More money than cents

Callaghan Innovation, the government’s cash machine, has given an Internet Bitcoin startup company $315,000. Quote.

Callaghan Innovation’s decision to fund a starry-eyed Bitcoin startup drew brutal criticism from tech professionals.

Yesterday, the Herald reported the Crown agency had provided $315,000 funding for loss-making Auckland crypto-currency startup Vimba, which wants to expand its bitcoin exchange and push into the UK.

While many have given up on bitcoin since its value against the greenback crashed from close to US$20,000 to under US$6000 in the new year, Vimba founder Sam Blackmore sees the digital currency surging 60-fold to US$600,000.

Kordia chief digital officer Aaron Olphert was less than impressed with where Callaghan is putting taxpayers’ money, posting to LinkedIn, “Please explain to me what benefit NZ gets out of chucking cash at yet another Bitcoin startup.”

He added, “It doesn’t even seem like they have much of a NZ presence [Vimba has six fulltime equivalent staff, one currently in the UK] and so we don’t even get the benefit of jobs for local talent and also tax generation.”

Spark executive Andrew Leckie weighed in, “Please explain to me what benefit NZ gets out of chucking cash at yet another Bitcoin startup.”

Katana Technologies strategic relationships director Steve Rielly weighed in, “I’d say the only benefit is to showcase to other local businesses that you can take any idea to Callaghan, no matter how zany, and the odds are they’ll write you a cheque.”

John Gell, business development manager at superyacht technology exporter McKay said, “[It] totally blows my mind. We have real and hard data which shows the direct and tangible benefit that is achieved through communications enhancement, closing the digital divide which is so prevalent and yet they throw cash at these sorts of things like it’s Monopoly money!.”

Olphert responded, “Agree. It suggests they have money they need to get rid of and it is a lazy call to make as they can put in a report ‘we invested in bitcoin and it’s cool’.”

On Twitter, commentator Russell Brown posted, “Pretty sure the local blockchain community will be cringing as hard as anyone,” while Andrew Chen wondered if the story was a hoax. End of quote.

It is fair to say that the business people above are not best pleased.

I searched for Vimba online and they are not mentioned in the first 4 pages of a Google search, which is odd for a whizz-bang Internet company about to expand to the UK and worthy of government money.

So I dug deeper and found that the Sam Blackmore was also the founder of MyBitcoinSaver which seems to have a strikingly similar business model to Vimba.

A year ago MyBitcoinSaver raised $400,000 to launch into the UK.  A year later Vimba have asked for $315,000 to launch into the UK.  Curious.

So I searched for “crypto nz” in the hope that may find Vimba, a worthy recipient of government largesse.

 

Nope, not there either.  Apparently they met the “criteria” (just like the young couple with a new Kiwibuild house), but is the government backing a winner?

Has someone who does not understand the sector been “sold a line”?


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WH is a pale, stale, male who does not believe all the doom and gloom climate nonsense so enjoys generating CO2 that the plants need to grow by driving his MG.

To read my previous articles click on my name in blue.

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