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Coverage | Newsletter | Intel | Events
Coverage | Newsletter | Intel
January 25, 2021
The second earnings season of 2021 is here. After a tumultuous 2020, and driven by the pandemic, Big Tech saw the most gains in the last quarter — the most of any sector. Can it keep it up?
To find out when each company reports, explore the interactive calendar above, or check the list below.
| Ericsson | 4/21 |
| IBM | 4/19 |
| Netflix | 4/20 |
| ASML | 4/21 |
| Verizon | 4/21 |
| Intel | 4/22 |
| SAP | 4/22 |
| Snap | 4/22 |
| AT&T | 4/22 |
| Philips | 4/26 |
| AMD | 4/26 |
| Tesla | 4/26 |
| Microsoft | 4/27 |
| Texas Instruments | 4/27 |
| Alphabet | 4/27 |
| Visa | 4/27 |
| 4/28 | |
| ServiceNow | 4/28 |
| eBay | 4/28 |
| Apple | 4/28 |
| Qualcomm | 4/28 |
| Sony | 4/28 |
| Comcast | 4/29 |
| Amazon | 4/29 |
| 4/29 | |
| Lyft | 5/4 |
| MasterCard | 5/5 |
| PayPal | 5/5 |
| Uber |
5/5 |
| Twilio | 5/5 |
| Square | 5/6 |
| Cisco | 5/19 |
From Your Site Articles
Shakeel Hashim
andShakeel Hashim ( @shakeelhashim) is a growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.
Penelope Blackwell
Penelope Blackwell is a reporting fellow at Protocol covering edtech. She reports on the developments in tech that are shaping the future of learning. Previously, she interned at The Baltimore Sun covering emerging news and produced content for Carnegie-Knight's News21 documenting hate and bias incidents in the U.S. She is also a recent graduate of Columbia University's Graduate School of Journalism and Morgan State University.
Protocol | Workplace
Silicon Valley has a new recruitment strategy: The four-day workweek
Everything you need to know about how tech companies are beta testing the 32-hour week.
Since the onset of COVID-19, more companies have begun to explore shortened workweeks.
Photo: Matteo Colombo/Getty Images
August 5, 2021
Sarah Roach is a reporter and producer at Protocol (@sarahroach_) where she contributes to Source Code, Protocol's daily newsletter. She is a recent graduate of George Washington University, where she studied journalism and mass communication and criminal justice. She previously worked for two years as editor in chief of her school's independent newspaper, The GW Hatchet.
August 5, 2021
At software company Wildbit, most employees are logged off on Fridays. That's not going to change anytime soon.
To Natalie Nagele, the company's co-founder and CEO, a full five days of work doesn't necessarily mean the company will get more stuff done. She pointed to computer science professor Cal Newport's book, "Deep Work," which explains how a person's ability to complete meaningful work cuts off after just about four hours. That book, Nagele told Protocol, inspired the company to move to a four-day workweek back in 2017.
"We kind of jokingly and curiously said, 'Four hours a day times five days a week is 20 hours a week — what are we all doing for 40 hours a week?'" she said. "And that just spurred an experiment to say, 'Could we work less if we applied some of the philosophies from this book?'"
Since the onset of COVID-19, companies have begun exploring ways to make work more flexible, from implementing asynchronous work to extending remote work plans. But a handful of companies went a step further by introducing four-day workweeks, which they said boosts productivity and makes them more attractive than the next employer.
The policy has worked for Wildbit for years, but it's not a one-size-fits-all. Companies that have rolled out similar models have all taken different approaches, some of which never panned out.
Here's a rundown of what a four-day workweek looks like, who wants one, who doesn't and why companies are making the change in the first place.
What does a four-day workweek look like?
A shortened workweek looks different for each company, but the companies that have implemented the policy all have one goal in mind: get more work done in less time.
At Wildbit, Nagele said the customer success team needs to be available five days per week. To ensure the team still gets the same four-day weeks, she said some members of the division work on Fridays and take Mondays off, while the other handful of employees work on Mondays and take Fridays off. Employees across the company don't get a salary cut, she said.
