Nansen.ai is one of the most powerful on-chain data analytics platforms. It tracks and analyses public blockchain information across some 90 million Ethereum wallets, thus giving an edge to retail and institutional crypto traders and investors to make better decisions. Some of Nansen’s customers include crypto-centric funds like Polychain, Three Arrows, Pantera, and Defiance Capital.
Founded in 2020, Nansen has raised a seed round and $12 million in series A, collecting a total of $13.2 million in funding. Its investors include big names in the crypto space such as Coinbase, QCP Capital, and a16z.
Headquartered in Singapore, Nansen has a team that spans over 20 countries. I sat with globe-trotting entrepreneur and founder Alex Svanevik to pick his brain about data-driven insights in cryptocurrency and blockchain.
From AI engineer to crypto entrepreneur
Born in Norway, Svanevik was trained in Artificial Intelligence (AI) and he has worked across Europe in data science and consulting. In 2017, he discovered Ethereum and became obsessed with cryptocurrency and blockchain.
“For the longest time I ignored Bitcoin, because there was nothing much to it. But Ethereum is a different scenario altogether. There is so much potential, so many applications. For the first time ever, it dawned on me what cryptocurrency and blockchain technology are all about. From an AI perspective, the smart contract concept is truly fascinating too.”
Svanevik proceeded to quit his job and went into crypto full-time. He got his first gig in Hong Kong as a chief data scientist for Coinfi, a market intelligence platform that offers crowdsourced and professionally curated research, analysis, trading signals, trading algorithms, and news for crypto assets.
This was back in 2018, at the tail end of the Initial Coin Offering (ICO) boom, where many of companies tried to raise funds through ICOs, which had low compliance standards and poor delivery, leading to a pump-and-dump mania that precipitated the Great Crypto Crash.
As it turned out, Coinfi was one of the losers of this cycle. It raised US$15 million, mostly kept in ETH treasury, and when ETH plunged from US$400 to US$80, it did not have enough money to pay its employees.
“I was caught in a bad situation, as I was under a two-year lease contract with Coinfi, and was living in Hong Kong, the most expensive market for real estate in the world. Yes I was one of the victims of the horror stories in 2018, but also, a survivor.”
According to Svanevik, Coinfi failed because its management team was messy and incompetent. It did not manage the treasury in a responsible way. There was no clear road map and no clear product vision. What the company was good at was marketing and raising money.
Indeed, this had long been one of the biggest doubts and stigma towards the crypto industry. The ease of fundraising through ICO means lack of compliance, lack of regulation, and lower standards for anyone to start a subpar project that they might abandon at any time, either due to poor skills or fraudulent intentions. Rug-pulls, scams and project failures abound in the market, which explain the aversion of traditional finance investors to the crypto market.
“Well it is a nuanced landscape right,” said Svanevik when I pointed this out. “Yes you have a lot of rug-pulls and failures, but on the other hand you also see a lot of genuine innovation being made. There are a lot of companies and protocols that are revolutionary.”
Alex added that despite his low point in 2018, he never reconsidered working in the crypto industry. “I never doubted the future of crypto and blockchain,” Svanevik said with conviction. “As an engineer, I understand how revolutionary this technology is, this is the future. It might not be the smoothest trajectory to get there, but we will get there.”
Just to give you an idea how bullish he is in the cryptocurrency industry, 99% of his personal assets are invested in the crypto space, including his stocks in Nansen.
“I learnt a great deal from my experience in Coinfi,” Svanevik said. “It was interesting to see how a startup imploded from the inside, and now as a founder myself I make sure that this won’t happen to Nansen.”
After the failure of Coinfi, Svanevik proceeded to set up Nansen, which is a modification and upgrade of the Coinfi product. He said he was committed to do things differently this time around.
For one, Svanevik ensures that the management team oversees and anticipates everything. He does not want to lay off employees due to poor operation and poor management of funding. He is defensive with a long runway for the company and is committed to building the best company and the best product possible.
He also decided on a private limited organisation structure instead of a Decentralised Autonomous Organization (DAO). He raised funds traditionally from angel investors and VCs instead of doing an ICO.
“The thing with ICO is, a lot of time you have to find a way to fit the tokens into a product. So a lot of times companies design some suboptimal side product just to justify the tokens. I don’t want to worry about all that. I just want to build a product that helps grow the cryptocurrency ecosystem.”
Hence Nansen is less decentralised than many other crypto companies, however, Svanevik still adheres to many of the philosophies that apply to DAOs, such as transparency, collaboration, and co-creation.
What it Takes to Build a Crypto Company
According to Svanevik, the biggest challenge for any crypto founder is a lack of focus.
“The crypto space is evolving at a breakneck pace. Everyday, there is a new invention, a new company or DAO being set up, a new ICO being raised, a new protocol being launched, a new trend emerging. As a result, founders can get distracted so easily.”
