and everything so there was a large demand literally we had i remember in the early days i think we had some 200 requests per week from you know people coming there you know wanting support investments connections how do i set up company how do i uh conduct an ico you know what's there to take into consideration so that was actually really that was kind of overwhelming and you know also the meetups they grew in size very very fast and and it was just very exciting and and you you know you

had all these people here all the the the pioneers were here and you know when we were talking to people from other global hubs such as singapore or new york at the time people were telling listen your event might be a bit smaller in numbers but the the amount of the the real people as i said the pioneers the founders the project leaders the thought leaders that are amongst the 50 people maybe instead of 100 or 200 in these other places it's just amazing so you could really talk to them and you could share what your vision was it was just really everything was possible at the time that was really exciting we kept saying that's what we said to each other

we woke up one day we opened our door and we realized that silicon valley has moved and is now called crypto valley that was a bit the perception uh at the beginning oh i see i see and then we decided to to found the crypto valley labs and now cbsbc would you care to tell us more about this this kind of transition into these ventures exactly so instead of investing in the digital assets at the time the tokens we invested in in our activities in the build out of this ecosystem in infrastructure if you want to call it we launched i think one it was europe's first blockchain competition in 2016.

uh when we were focusing on on verticals i that was blockchain for insurance and etherist for example was part of of that and we were just adding a price tag we didn't know you know where should we start and we added a hundred thousand and we were the biggest competition at the time in the blockchain space with that price tag so we had a lot of attention a lot of incoming proposals and and we quickly realized well that there's really a lot of traction here and out of this blockchain competition we wanted to kind of showcase the 10 best startups that were in this competition to a crowd to an audience and and and so we we we launched the cb

summit which was the first conference here in crypto valley taking place at the casino theater where you know i think it was half a day in the beginning where we started to to know to have some panels some some corporates some other startups and of course we had the finals of this blockchain competition and that's how we launched this event uh series called cvc cv summit we did that twice a year the 17 18 19 was the last time you took off it now and um so so you could really see the ecosystem grow and you know what we also quickly realized was there is no like uh a main place a location where people would gather

they would you know they would group in at starbucks or you know at apartments and we said let's build a co-working space let's build a place where everybody can meet with the crypto cafe and everything so we were looking for real estate uh within you know very close to the station and that's not easy to find in zuka and we were happy to find this uh this building that we are in this four-story building that we are in today and we launched that in 2018 early 2018 and the you know crypto valley started to to grow even even faster and it was around that time after you know it was foreseeable that something like crypto winter you know would eventually happen and and and we were saying

this is probably also something that needs to happen and we were you know when we were anticipating this you could you could tell by the the different kind of people and projects that will come to to switzerland at the time you know by some at some point the paypal mafia was here they were calling us and they're asking hey when can we have lunch we want to understand what's happening here and you know bigger projects just just with with a different scope would come here and then we said okay now we have to uh actually start our strategic investment approach and and launch cvvc in in also 2018 in in summer 2018 launched some capital started to build out

launched our own incubation program had our first incubation program in late 18 if i'm not mistaken where up to 20 startups would come to our 10-week program to zook and we would invest up to 125 000 usd in against 10 equity so we started to actually invest in the companies now what we are doing from an investment perspective we are investing uh in the second layer so not in infrastructure but you know in the bricks and shovels of the um of the space applications and service uh based on blockchain technology that's probably a bit of a difference to the

asset focused or digital asset focused um investors um out there and we started to invest we had another incubation program we made some direct investments so that we have 27 investments today in our portfolio and we are still growing so cbvc is a global company only 10 percent of our deal flow is from switzerland to rest is international we have opened cv labs hubs in addition to um zug in dubai and uh fatus liechtenstein and we are planning to an additional one in in asia in southeast asia so we want to tap into these other large global ecosystems in order to

it's very simple our business our mission is very simple always find the best global startups in this space and always have enough money to be able to invest in them as simple as simple as that wonderful well it's great it's great to hear the the expansion plans and bringing this kind of name the branding of of the crypto valley out to the to the wider wider world i think that's uh that's that's beautiful and and so you're also the the co-founder of swiss blockchain federation i mean how has that been going what is the purpose of this federation yeah that was very much alongside the crypto valley association where crypto value association is a large association with a lot of members and

