Tim Draper with CoinHako founders Yusho Liu and Gerry Eng

Singapore Exchange CoinHako Gets Personal Investment Boost from Tim Draper

Jon Southurst
Dec 19, 2014 at 06:03 UTC
Updated Dec 19, 2014 at 13:12 UTC
Tim Draper with CoinHako founders Yusho Liu and Gerry Eng

Tim Draper with CoinHako founders Yusho Liu and Gerry Eng

Recently launched Singapore exchange and wallet service CoinHako has received a helping hand via a “six figure” personal investment from venture capitalist Tim Draper.

The company is also actively in talks with other angel investors and seed-stage VCs to close another round of funding.

Draper said that, while bitcoin is the greatest technological breakthrough since the Internet, liquidity and pricing remained a problem in Singapore and Southeast Asia.

“CoinHako is cleverly filling up those gaps. Singapore is also one of the most competitive places in the world to do business.”

Founders Yusho Liu and Gerry Eng have just returned home to Singapore, fresh from participating in ‘Tribe 4’ of Draper’s son Adam’s Boost VC accelerator program. Boost VC recently declared it would ‘go full bitcoin‘ for its next and fifth round, working only with companies in the digital currency space.

Addressing regional issues

CoinHako bills itself as “the simplest way to start using bitcoin in Singapore”, with a site available in English, Chinese and Japanese. Users may create a standalone wallet account or log in with Facebook, and the trading fee is 1.9%.

Liu told CoinDesk the company has plenty of feedback and data to show what regional problems needed solving as a priority.

He said:

“Liquidity is low in Southeast Asia. Order books are thin and pricing is unfavourable. Most end up going to ATMs and offline brokers and get charged exorbitant fees. With our technology, consumers are now able to purchase coins at the most competitive pricing, without even having to get out of their seats.”

CoinHako emphasizes simplicity, he added, describing the concept also as bitcoin’s biggest challenge.

Liu said the company is trying to pick up market share in Singapore to establish itself as a mainstay, focusing exclusively on the city-state’s market for the time being.

The team is, however, developing a platform to take on customers from the rest of the region “in the next couple of months”.

Current bitcoin situation in Singapore

Despite showing early promise as a regulatory and financially savvy haven for bitcoin startups, Singapore currently is not headquarters to any household-name international bitcoin company . It is, however, a popular jurisdiction in which to register other Asia-focused businesses. OKCoin and Quoine, and the regional office of itBit have all done so.

Liu said he still has confidence in the future, despite the challenges:

“The bitcoin ecosystem in Singapore is pretty robust. I think all of [the startups] are doing a great job managing their vertical. However, I’m afraid some verticals are pre-mature for the current market.”

Entrepreneurial pedigree

Liu says he is “a serial entrepreneur with a mechanical engineering background”. He and Eng met at Singapore’s Officer Cadet School about six years ago, during their period of compulsory military service.

Eng has also previously been lead engineer at two other startups.

The experience of immersing themselves in the heart of bitcoin action with Boost VC for three months, together with “50 other like-minded fanatics” was invaluable, he said, explaining:

“Not only did we get access to Boost’s unimaginable network, we also forged great friendships that will last a lifetime. Boost also provided excellent facilities, which was a huge plus point for international teams like us. We would totally do it again.”

Tim Draper and bitcoin

Draper, a well-known bitcoin proponent, is a founding partner at leading venture capital firms Draper Fisher Jurvetson FJ and Draper Associates. He was also previously a member of Singapore Economic Development Board’s International Advisory Council.

His past investments include Skype, Hotmail, Baidu and Twitch, as well as digital currency startups Vaurum (since rebranded Mirror), snapCard and CrowdCurity.

He garnered significant attention in the wider bitcoin sphere in July, when he placed the winning bid for the US Marshals Service’s auction of 29,656 BTC seized from the Silk Road dark marketplace.

He later won one 2,000 BTC block of a subsequent US Marshals bitcoin auction – this time of coins confiscated from accused Silk Road proprietor Ross Ulbricht.

Draper has said he would use all the coins acquired either to invest in further bitcoin startups, or to shore up his exchanges’ liquidity.

Image courtesy CoinHako