Ecommerce company Shopify rolled out 32-hour weeks during July and August. During those months, Fridays are designated to "rest and refuel," Shopify communications lead Rebecca Feigelsohn told Protocol. She said the company hasn't decided whether it will continue the policy in the coming years.
Kickstarter, on the other hand, is still in the planning stages of a shortened workweek, which it plans to test by mid-2022. Kate Bernyk, the company's communications director, said Kickstarter will test out different schedules depending on the needs of each department.
Who wants a four-day workweek?
Essentially anyone who thinks their business can get the same — if not more — stuff done in less time is game for a shorter workweek.
Companies have run pilots of the work model over the years, but the realization that workers can do more in less time really took off in 2020. At least a dozen companies, including software application company Buffer and marketing platform AWIN, implemented shortened workweeks. In the U.K., more than 1 million companies have thought about logging off earlier in the week since the pandemic began, and thousands more have implemented some version of the policy.
"The majority of workers moving to work remotely overnight were steps we couldn't imagine before the pandemic. People have seen that you can carry on like that, and it's going to be quite stark for people to go back to the office," Joe Ryle, a campaign officer at 4 Day Week, told Protocol. "People are now realizing that's not the way you should be living our lives."
Ryle said there isn't one particular industry moving toward this model — businesses focused on everything from engineering to marketing have begun rethinking their workweeks. For companies that need to make themselves available all the time, like the hospitality and restaurant business, the implementation is a bit more difficult, but he's seen them roll out variations of a shorter workweek.
A handful of countries and government officials have considered the policy as well, including, Spain, Iceland, Ireland and Germany. In California, Rep. Mark Takano introduced a bill last week that would trim the standard workweek from 40 to 32 hours.
Who doesn't want a four-day workweek?
The thing is, almost no one is outwardly against a four-day workweek. But some companies haven't been able to make it work financially.
Wildbit and Kickstarter, and other U.S. companies that have introduced such a policy, are all relatively small; not fast-growing startups pressed by financial goals. Nagele, the CEO at Wildbit, said large companies aren't reaching out to her about the policy as much as smaller ones, which could be because large companies are moving too quickly to sit back and rethink their work day.
"Other companies are setting these goals for you, and in a lot of cases you have venture capitalists or whatever — the big folks that are really demanding this growth and acceleration," she said. "There's not a lot of time to pause and decide how we define work? How do we define enough?"
Gig workers could also become an outlier in a four-day workweek. In the legislation proposed by Takano, the California representative, gig workers wouldn't be included in the work protections, which could create a big pay inequity in the contractor business.
In other cases, shorter workweeks aren't always financially feasible. In 2017, workers in Sweden tested shorter workdays, which improved happiness among employees, but ended up costing too much money. An Amazon unit also tried it out, but the employees working fewer hours got a pay cut. Microsoft Japan ran a pilot in the summer of 2019 and saw a big boost in productivity, but it never continued the policy. Microsoft didn't return a request to comment.
What's the point in working fewer hours?
The bottom line is that a shorter workweek makes a company more competitive and makes workers happier, said Bernyk, Kickstarter's communications lead. And during a time when there's intense competition for tech talent, companies will bend over backwards to win their employees over.
"As we build a future that's more flexible, testing a four-day workweek is a continuation of that work," Bernyk told Protocol.
She added that the shortened workweek is one way to ensure employees are taking a proper break. A few years ago, Kickstarter gave its employees unlimited paid time off, but no one was actually taking a break. Cutting back weekly hours, and implementing a set number of paid time off, carves in a break for everyone at the company, she said.
For Wildbit, which had cut back weekly hours long before the pandemic, Nagele said a four-day workweek is one step closer to completely redefining work hours. It may be a pipe dream right now, but she said she eventually wants employees to figure out when to say "enough" and log out for the day or weekend, regardless of how much time they had spent working in one day.
"Can we say, 'We need to finish this one project and if we can get it done in two months, great. If it takes a month and a half, then fantastic,'" she said.
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Sarah Roach is a reporter and producer at Protocol (@sarahroach_) where she contributes to Source Code, Protocol's daily newsletter. She is a recent graduate of George Washington University, where she studied journalism and mass communication and criminal justice. She previously worked for two years as editor in chief of her school's independent newspaper, The GW Hatchet.
