Your weekly M&A information bank, providing you with all the latest movements, market landscape and breaking news within the sector.
A vast amount of hype and ‘white noise’ surrounds the realm of cryptocurrencies, NFT’s and Blockchain platforms. Often being explained in extreme detail and using mystical terms, these spaces are severely misunderstood, confusing and daunting to try and grasp. However, smart contracts are one of the most exciting emerging opportunities within this traditionally
What is a smart contract?
Smart contracts run on the blockchain platform, whereby the entire transaction is automated digitally. In essence, it verifies, controls and executes an entire agreement automatically, without the need for a third party.
Rules and penalties relating to the agreement are written as code on the blockchain platform, whereafter the agreement will run completely automatically, enforcing its coded obligations.
Advantages of Smart Contracts:
Savings: third parties are eliminated
Speed: a completely automated process significantly reduces time wastage
Safety: cryptography ensures the safety of valuable information
Storage & Backup: multiple copies are stored on the blockchain platform
Accuracy: errors are eliminated due to the minimal manual input
Code is difficult to change
Inability of the system to handle vague terms
Difficult to ensure that agreement terms are met ethically
Where will we see the use of smart contracts?
Financial services - particularly insurance claims and accounting practices
Government voting systems
Supply chain logistics
Health care systems
We could eventually see the majority of an M&A transaction take place using smart contracting platforms. However, this would take a large amount of complex code, which would be difficult to generalise, as each transaction differs fundamentally.
Already eliminating the direct need for middlemen, besides for their need to include the correct terms within the smart contract, the future of doing business involving traditional contracts is sure to be disrupted within the near future.
Clickatell has secured $91m in their recent Series C round.
MarketForce secures $40m in Series A funding.
Zindi, a South African startup recently secures a $1m seed investment.
Flutterwave, a Fintech Startup secures $250m in Series D funding. It has now become the highest valued startup in Africa.