The nature of cryptocurrency development is co-creation. There is a decentralisation of ownership and creation of products through tokens, and things are built in public with open-source codes and protocols. Anyone savvy enough can contribute to building a protocol.
“As a crypto founder, you almost have to throw away the old playbook. Everything is transparent, but thus also more chaotic and confusing. There is so much distraction and possibilities, hence it might be difficult for anyone to stick to a long-term plan and vision. You can’t really plan for ten, twenty years ahead in crypto. Infrastructure, protocols, market sentiment and even regulation change so rapidly, day to day,” Svanevik said.
Some of the universal principles in building tech startups apply to crypto startups, for example team and culture building, efficient management and fundraising. However, a crypto founder needs to be much more agile, adaptable, curious, and innovative than the average tech founder.
“The barrier of entry to creating a crypto company or project is lower, which makes the whole space much more democratic with more potential for innovation, but also rife with scams and incompetent founders. It is easy to be a crypto founder, but it is not easy to be a good crypto founder,” Svanevik said.
Ease in fundraising, lack of regulatory enforcement, and low operation costs all contribute to this lower barrier of entry. For example, projects often do not require large teams because they are creating a smart contract that once deployed, can live forever on the chain, hence there is no maintenance or overhead cost required in many DeFi protocols.
“A good crypto founder needs to be agile to respond to changes, but also maintain a good degree of focus and commitment. This is the recipe for success,”
Courage, Transparency, Speed, Curiosity
Nansen’s name was taken from a Norwegian polymath: an explorer, scientist, diplomat, and humanitarian.
Key to Nansen’s core values are courage, transparency, speed, and curiosity.
“Again, even though Nansen is a traditional private limited company, we do a lot of things in ways that are inspired by the crypto and blockchain space,” Svanevik explained.
“First, it takes courage to create a totally new product in a new market, courage to go after your vision and conviction despite others’ opinion. Secondly, I always default to transparency. Transparency makes things more fair and efficient for everyone, especially when it comes to communicating to the whole company. Everyone is informed at one go and everyone knows what the game plan is. Next we have speed and curiosity which are all very important to stay competitive in the space. As I said, things are evolving at lightning speed, so you have to move very fast as well, and you have to stay curious with the latest development and innovation. I prioritise hiring employees who are curious.”
Svanevik found inspiration from innovator Elon Musk, who started as an engineer before becoming the world’s most successful entrepreneur. “I consider myself as an all-rounded person by now, more of an entrepreneur than an engineer”, Alex told me. “I am not an Elon’s fanboy, but I find that he has a very visionary and unique approach in the ways he does things, which has contributed to his successes, and I like that. I think Elon exemplifies some of Nansen values like courage and curiosity.”
Since 2020, Nansen.ai has become one of the fastest growing crypto startups in the world. It has been rated as an excellent and useful product for many sophisticated crypto traders and investors, big and small. His family and friends, from being low-key doubtful when he quit everything to work in crypto in 2018, now are fully supportive of him, Svanevik said.
Future Anticipation in the Crypto Space
Moving forward, Svanevik envisions building a data analytics platform that is user-friendly enough for the mainstream users. “Right now Nansen.ai is very niche and only useful for the more sophisticated and wealthier investors, such as big funds. However my aim is to develop the whole crypto ecosystem and thus empower every other average trader and investor too. Information is power and I want to empower everyone.”
Svanevik said it is fine to build a product for rich customers initially, with the roadmap to develop a product everyone else can access later on. “Just like Tesla, their first car was the Roadster, which was only affordable to rich enthusiasts. But their goal is to make electric cars mainstream and therefore they want to reach as many people as possible. We feel the same way too at Nansen. We aim to build a more mainstream product from the profits of our current product and niche audience.”
I asked Svanevik what he is most excited about with the development of web3, and he said that in the long term he is looking forward to seeing cryptocurrency becoming mainstream. He is excited that he is going to play a part to make it happen. “It is not going to happen overnight, I don’t expect to see a billion crypto users in the next year or so. But we are going to get there.”
“In the short term, I am excited about the development in the NFT space. NFT is going to be a key driver in making cryptocurrency and blockchain technology more mainstream and accessible to everyone. People do not care much about finance, but when it comes to pop culture, gaming, entertainment, music, and the arts, NFTs have made crypto more compelling and trendy to more people.”
When asked about what he is most worried or anxious about with web3, Svanevik said that he is not one who worries much about anything. “I find it useless to worry or get anxious about things that might or might not happen yet,” he said.
“What’s the point? When a problem appears, either things are already out of your hands, or you respond to it and try to mitigate it as best as you can. But there is no point worrying or expecting the worst that is yet to come. It is counterproductive.”
Follow Alex on Twitter.