August 5, 2021
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
July 15, 2021
When the COVID-19 crisis crippled societies last year, the collective worldwide race for a cure among medical researchers put a spotlight on the immense power of big data analysis and how sharing among disparate agencies can save lives.
The critical need to exchange information among hundreds of international agencies or departments can be tough to pull off, especially if it's medical, financial or cybersecurity information that is highly protected by regulatory guardrails.
In addition, government agencies and their valuable databases are often in the crosshairs of hackers bent on acts of cyber warfare. The U.S. Department of Homeland Security identifies 16 "critical infrastructure sectors," such as transportation and drinking water, that are vital to the nation. These are areas whose assets, systems and networks, whether physical or virtual, are considered so essential "that their incapacitation or destruction would have a debilitating effect on security, national economic security, national public health or safety," the report reads.
A walled garden
With this kind of backdrop, government security officials around the world must seek out and employ the very best security measures, and that's where confidential computing comes in. The confidential computing approach protects critical information by isolating sensitive data in a protected, hardware-based computing environment during processing. It allows governments to share the results of machine-learning inferencing on highly-protected or sensitive data sets without requiring them to share the data sets themselves.
Here's how it works: While data is traditionally encrypted at rest and in transit, confidential computing protects data while it's being processed, using hardware-based techniques to isolate data, specific functions or an entire application from the operating system, hypervisor or virtual machine manager. Confidential computing defines protected private memory areas — called enclaves or trusted execution environments (TEE) — to increase the security of application code and data. The transmitted information is encrypted and then decoded once inside the enclave — think of it as a high-tech walled garden. It's impossible to view the data or operations performed on the data in the TEE if you're on the outside. The TEE ensures that only authorized code can access the data, keeping information away not only from cloud or infrastructure providers but also from external threat actors. If the code is altered or tampered, the TEE denies the operation, protecting it from unauthorized use and manipulation.
The result of this approach is that government agencies could enjoy the benefit of cloud-scale machine-learning inferencing without giving up any intellectual property, sensitive criminal investigations or other potentially damaging information to malicious hackers.
"The ability to securely collect, collate, and process data across organizations has always been a challenge for governments," said Hugh Eaton, the vice president of worldwide government at Microsoft. "This is especially true for agencies involved in program benefits and fraud prevention, law enforcement and the criminal justice system, critical infrastructure and defense organizations. Confidential computing helps to remove these barriers, allowing agencies to meet their commitments to the people and communities they serve."
From health care to financial protection
There are a host of government challenges that confidential computing could help address in critical areas ranging from digital identity and cybercrime prevention to machine-learning modeling.
In drug development, for instance, partnered health organizations can combine large data sets to unlock the potential of machine learning — when a model with more data is more accurate — but data is sensitive. Each facility can only see its data set and their patient data is protected. No other facility or even the cloud provider can see the data or training model. Each facility that contributed to training the model can use it and receive useful results.
The Spanish Department of Health, for instance, uses a confidential computing platform with privacy-preserving analytics to accelerate the development and validation of clinical algorithms used in drug development models. The platform significantly reduces the time and cost of developing clinical algorithms, per Spanish officials.
Confidential computing can play a critical role in health care outside of drug development. German citizens must have public or private health insurance, and can choose from different providers. Germans who are registered for public health care insurance can request an electronic patient record from their insurance company. This file digitally stores all medical records as well as information on diagnoses, examinations, test results and treatments.
At the same time, the country also has one of the most wide-ranging sets of laws and compliance regulations when it comes to collecting and processing personal data. The German government has strict rules to protect its digital medical records, which contain highly-sensitive information, such as diagnoses, test results and therapy suggestions. Every provider must ensure data protection within the records, such as encryption through protocols and during transmission. Confidential computing now plays a critical role in that safe processing of information.
A similar data-sharing scenario might occur in the financial industry when secure multiparty computation can be used to detect a money-laundering operation and fraud. Multiple banks can, for example, securely combine data without exposing the personal data of customers. Analytics on the aggregated larger data set can detect the movement of money by one user between multiple banks, without the banks accessing each other's data.