very much focusing on ecosystem and and you know bringing the the ecosystem players together and really facilitating and nurturing the ecosystem when the blockchain federation which was initially the blockchain task force uh headed or patronaged by two federal councillors willie mauder and johann schneiderman back in 2017 was really focused on building the bridge to burn and burn being the capital of switzerland where the government is is where the parliament is because we could really not only feel but when we were talking to these authorities we we would realize there's a large gap between what's happening here in crypto valley where everybody understands this

opportunity i personally think this is one of the biggest opportunities of switzerland of of the century and probably the biggest opportunity of my my professional life but parliament and um you know decision makers wouldn't understand the scope of this opportunity so we have to build a bridge and the goal of the federation and initially the task force was really to create legal certainty to create a legal framework a regulatory framework that was sustainable and you know would would increase the attractiveness and competitiveness of switzerland as a global blockchain hub and the federation is just a continuation of the blockchain task

force together with cantons the swiss cantons in switzerland so it's a public private partnership that still has the mission to um you know develop or yeah further develop the the framework the legal framework the regulatory side of things um as well as and that's new from 2021 to support the space with innovation in the sense of that we were or we are launching this year the inner booster program which is a it's a it's a federal program called in in our case blockchain nation switzerland with the goal to really you know help develop the ecosystem which is already very very well

developed we have regulated players we have a regular great framework that will be in place in summer and we have infrastructure we have great protocol projects here in switzerland we have a lot of service providers universities so we have talent we have everything it takes to showcase the potential of crypto valley and blockchain nation switzerland to the world so you have to bundle what their what is there and you have to show the world what you can do with this technology and this is probably what i'm you know most excited about this year is really with the new regulatory framework with the what we are anticipating that the the boost that it that is gonna come in the digital asset space based on on these um development recent

developments this is gonna be that's my personal opinion this is gonna be a bigger boost that we saw in in 1617. it's going to be even bigger and more sustainable and that's why i'm so so excited and this in a booster program so the the innovation part of blockchain nation switzerland is a four-year program and it is it consists of an innovation cycle that will restart every year and and it starts with ideation which is basically an open innovation platform where everybody the whole community can you know launch ideas challenges that are you know based on the opportunities in the blockchain

space it goes then into at least one hackathon large hackathon in all the different parts of switzerland where we want to create prototypes very fast because the goal of the whole cycle is not to create ideas but to create startups and projects that could be in incorporated by being picked up by corporates which brings me to the third phase of this cycle which is called corporate acceleration developing use cases basically and then in the end they can john join our incubation program everything paid by the government uh and you know hopefully you are as good in in as part of this program that we are going to invest in the entire cbvc so that's really what i am you know most excited about

this year wow okay that's wonderful it really sounds like all the stars are aligned within switzerland it feels like the puzzle the pieces of the puzzle are coming together this year i have to tell you that yes but not only in switzerland i think that's a global phenomenon when you when you take a look at what's happened the past three months that's just amazing yeah i i agree with and and so do you believe that other regulations apart from switzerland already uh following that trend and i i see that the swiss legislation is coming kind of coming together with this entrepreneurial spirit and and with the space as a whole but do you really see that abroad in other countries as well how do you see that yes of course and i mean um a lot of other countries have caught up you know

if you look at look at hong kong if you look at singapore excuse me japan korea well korea maybe not on the regulatory side of things a lot of these jurisdictions have um already very progressive forward-looking forward-thinking regulatory frameworks that allow for a lot of different business models to become active so the swiss way probably wasn't the fastest but it's probably one of the most sustainable ones right so i really think that the framework that switzerland has put in place or is putting in place this year is a very smart one it's very light it's just it's small amendments in the different aspects of our of our legal framework

which just basically basically creates the the fundament for any any business model based on this technology i see it's uh it's great great to hear and and it's good to see that you're you're really like driving all of these different uh different parts in in tandem together and you have so many occupations a very important person uh within space i mean are there any other interesting ventures you wanted to mention that kind of uh play a role within this you also mentioned an african uh incubator as well when we were discussing i mean and anything else you you you believe is supporting in this group yeah i it's a it's a global phenomenon right and if you look at the at the different um parts of the

ecosystem and and you know the opportunities that are linked to different sort of socio-economic or economic and even demographic based basics a lot of regions in this world become very attractive from both a vc perspective but also from a perspective of what you can bring to a society or a country and and our activities our planned activities in africa go back to a couple of trips that we were able to take together with the swiss embassy or the department of foreign affairs to south africa to mauritius and you know what we the basic the key takeaway is

