Impact-tech: How a scrappy blockchain startup is defining an industry
Two of my recent posts discuss the tailwinds in ESG and that transparency is the key to it all. Still, one critical question keeps me up at night: How do we ensure that the transition to a more sustainable future actually delivers on the social and environmental mandates it promises?
As a VC investor passionate about driving impact, I decided to highlight one of our portfolio companies working to answer this exact question.
If you’re a startup, I hope you can use this case study as a guiding framework. I’d also love to hear from you! Please comment below or DM me on Twitter to get in touch.
If you’re an investor, I hope this encourages you to take a hard look at investing in impact-tech.
Topl: A Blockchain Built for ESG
Topl has built a cutting-edge, impact-specific blockchain to bridge the transparency gap companies face in proving their ethical and sustainable business practices.
Topl is part of a growing ecosystem of startups solving the barriers preventing more widespread ESG adoption.
This case study is meant to showcase Topl, their powerful technology, their consistent adherence to their own impact goal, and how they use all of that to drive shareholder value.
A Global Problem Finally Meets its Match
The company’s own journey, of course, starts with this team.
The founders Dr. Kim Raath, Chris Georgen, and Dr. James Aman met at Rice University’s Center for Computational Finance and Economic Systems (CoFES). Their shared interest in socio-economic problems, computational analysis, and technology led to their first discussions. A shared passion for challenging the status quo made them a team and in 2017, they formally established Topl.
Topl’s founders have always had ambitious dreams rooted in the belief that transparency and monetizing impact are key to building a world where purpose and profit go hand in hand.
I’ve been fortunate enough to watch them bring that vision to life.
Building a break-through technology, turning it into a product-based, high-growth company, and solving some of the globe’s most pressing problems is no small feat. James, Topl’s CTO, has a Ph.D. in experimental atomic physics. He is uniquely capable of conceptualizing and building out technical and complex solutions. Chris, the Chief Architect, is a key thought leader in the blockchain space. He’s spoken in more than a dozen countries and at the United Nations. Chris possesses an expertise and a way of delivering information critical to creating an impact-focused slice in the blockchain community. Kim, the CEO, is a South African immigrant who spent time traveling around the globe and working in remote communities before getting her Ph.D. in statistics. She has unparalleled insights into the impact of corporate policy and technology on sustainability.
Together, these three have built the world’s first proof-of-stake, purpose-built blockchain and they put their money (and expertise) where their mouths are.
Impact Drives Every Decision
Topl is committed to ensuring its mission, team and technology are all impact-led. This conviction has proven to be a huge factor in the company’s ability to attract top tier talent (they are hiring!). Topl’s commitment to their mission of transparency and sustainable impact echoes throughout the very fabric of their daily decision making, from internal operations to the technology itself.
Topl’s blockchain is built with impact at its very core. It uses an energy-efficient, proof-of-stake algorithm, is purpose-built with the flexibility to be used even in low-tech contexts, incorporates a stable fee structure, and uses asset-tracing rather than balance tracking. All of these features give Topl’s blockchain maximum accessibility and adjustability, ensuring it can be applied as a viable solution to a variety of real-world problems.
The team is 40% female and Topl’s board members represent a broad diversity of cultural and ethnic backgrounds.
Topl’s go-to-market strategy was built to be inclusive and ensure that their blockchain becomes accessible to anyone looking to track, measure, and quantify their impact. Their blockchain-as-a-service (BaaS) offering supports startups already working to track and trace their impact — from conflict-free diamonds to sustainable fashion to ethical coffee — as well as major industry players. For example, Topl recently announced their partnership with publicly-traded company TrackX — a SaaS-based enterprise asset management and supply chain solution provider. The two will work together to provide a verifiable track and trace solution to meet the increasing demand for greater supply chain sustainability, transparency, and efficiency.
Executing on the Vision
You can’t solve some of the globe’s most vexing problems without money. Kim and her team just closed a major funding round covered by Crunchbase, but I can assure you it wasn’t a walk in the park. Topl’s total funding is now over $4M, with a portion of that being raised during a crypto winter and during a time when traditional investors still thought impact meant you had to sacrifice returns (spoiler: they were wrong).
Investors are finally starting to realize the potential of this over-looked market opportunity, so 2021 might shape up to be the year that impact-tech finally becomes one of VC’s darling children.
But, the tailwinds haven’t always been like this. For the past 3+ years, Kim and her team had to apply a long-term approach to raising capital. They steadily and patiently educated investors on the value of impact and the vital need for infrastructure in the impact space. The success of Topl’s most recent oversubscribed raise against the backdrop of a global pandemic, when VC funding for female founders has dropped to a three-year low, is truly astounding.
I’ve witnessed Topl’s growth and participated in their journey as an investor and a Director on their Board. I’m now lucky enough to call the founders, and the Topl team, friends.
To summarize, I credit Topl’s success to three key things:
- Weaving Topl’s impact values into every decision made from product strategy to fundraising
- Recruiting exceptional talent to their team, their board, and their cap table
- Executing on business goals while also building an ecosystem of customers, investors, employees, and supporters, all dedicated to building a world where purpose and profit go hand in hand.
Fun fact: If you’ve read any of my work before, you know Gabi Skoff. I actually met her through Topl and she continues to be instrumental in helping me create data-driven content around investment themes and my experiences as a VC.