In June, the Monetary Authority of Singapore, for instance, sent a note to the CEOs of all the country's major financial institutions noting that they "should implement appropriate data security measures to protect the confidentiality and integrity of sensitive data in the public cloud, taking into consideration data-at-rest, data-in-motion and data-in-use where applicable." Their suggested solution: "confidential computing solutions if available."
This trend will continue to accelerate. "As the operational environment for governments continues to become more complex with the growing sophistication of computer-based attacks, confidential computing will play a critical role in scaling data in the cloud across the private and public sectors globally," said Eaton. "We'll see this both through the infrastructure directly and the services and applications running on top of confidential computing hardware."
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James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Power
The game industry comes back down to Earth after its pandemic boom
Game company earnings reports this week show a decline from last year's big profits.
The game industry is slowing down as it struggles to maintain last year's record growth.
Photo: Cyril Marcilhacy/Bloomberg via Getty Images
August 5, 2021
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.
August 5, 2021
The video game industry is finally slowing down. After a year of unprecedented and explosive growth due to the COVID-19 pandemic, big game publishers and hardware makers are starting to see profits dip from their 2020 highs and other signs of a return to normalcy.
This week alone, Sony and Nintendo both posted substantial drops in profit compared to this time a year ago, with Sony's operating income down more than 40% and Nintendo's down 17%. Grand Theft Auto maker Take-Two Interactive saw a dip in revenue and said its forecast for the rest of the fiscal year would not match last year's growth, while EA posted a revenue bump but an operating income decline of more than 43% compared to this time a year ago. Ubisoft, which reported earnings last month, saw its sales and bookings this past quarter drop by 14% and 21%, respectively, when compared to a year ago.
All three console makers, including Microsoft in its earnings last month, said they were experiencing declines in sales of third-party games on their platforms. Nintendo in particular has not released a big hit since last year's Animal Crossing: New Horizons, and a number of big game delays and launch fiascos like that of CD Projekt Red's Cyberpunk 2077 have resulted in a notable dearth of hits in the first eight months of the year.
In many cases, game companies are still beating Wall Street estimates, as was the case for both EA and Take-Two and others; the industry is undoubtedly continuing to grow in size. But executives are trying to temper expectations around sustaining the level of growth the industry saw during the pandemic.
"We're gratified to see that as we expected, post-pandemic demand was higher than pre-pandemic demand, and the moderation we expected was not as severe as we expected," Take-Two CEO Strauss Zelnick told GamesIndustry.biz. "As we hopefully get out of this difficult time — it's hard to know given what's going on with the delta variant — it's nice to see the new normal for our business is much stronger than the old normal."
This shift wasn't totally unexpected. Analytics firm Newzoo forecast in May that the game industry would actually contract in 2021 by roughly 1%, only because the growth of last year was not in any way a sustainable, realistic indicator of where the industry was headed in the future.
"It is unique, at least in our history, that we project the declining markets for this year," Tom Wijman, Newzoo's games market lead, told VentureBeat at the time. "While we say the forecast is for the market to decline this year, in the long term, or over more than a few years, there is still very healthy growth for the market. And this year is basically the year where we slightly correct for what was a crazy 2020 for the games market."
At the start of the summer, there wasn't yet a strong indication the game industry had hit that slump. But this week's slate of earnings reports finally brought the game industry back down to Earth. Despite the adjustment, there are still obvious signs that the pandemic forever realigned the industry and pushed it further into the mainstream.
For instance, Sony's game business saw its best first fiscal quarter by revenue in history these past three months. The PlayStation 5 also continues to experience crushing demand, far outpacing supply. As noted by Niko Partners gaming analyst Daniel Ahmad, Sony still cannot make its new console fast enough to keep up with demand, while its version of the hardware with a disc drive is now turning a profit. (The discless PS5 is still sold at a loss.) Sony said it was on track to meet its target of 14.8 million consoles sold by the end of its fiscal year in March 2022.
