The total value of all cryptocurrencies is estimated to have plummeted by some $2TN from their November 2021 peak, but that certainly doesn’t mean that the next wave of exceptional companies in the wider crypto and blockchain space aren’t being forged today, in the shadow of the crash.
TransCrypts – a blockchain-powered corporate data verification platform – graduated from the inaugural 2022 Filecoin Techstars Accelerator class in Seattle in mid-June. Within days CEO and cofounder Zain Zaidi, cofounder and CTO Ali Zaheer, and their team had closed a pre-seed round of $1.4M from investors including Mark Cuban, Protocol Labs, Underdog Labs, Global Millennial Capital, and Jenny Fielding’s The Fund, alongside a number of angels. TransCrypts is tackling the cumbersome process employers have to go through when checking the credentials of potential hires, explains Zain, a first-time entrepreneur. “We view the background check as an outdated mechanism of the 20th century. They are inefficient, take a long time, and cost a lot of money. And more often than not, they’re inaccurate. Wouldn’t it be so much better if I, as an individual, could verify who I am in a way that other people could trust? And that's exactly what we're doing with TransCrypts. We're leveraging the blockchain to act as a trusted intermediary between me, and whoever wants to verify my information.
“It’s now possible on the TransCrypts platform for me to share an employment verification document directly with a bank or a future employer. And that future employer or bank has zero suspicion that I altered this information, because it can’t be altered because it's stored on-chain.”
“Investors are no longer feeling FOMO”
While TransCrypts fundraise was certainly speedy – the team kicked off the process in the first week of April – according to Zain it is now taking noticeably longer for investors to cut checks. “We saw how things just went off the side of a cliff [as the downturn began]. In the first couple of weeks, we were getting checks in with just a week's worth of due diligence. Now [investors] want three, four or five weeks to write even a $100,000 check. So we've seen that completely change over a couple of months. Investors are no longer feeling that FOMO, if you will, of trying to rush into an investment.”
Yet capital is still finding its way to good companies. Startups, like TransCrypts, that are addressing real world problems for businesses and consumers, are getting a lot more attention, at the expense of “frothier, more speculative” ideas, he continues.
“When we started building TransCrypts a year ago, a lot of people thought our idea wasn't cool for a Web3 company. People were much more interested in companies that had a token, or who had an NFT project or something like that. While what we’re doing at TransCrypt was probably not immediately as interesting as a Bored Ape or a new crypto drop, we're definitely starting to see that flip where a lot of people are now saying, ‘What you're doing is pretty cool’.”
Today TransCrypts already has over 100 enterprise users, ranging from companies with under 100 employees to household names with upwards of 35,000 employees. (Zain can’t name individual clients, but they include very well known digital businesses, retailers and even an airline.) During their time on the Filecoin Techstars Accelerator, the team developed a new feature which allows them to verify the information of employees at 98% of Fortune 1000 companies. “We’ll be able to verify that an individual works there, what they’re doing and how much they’re making,” says Zain. “It’ll be the first solution of its kind on-chain. So we’re really becoming an Equifax or Experian on-chain.”
Zain began work on TransCrypts during his senior year at San Jose State University, where he was studying Electrical and Electronics Engineering. “This isn’t just my first company, but my first real job,” he says. “I always knew I wanted to create a company from a very young age – since I was six or seven years old. I've always been interested in entrepreneurship. I grew up in Silicon Valley, so I always had my mind on that. And when I found the right idea, with my co-founder Ali, we decided to hop on it. That idea has changed and taken many different forms, but the general, underlying philosophy has always been the same. And thankfully, we've kind of figured out something the market wants, and we’re building towards that now.”
Take a deeper look at what TransCrypts is building.