wherever you go to whomever you speak the potential of blockchain and what it could potentially do to you as an individual but also to you as a business owner or a member of a society it resonates with each and everyone and each and every one leaves the room with a full of inspiration full of ideas but they could change their life and this happened to us very much so in africa and drove us to take a closer look uh to the status quo of you can call it blockchain nation africa when we came to the conclusion the potential is huge and we want to tap into that potential and basically the initiative that we are

about to launch together with the swiss government is called blockchain for africa and our goal will be to invest in over 100 startups over the coming four years that have the potential to tackle the challenges of the african continent so we are very hopeful to to being able to launch this um uh initiative this year the goal of course is to start with incubation we use our our existing program as soon as covid allows to also go abroad and and [Music] you know have these incubation programs on location which of course due to covet has been difficult the past years of course we've changed everything to hybrid so that we could have a fully virtual

program if needed so maybe the next thing thing i'm which is very tangible i'm very much looking forward to is our own incubation program here in zuk that we have been postponing to later this year starting 27 september that date is for sure everybody who hears this if you have a great blockchain idea a project a prototype an mvp and you want to develop it further to a startup get some funding apply for our incubation program taking place in in september this year so hopefully this can be on location physical meeting all of you what i still uh enjoy most uh in the space and also as a vc is you know interaction with the founder the the the

great minds behind the projects uh and learning more about their ideas wow that's it's inspiring even just uh hearing you talk about it so wonderful and hopefully hopefully that will be the case and um maybe that is a good a good question to bounce uh bounce off on is uh how did this whole coven 19 pandemic uh affect your your business uh life and on all these ventures it slowed us down i think it slowed the whole the whole world down on one side there's always two sides to to a crisis right and and you know that for us the positive side of course is the digitization push you know caused by the socio economic circumstances the pandemic that

drove everybody probably globally everybody into digital in in as in a in a it's never seen before i think you know all know the stories and you all talk to people that probably before uh covet never were on any assumed call before and now probably everybody has it has has had a zoom call these days even my mom and i are assuming so this this is really this is really extraordinary and of course since we are in a digital space since we are technology based vc this helps we've identified six verticals in our investment thesis that are directly based on the socioeconomic

changes that we've experienced recently all of our startups have been very fast in adopting to the new normal i think the the faster you can adapt to the new normal in any area the you know the the easier it will be for you and the faster you you are also back to a new normal yourself and so that's the positive side of things on the negative side of things of course we couldn't have any any conferences we couldn't travel we were we were we were about to start the development in in asia if you cannot travel you're not going to close deals you're not if you cannot talk to investors you you you cannot develop as initially planned and so we were

slowed down luckily during summer there was a relief at least here in europe uh and then you know uh winter came and and everything was back to slower um again so you adopt it takes longer but i think in the end for us and again i really have to say we're lucky to be in the in a digital space uh we will come out at the end of the tunnel stronger and you know fully positive with with uh what the future brings for our space wow that's uh that's great to hear and it's wonderful to hear that positive uh twist was important to see the silver lining even throughout all this uh you know the sun came out here in sioux today and

temperatures i think last week temperatures were like minus 20 degrees celsius and today it's almost 20. so maybe that's also a lot of positivity when you know when you can when you can actually smell and feel spring coming and and i think that's really really an image that that that i think is true for the whole development i think there is a light at the end of the tunnel i'm very positive about the future let's get it over with the pandemic and um start to recreate and redevelop or further develop what we have started yes i agree move on bigger and better things well well thank you so much matias and maybe do you have any final words for our listeners uh today

well i mean if if you have been following crypto valley from the very beginning and if you went through the highs of the ico craze back in the days and then experience the crypto winter i am really absolutely strongly convinced that we are going to see an even bigger wave in the future with the regulatory framework in switzerland and also abroad coming with the digital asset space maturing with the institutional money coming into the space i i know not all everybody likes to hear that but that's going to push the whole technology the whole ecosystem to a next level it's gonna be

an even more exciting ride in the very future great to hear well thank you so much uh once again and if you enjoyed this conversation feel free to check out more on our website cryptovalue.swiss where we host plenty of events educational content and even provide information on how you can join our growing community so thank you matthias for joining us thank you charis thanks for having me my pleasure stay tuned stay safe and until next time from the crypto valley in switzerland bye bye