By Aaron Hurst - 21 April 2023
The third iteration of the web is seeing a surge in innovation across multiple sectors and markets, utilising technologies such as AI, blockchain, immersive reality and decentralised data science to solve new and evolving business needs. Valued at $1.73bn in 2022, the global Web3 blockchain market is projected to reach revenue of $33.53bn by 2030.
In the UK, areas of the $1tn national tech sector have been shifting towards Web3 innovation in recent years, with business customers increasingly looking to decentralise data assets and improve security, as well as bolstering interoperability across apps and platforms.
In this article, we explore four UK start-ups making waves in the Web3 space, and they plan to continue innovating going forward.
CV Wallet is a platform looking to provide businesses and job applicants with a more transparent way to engage in the hiring process. Established in 2022, founders Richard and Beverly Collins saw an opportunity to overhaul the 400-year old Curriculum Vitae paradigm using Web3 capabilities. User data is stored in a personal wallet, and recruiters can hire based on skills rather than relying on a network – allowing for the opportunity to create a more diverse and inclusive pipeline.
“We talk a lot about how we can use assessments within the hiring process, and using assessments as a way of understanding skills is a fundamental part of why we built CV Wallet,” said co-founder Richard Collins.
“Recruiting is very challenging given those skill shortages, but if you can apply assessments to do the hiring, you can then recruit for the skills rather than the people. When you achieve that, you take away all the bias and unfairness from the process.”
To further bolster the recruitment process, the start-up recently integrated ChatGPT to aid CV writing and make assessments fairer. Using this integration, job applicants can infuse their CVs with AI-assisted content within the recruitment tool, while keeping personal date protected. Bringing generative AI capabilities together with Web3 technologies like blockchain aims to boost ownership of data in favour of users.
Collins added: “Looking at the money being invested in ChatGPT, what we want to do is use that kind of tool to level the playing field when it comes to CV writing. But you have the problem of hallucinations to consider – people often don’t tell the entire truth at the best of times, and AI is likely to make this an exponentially bigger problem. This is where blockchain comes along.
“We have this idea of Web3 being the Wild West, with blockchain as the sheriff and AI being the gunslinger. You need one to balance the other, because without it, recruiters won’t believe the information on the CV.”
Element is a Web3-powered social media platform, founded in 2017 to run on the decentralised open source ecosystem Matrix. The app, previously known as New Vector, looks to meet a demand for encrypted communication data under full control of the user, with data sovereignty in mind. The open source nature of Element allows for custom security functionality in line with bespoke business needs and integrations with third party apps like Teams and Slack, as well as preventing lock-in to a particular vendor.
Uptake of Element, and more generally the Matrix ecosystem, has now been seen in the public sector, defence, utilities and education industries across Europe, owing to a level of encryption not currently offered by other communication platforms such as Teams and Slack.
Looking back on the creation of Matrix in 2014, and the developments that would follow, Matrix and Element co-founder Matthew Hodgson said: “In 2015, we proposed that the balance of power could shift from the centralised service providers of Web 2.0 to the democratised and decentralised world of Web3 – but it had nothing to do with cryptocurrencies or what would become NFTs.
“Instead, it was this idea that this power can shift from the super-centralised tech giants to an almost edge computing-like concept. Users could ideally run servers on their own terms, and this would eventually become peer-to-peer. This was always the vision for Matrix.”
Going forward, a development named ‘Element X’ – a rewrite of mobile apps involving a shift to “best in class” interfaces – aims to deliver a sped-up launch time predicted to be from 10 seconds to around 100 milliseconds, while time spent logging in is set to be cut from tens of minutes to seconds, according to Hodgson.
Additionally, the Matrix team are looking to establish a chatroom aspect underpinned by Element called Third Room, which incorporates metaverse-like digital twin virtual spaces, delivering bespoke real-world data sets such as flight information.
Iov42 is a digital identity platform underpinned by blockchain, that looks to strengthen the ability to support business value and meet regulatory requirements. Established in 2016, the founding team discovered a general lack of understanding in the business world around blockchain and the value it could bring, and sought to increase transparency.
“The challenge at the time, was that standard blockchain applications weren’t built in a way that business could understand, and in business, it’s fundamental that we know what and who we’re dealing with,” explained Iov42’s chairman and CEO, Dominic von Trotha Taylor.
When the EU and UK were undertaking regulation for the timber industry, Iov42 saw an opportunity to raise this awareness, and to offer blockchain digital identity that can increase supply chain transparency. The start-up’s Timber Chain offers full transparency of processes across the supply chain, helping customers in the forestry space overcome technical complexity and achieve full compliance with changing regulations.
Taylor continued: “There is a requirement to know the provenance of commodities coming through the supply chain, so that participants in that supply chain – and ultimately the consumer – are clear about what they’re buying.”
For the leadership team, the key to long-term innovation is the creation of a generic application that can be deployed across multiple sectors, and deliver the same amount of transparency. According to Taylor, the steel and meat production industries are further frontiers on the company’s radar going forward.
Over the last decade, the derivatives industry has been subject to significant regulatory reform and oversight. However, much of the traditional infrastructure and technology underpinning these products requires modernisation. Many siloes exist, mainly due to numerous and separate databases, at every stage of the lifecycle, and the industry is fraught with reconciliations, rekeying and legacy technology debt. This is not a welcoming environment to launch new financial risk management products such as voluntary carbon credits (VCCs) for Carbon Emission trading.
Tokenovate, a start-up rooted in distributed ledger technology (DLT) and financial trading, was founded in 2022 with the aim to address these challenges with its lifecycle event management platform. Programmable software controlling events and responses is combined with DLT to unify and automate operations.
Founder and CEO Richard Baker explained: “At Tokenovate, we want to support and accelerate the upgrading of financial market infrastructure through our software platform. By introducing highly standardised smart contracts, we can programmatically de-risk trading and increase operational efficiency”.
Baker continued: “In the lifecycle of a trade, there are often hundreds of events spread over many years that must be adhered to by the parties involved. By automating workflows using smart contracts on the blockchain, we can ensure immutability and transparency of these trade events, all while honouring counterparties’ privacy”.
Applied to, for example, VCCs, Tokenovate’s software platform can help to address the issues around “greenwashing” and ensure the focus is on reducing our shared carbon footprint – going beyond merely shifting responsibilities.
With the Web3 space becoming increasingly competitive and crowded, start-ups can’t afford to become complacent.
Having overseen multiple successful start-up exits in the past, Collins advises entrepreneurs: “Whilst it might seem like a big risk, if you know your market and are focused on the audience you’re trying to solve, it won’t be as big as you perceive.
“When you consider the tech layoffs that have been happening, people often think that joining a big term firm brings a low level of risk, but the reality is that you lose control over your own destiny.
“However when you’re building something that answers a problem you’re focused on, then you will be invariably rewarded for that. Founding a start-up is such a great feeling, and you can create jobs that didn’t exist before, while solving problems that didn’t exist before.”
Drawing from his years of experience growing businesses, Taylor added: “It’s all about staying focused on the opportunity. This is a common challenge for young businesses, but you need to make sure that your application is broad and relevant enough to cater for a wide range of products.”