There are a number of other bright spots for the business. EA has raised its forecasts for the rest of the year on the strength of its services business and the launch of a new game in the Battlefield series this fall. Although its earnings report this week was overshadowed by its ongoing sexual harassment and discrimination crisis, Activision Blizzard experienced an outlying operating income jump of more than 50% this past quarter largely on the strength of its King mobile division. Nintendo is also releasing a new console in October, and Microsoft is gearing up for its biggest first-party software launch in years with the release of Halo Infinite this holiday season.
The game industry may not ever experience the surge in growth and uptick in mainstream popularity that it experienced last year, as everyone began looking for new hobbies and rekindled old ones during the shelter-in-place era of the pandemic. But it's undeniable that a new bar has been set for the industry's financial power and cultural importance. All the industry has to do now is continue releasing new games (and make sure they're polished, not buggy) and keep players coming back.
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Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.
Allocations wants to make it easier to invest in startups as a group
Now valued at $100 million, it's emerging from stealth to challenge Carta and Assure in the SPV market.
Kingsley Advani, CEO of Allocations, wants to make it easier to form SPVs.
Photo: Allocations
August 5, 2021
Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.
August 5, 2021
Software is eating the world, including the venture industry. Carta and Assure have made it easier than ever for people to band together on deals. AngelList's venture arm debuted new ways to create rolling funds. But the latest startup to challenge the incumbents in the space is Allocations, a Miami-based startup that's making it easy to create and close special purpose vehicles, or SPVs, in hours.
"If you look at Pinduoduo and group shopping, SPVs are group investing," said Kingsley Advani, Allocations' founder and CEO. Instead of one investor having to cough up millions, multiple people can write smaller checks in an SPV and invest as a cohort. It's a trend that's taken off in 2021 as investors compete to get into hot startups.
"Typically for a company like Robinhood or Coinbase or SpaceX back then, if you're an individual, you'd need to do $5 million on your own. SPVs let you dice that up and you can come in with much smaller minimum checks," Advani said.
Launched in 2019, Allocations is emerging from stealth having raised $4 million at a $100 million valuation. Investors include people like r/WallStreetBets founder Jaime Rogozinski and DoNotPay founder Joshua Browder, who not only invested, but also used Allocations to raise his own fund through the service, Advani said.
Allocations is targeting sub-$10 million private equity transactions and is focused on SPVs and funds to start. It's also eyeing a Regulation CF product to allow startups to crowdfund on the service (that one requires more financial regulations to jump through before it can launch). So far, customers have used its platform to create SPVs to invest in startups like Pipe, Relativity Space and BlockFi.
"It allows people to have access to an investment that they wouldn't usually have access to," Advani said.
Advani should know: He got his start investing in tech companies through SPVs. He had done some early investing in bitcoin around 2013, but in 2017, he started an investor group with friends on a Slack chatroom to co-invest in deals. The process of creating an SPV was challenging, and frustrated, Advani decided to build his own tools to make it easier.
"If you look at the $2.9 trillion raised annually [in private equity], only a small subset is done digitally or with technology companies. Most of it is done with lawyers, manual accountants and manual compliance, so there's a huge growth of the digital providers," he said.
Allocations is currently doing $4 million in ARR from the fees it charges for SPV and fund formation. Its ambition isn't to take over fund management and SPVs for bigger firms, but to target emerging fund managers and angel investors. It'll have to compete with existing providers, like Carta and Assure, but as SPVs become more popular, it only grows the pie of who can invest.
"The product is not for Big VC. It's about making a more equitable private equity market and putting investments in the hands of more people," Advani said. "I feel like the VCs have guarded the VC industry for too long, and now the long tail of investors have the chance to participate."
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Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.
Protocol | Fintech
How BankProv switched from community banking to crypto banking
BankProv is almost 200 years old, but it's competing with new banking startups by going after the newest area of finance — crypto.
BankProv's main office in Amesbury, Massachusetts hearkens back to its past. But the bank is looking to the future.
Photo: Google Street View
August 5, 2021
Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.
August 4, 2021
When BankProv was started, horse and buggy was state of the art for moving money. Now it's looking to use bitcoin and ether.
The bank was founded in 1828 as the Provident Bank — a name it kept until last July — and now wants to be a key provider for crypto companies that need banking services.
