Coinbase. Ripple. Uphold? Greg Kidd Defends Bold Bet
FEATURE Michael del Castillo Feb 19, 2018 at 13:00 UTC | Updated Feb 20, 2018 at 03:16 UTC
"I don't know if we each have a destiny, or if we're all just floatin' around accidental-like on a breeze, but I, I think maybe it's both."
The well-known quote from the Academy Award-winning movie "Forrest Gump" seems to sum up tech investor Greg Kidd's life, and he even says as much himself.
Calling an investment opportunity his "Forrest Gump moment" – just being in the right place at the right time – Kidd has bumped into, and subsequently invested in, some huge successes in his day.
For instance, after founding a bicycle courier service aimed at helping financial institutions more efficiently deliver paper checks, the company was hacked by Jack Dorsey, co-founder of Twitter and Square, both of which Kidd then put money in.
And while working on an early Y-Combinator project that would have allowed people to spend any kind of value on a credit card, Kidd stumbled into Brian Armstrong, the co-founder of cryptocurrency exchange Coinbase, in which he also invested.
Then, most recently, while looking for an investment opportunity that would let him trade cryptocurrencies more efficiently, Kidd ran into Uphold, a crypto startup that, while under the radar of the media for a couple years, happened to be focused on just that.
"When I arrived [at Uphold's site], it was like I was immediately transported to Star Trek-land, because I saw there were dozens of currencies, including crypto and fiat, but also silver and gold," Kidd told CoinDesk.
With that, Kidd rather enthusiastically dumped $57 million into Uphold and joined the startup's board in an effort to help the company move forward with its mission.
Speaking to that pursuit, Kidd said:
"If you take a look at my investment portfolio … you'll see probably the top 20 or 30 portfolio companies of mine all stand to benefit or support Uphold in its effort."
In interview, Kidd detailed a number of projects in his portfolio that are in various stages of development that could benefit from work with Uphold.
The most advanced of these efforts appear to be a crypto credit card. Specifically, Kidd mentioned that Shift Payments might be able to let Uphold customers spend their holdings almost anywhere major credit cards are accepted.
"Imagine enabling Uphold to issue cards to all of its members, so any of those 40-plus currencies that they support could be spent anywhere that Visa or Mastercard is accepted," Kidd said.
Shift Payments has already launched similar cards with Coinbase and Dwolla, and last year revealed a project with PayPal-owned Venmo.
"That's just like an obvious slam dunk integration."
Although, for all Kidd's enthusiasm, vice-chairman of Uphold, JP Thieriot, took a more measured tone.
Thieriot clarified that while Uphold has plans to release a multi-purpose credit card later this year, it's still "exploring" opportunities and hadn't necessarily settled on Shift Payments as the provider of that product.
Still, Kidd mentioned other projects, including a partnership between Uphold and blockchain identity startup Global ID, of which Kidd is both founder and CEO. According to Kidd, Global ID could make it easier for companies using Uphold's APIs to verify user identities easier.
Plus, Kidd, who has invested in Ripple too, indicated that he'd like to see the addition of XRP, Ripple's native cryptocurrency, added to the Uphold platform.
Although, true to form, Thieriot downplayed this move a bit, stating that Uphold might add XRP, but that's a long ways from an official announcement.
Making it personal
But even with Thieriot softening Kidd's promotion, Kidd has staked a personal investment in the company which seems tailor-made to ensure his interests and the interests of Uphold align.
Of the total investment, 45 percent will come in the form of an exchange of Uphold equity for cash, 20 percent comes in the form of a licensing agreement and 35 percent comes from Kidd putting up a portion of his current portfolio balance sheet.
The latter part is perhaps the most interesting in that the exposure to the assets is designed to protect Uphold against any number of scenarios where the company might deal with a significant negative event, such as being hacked.
"I'm willing to pledge a certain amount of my balance sheet, or the balance sheet of my venture company – a lot of that is tied up in crypto – as a reserve," Kidd said.
Plus, Kidd has committed to collaborating on development.
Specifically, Thieriot said some of the funds will be used for the creation of a research and development lab to streamline new and existing projects.
"One of the immediate upshots of this collaboration is the formation of Uphold Labs, in which [Kidd] will be active," said Thieriot. "[Kidd] is aware of the existing pipeline of projects which is pretty deep and interesting, and he'll have at least bi-weekly involvement in moving that forward."
In the black
Perhaps one of the main reasons Kidd is so gung-ho about Uphold is the fact that the company is already making money.
Originally founded in 2014 as BitReserve, last year the company became profitable for the first time, according to Thieriot, six months ahead of schedule. While the company has kept a low profile, it's business seems to have grown substantially.
According to Uphold's site, the company has transacted $2.8 billion in volume from six million transactions.
Coupled with its profitability, Uphold's business transparency also drove Kidd's final decision to not only invest, but put so much skin in the game.
For instance, far exceeding the 10 percent of liabilities required to be held by all large financial institutions by the Federal Reserve, Uphold shows a reserve status of 101.7 percent of its liabilities, or $164 million. The reserve funds include multiple tiers of assets, including $30 million in U.S. dollars, $1.8 million in gold and $50 million in bitcoin.
"They're prepared to scale, they're doing it in a compliant way, and they're doing it in the U.S.," said Kidd, adding:
"Over the past year, they went from growing very quickly to not making any money to basically being pretty much in the black every day, and quite in the black everyday."
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase and Ripple.
Greg Kidd image via Creative Commons
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.