At the intersection of technology, impact, and growth sits Blockmate Ventures Inc (TSX-V:MATE, OTCQB:MATEF): a venture builder focused on building businesses related to cutting-edge sectors such as blockchain, energy storage, and climate.
The company’s team works with founders on their projects in these cutting-edge sectors to bring their technology towards monetization.
“The essence of Blockmate Ventures is that we are focused on fast-growing companies within fast-growing markets that have a positive impact,” CEO Justin Rosenberg told Proactive.
“We build these projects from scratch. You usually get better leverage if you make rather than buy.”
Blockmate Ventures is currently pursuing opportunities in the Decentralized Physical Infrastructure Networks (DePIN) sector made possible by blockchain technology through its subsidiary Hivello.
DePIN refers to networks that connect physical hardware devices. They offer cryptocurrency tokens to individuals in exchange for access to their resources such as storage, cloud computing, and energy which are used to build, maintain, and operate this infrastructure.
Rosenberg notes that DePIN, a relatively new concept, was popularized by the rollout of Helium: a blockchain-based, decentralized wireless network that rewards users who deploy wireless hardware on its behalf with its token HNT.
“That woke up the world to the potential of decentralized infrastructure,” Rosenberg said.
The DePIN market, currently valued at more than $2 trillion, is projected to reach $3.5 trillion within four years, according to Messari data.
“(DePIN is) at that intersection of technology, impact, and high growth: that’s our DNA. That’s what we’ve been doing at Blockmate Ventures and before for more than 20 years,” Rosenberg said.
Bringing DePIN to the mass market with Hivello
Through its subsidiary Hivello, Blockmate’s goal is to make DePIN accessible to individuals without needing them to have knowledge of the technology, democratizing access to decentralized infrastructure.
“Hivello is dedicated to transforming the accessibility of decentralized services globally as a leader in the decentralized physical infrastructure network sector,” Rosenberg said.
Hivello aggregates multiple DePIN nodes into a single Web 2.0 console. Users earn tokens from the DePIN protocols being run on their device with Hivello taking a 30% mining platform fee. “The app store of DePIN mining,” Rosenberg called the idea.
It can be used by anyone with a Windows or Mac laptop or desktop and is compatible with older hardware. Linux and Raspberry Pi versions are also in the works.
“As simple as installing an app, users earn passive income by contributing their computer’s resources such as its central processing unit, graphics processing unit, bandwidth, and storage to earn tokens,” Rosenberg explained to Proactive.
“We’ve designed a product that is as frictionless as Facebook or the App Store. The idea is that anyone can just download it and start earning within minutes.”
Hivello in its current form builds on an earlier version of the technology, Hivello 1.0, Rosenberg explained. Hivello 1.0 deployed Helium hotspots to users and split the mining revenue.
“When the Helium price crashed with FTX and so on, we relooked at the space and turned the DePIN model on its head. Instead of deploying devices, we decided to leverage hardware users already have,” the CEO said.
“Hivello 2.0 was born and now is an incredibly exciting venture, validated by the leading funds that just came in.”
DePIN: the next wave of opportunity in Web3
Hivello was co-founded by Andrew Smith and Domenic Carosa, Blockmate Ventures chairman and founder of BANXA Holdings Inc (TSX-V:BNXA, OTCQX:BNXAF), a Fiat to crypto on-ramp that has converted over $2 billion.
“Our deep roots in the blockchain payment sector through BANXA give us the unique ability to understand and innovate in the DePIN space,” Rosenberg told Proactive.
Carosa told investors in a recent briefing that DePIN is the next wave of opportunity in the Web3 space, a technology that calls back to the core, decentralized nature of the Internet.
He highlighted that what makes Hivello unique is that, over time, it will use artificial intelligence to personalize the DePINs on users’ machines to maximize the return on investment (ROI).
“That’s a really important part of Hivello’s value proposition because different DePINs will fall in and out of favor and there will be different rewards provided across different DePINs in different countries,” Carosa said. “This ability to personalize in our view is really important.”
While Blockmate Ventures has not published any specific user or revenue projections for Hivello, Carosa said he expects that within three to four years it will have millions of users generating 10s of millions of dollars with a high earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 40% to 50%, as is typical for software firms.
Rosenberg added: “Our vision is that people from all around the world download this product and at a 30% mining platform fee and expectation of $20 per user per month, that gives you a sense of our internal expectations.”
Attracting investor attention as crypto spring blooms
Blockmate Ventures expects to soft launch Hivello through its B2B partners within 60 days supported by its recent successful financing rounds totaling $2.5 million.
In December, the company raised an initial $1 million and upsized this offering by another $0.5 million at a $5 million valuation. Due to significant investor interest, the company raised another $1 million at a $9 million valuation, representing an 80% premium from the earlier round. The pre-seed raises were led by Blockchain Founders Fund, Blockchange Ventures and NGC Ventures.
Rosenberg noted that the recent fundraising rounds reduced Blockmate Ventures’ interest in Hivello from 100% down to 67%.
“That $2.5 million goes towards building the product and integrating potentially 100 or more DePIN protocols into it for our algorithms to choose the best ROI on any given day for our users,” he said.
Rosenberg said that Blockmate Ventures can feel a significant change in the cryptocurrency market and level of interest in these digital assets as reflected by the 80% up round.
“Next, it will mean that the tokens that we’re going to be mining will be higher in value because their prices will go up and also because these DePIN protocols themselves will be better funded as the crypto spring gets warmer,” he said.
“As they’re better funded, they’re able to remunerate distributors like us by offering more mining rewards. Those are the two immediate positives for Hivello.”
Innovation in energy storage and climate
In addition to Hivello, Blockmate Ventures is pursuing opportunities in the energy and battery storage markets.
Rosenberg highlighted that the market for its target area within energy storage, lithium iron phosphate batteries, is expected to grow to $35 billion by 2028 at a compound annual growth rate of 15% per year, according to MarketsAndMarkets.
“The energy sector is a little bit different, not being software, but it’s still at the intersection of technology, high impact, and fast-growing,” he said.
The company expects to make a significant announcement soon about its energy storage efforts. “We expect to update the market with our progress in this sector within the next month,” Rosenberg said.
Upcoming catalysts
The B2B launch of Hivello within the next 60 days will be followed by a B2C launch of the platform and then by the eventual launch of a Hivello token, Rosenberg told Proactive.
“Once the product launches then it’s going to be a rapid and constant process of onboarding users,” he said. “We will report to the market regularly in terms of downloads and mining success.”
Blockmate Ventures’ goal is to create value for shareholders by growing on the TSX Venture Exchange and then uplisting to the Nasdaq, the CEO said.
“We are commercial and could achieve those goals with these two massive markets that are established in Web3 with Hivello and in sustainable energy technology,” Rosenberg said.
“However, we’re constantly approached by private companies wanting to partner to get public exposure and we will run all of these opportunities through our process to maximize value for Blockmate Ventures shareholders.”