Crypto companies need traditional banking services for a variety of purposes. But they can face a hard time getting access to financial services, because big institutions may not understand or trust them.
"There's a gap in who will provide banking services for them. They're safe and legal entities," said Carie Kelly, senior vice president of virtual banking at BankProv. "They're tired of hearing 'no' from other institutions."
It's easy for community and regional banks to see nimble neobanks and national online banks just as competitors for deposits and loans. But some instead see an opportunity to work with nonbank fintechs, either as sponsor banks or by providing services to these tech companies.
BankProv, the tenth oldest financial institution in the U.S., is looking to fill those needs with a number of services, from providing traditional business banking services to crypto firms to engaging in new forms of lending backed by crypto deposits and creating a real-time payment network. BankProv's main crypto clients are crypto software and protocol developers, crypto exchanges, crypto mining operators and large investment firms, as well as a few bitcoin ATM companies.
While the crypto industry's regulatory system is tangled and still unresolved, most crypto companies are businesses that need to deal in fiat currency at some point. For that, they need a regulated bank.
While BankProv is smaller than some other competitors in crypto banking such as Silvergate, it's hoping to leverage its long history along with new products to build out its crypto customer base.
BankProv offers banking as a service, offering APIs through startup Treasury Prime to connect with its banking products. There's also traditional business banking — which is used by crypto companies — with services such as deposits, loans, wire and ACH transfers, real-time payments and remote deposit capture. BankProv has seven branches in Massachusetts and New Hampshire and $1.5 billion in total assets and $1.3 billion in total loans in its most recent quarter, according to filings.
With the high volatility and risk involved in crypto, insurance is a selling point. BankProv has unlimited insurance for its deposits through the Depositors Insurance Fund, a Massachusetts-based private insurance company started in 1934 that provides unlimited deposit insurance above the $250,000 FDIC limit. DIF has about $500 million in deposits and is funded by its member banks. That unlimited insurance is appealing to crypto companies that may have some high risk, BankProv COO Joe Mancini said.
In 2020 BankProv released its first crypto loans backed by bitcoin. With this program, businesses can get loans backed by the crypto that they hold. It's similar to a traditional loan except that instead of using real estate or stock or other assets as collateral, they're using bitcoin. These loans can be either for BankProv's clients to loan out to their customers or for the clients to get the loans themselves — though they are mainly for loaning out to end customers.
In June, BankProv extended this program to ether-backed loans through a partnership with crypto custody bank Anchorage Digital. BankProv provided a $36 million line of credit to Anchorage, which then lends out dollars to its customers that have investments in ether and want a loan. By getting this loan, the customers or investors who hold ether don't need to liquidate their crypto to get a loan.
There are some differences from a traditional loan due to the wild volatility of crypto prices. BankProv has a system that tracks pricing continuously and sends alerts if price swings could trigger a margin call. If a customer gets that notification, they have a certain amount of time to add more bitcoin or ether to return the loan to its approved loan-to-value ratio, Mancini said.
"We've tested it. Every call we've made has been fulfilled. It's good to see the system working," said Mancini.
The bank also has ProvXchange, a new service that enables real-time payments between BankProv clients. This is appealing to tech-focused companies that are used to crypto-based transactions. "You can send payments and transfer funds at any point, in real time," Mancini said. Competitors like Silvergate and Signature also offer similar services.
BankProv's big move into crypto was headed by Dave Mansfield, who became CEO eight years ago after serving as CFO. Once known as a traditional community bank, the bank has been steered by Mansfield into building out these new business lines using his regulatory background to bring a focus on compliance to these new markets, Kelly said: Mansfield was previously a bank examiner.
About four years ago, the bank started moving into crypto and BankProv started interviewing crypto businesses and finding out what they needed. It started out with deposit services for crypto companies, Kelly said.
While serving crypto companies which are dealing heavily in cryptocurrencies, the capital BankProv holds for these clients is in fiat currency — which companies use for paying bills, payroll and other cash needs. That's an important distinction for the bank. Its customers may be exploring the Wild West of crypto, but BankProv is making money by taking care of their old-fashioned finance.
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Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.
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