A cryptocurrency boost for Revix
It has received a cash injection from Sabvest, which will boost its world domination plans.
Sean Sanders, the co-founder of digital asset management platform Revix, is on a mission to educate the public about the murky world of cryptocurrencies.
When cryptocurrencies first took the world by storm in 2009, they became known to the public because of their involvement with human trafficking and the drug trade. There was a belief that cryptocurrencies can be used to conduct trades without surveillance from the government and market regulators.
The occasional crash in the value of cryptocurrencies, including the well-known Bitcoin and Ethereum, has also heightened negativity towards the digital currency.
However, Sean said there is more to cryptocurrencies than the controversies they normally court.
“A lot of people don’t know that there are thousands of cryptocurrencies available and in different sectors. Typically, investors tend to be over-concentrated in Bitcoin, which is only one part of the growth story,” he told Mergers and Acquisitions Africa.
Sean’s wants to educate the public about cryptocurrencies and advocating for their treatment as a legitimate asset class. “This will build more trust in the market of cryptocurrencies.”
His ambition got a shot in the arm last week with the decision by Sabvest, a JSE-listed investment group, to acquire a 30 percent stake in Revix, which is domiciled in the UK. Sabvest has invested more than £530 000 (about R10 million) in Revix but the exact investment amount is difficult to determine because it was made through multiple currencies, said Sean.
Co-founded by Cape Town-based Sean (pictured right) and Louis Buys (pictured left) in 2018, Revix uses smart portfolio management technology to make it safe and simple to invest in a diversified basket of cryptocurrencies.
How Revix started
Although Revix is a start-up, both Sean and Louis, who are both below 30-years-old, are not newbies in the world of entrepreneurship, technology and investing.
They met at the University of Cape Town’s student residence called Kopano. Sean was studying business science while Louis was pursuing a computer science degree. “I was a jock on the academic side, and he was a massive mathematics nerd. We hit it off. I said at the time that if I was ever going into business, he’d be the person I would want to work with because he is smart,” said Sean about Louis.
After graduating, they went their separate ways to build their careers.
Louis launched successful technology businesses including a payments platform and a web development company – just to name a few. Sean also started a trading firm that focused on a wide variety of investments from traditional stocks, bonds, and debt instruments to more alternative assets such as cryptocurrencies, non-commodity-based derivatives and even collector sneakers and wines. He also experiences working for capital providers including Sabvest and Knife Capital.
“I helped a lot of businesses with getting capital at Knife Capital and that’s when the start-up bug bit me.”
Sean decided to meet up with Louis to discuss the idea of creating an investment company that is targeted at ordinary people wanting to invest in cryptocurrencies in a safe manner. They agreed to form Revix, which is short for “revolutionary index.”
Revix has a platform that gives investors exposure to over 80 percent of the cryptocurrency market through various investable portfolios. The minimum investment on its platform is R500. Just like exchange-traded funds (ETF) give investors exposure to a basket of assets such as stocks, commodities or bonds that tracks an underlying index, Revix’s offerings can be considered as cryptocurrency ETFs.
The company offers investors four investable cryptocurrency portfolios or bundles, which are:
• The Top 10 Bundle: a diversified and equally-weighted bundle of the ten most prominent cryptocurrencies.
• Payment Bundle: a bundle of the five largest payment-focused cryptocurrencies.
• Platform Bundle: a bundle of the five largest platform cryptocurrencies that have been developed to improve inefficient systems, processes and governance structures that exist.
• Privacy Bundle: a bundle of the top three privacy-focussed cryptocurrencies. These blockchain technologies protect an investor’s right to privacy online.
Sean said having a basket of cryptocurrencies reduces the risk of losing money as investors would be betting on several cryptocurrencies instead of “laying your eggs in one Bitcoin.”
Unlike traditional ETFs or investment funds, which have dedicated portfolio managers that make investment decisions and are paid fees for this function, Revix has a unique approach.
“We say that [role of a manager] is a bit strange because this role can be automated. Technology has a place for what they are doing. Technology can do their role more efficiently and at a lower price,” said Sean.
“We have taken an innovative approach of direct indexing, which allows customers to directly hold the underlying asset [cryptocurrencies]. When something happens to the underlying coin, there is no watered-down return or fees that get lost in trading. The return is directly correlated with the underlying asset.”
On fees, Revix charges a monthly rebalancing fee of 0.17 percent, which equates to about 2.04 percent annually. Consumers incur a transaction fee of 1 percent on the total value transacted – whether buying or selling a bundle. To withdraw funds, consumers incur a nominal fee of R30 and for amounts over R200 000, there is a 0.05 percent fee.
Sabvest investment and Revix ambitions
The investment by Sabvest is arguably a vote of confidence in Revix and cryptocurrencies. For Sabvest, the Revix investment is another a step away from its traditional investment focus on the industrials sector. But the company already has investments in technology-led companies including US Nasdaq and JSE-listed Net1 UEPS and US-based Corero Network Security.
Chris Seabrooke, the Sabvest CEO, believes that the digital asset ecosystem has significant growth potential in an increasingly digitised world. “For most investors, if you're looking to gain exposure to any asset class, it makes sense to hold a diversified basket of assets within that class. Revix is applying this same principle to a nascent and dynamic industry,” said Chris.
The investment by Sabvest will help build scale into Revix’s operations.
With Revix’s cryptocurrency trading platform now live, Sean has ambitions of taking the company globally. The company plans to establish a presence in the UK, which Sean described as a “big investable market” in which Revix can easily gain traction.
“The UK also has wealthy consumers. For us to get the investment we require and introducing a mobile app, we require quite a big market. As much as we want to expand in Africa and penetrate South Africa, we have to target a developed economy first like the UK.”
This is why Revix is domiciled in the UK and not South Africa.
Germany, Spain, New Zealand, Australia, and southeast Asia are also on Revix’s radar for expansion. “Our plan is to become the best-diversified investor in cryptocurrencies globally within the next 12 months.”