Commanding Attention: Startup Everledger Makes A Knockout First Impression
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For an event that was organized by IBM, one of the largest (and oldest) technology companies in the world, it was no surprise to hear “innovation” being the center point of this year’s edition of the Edge conference. Staged in the United States in September at the MGM Grand in Las Vegas, Edge 2016 aimed to inspire its attendees to “outthink the status quo,” with IBM using the event to showcase how it was enabling great strides and delivering value in fields as varied as cognitive business, cloud technology and collaborative innovation. High-ranking IBM executives like IBM Systems Senior Vice President Tom Rosamilia took to the Edge 2016 stage to deliver this message, which was further bolstered by its partners in these endeavors, which included bigwigs like Red Bull Racing, Welch’s, and Hortonworks.
But while all of these prolific industry names gave presentations that were impressive in their own right, I must admit here that, from a personal standpoint, the Edge 2016 speaker that particularly stood out to me –entrepreneur Leanne Kemp- didn’t belong to a “big” company per se: Kemp is the founder and CEO of an 18-month-old startup called Everledger, that currently employs a team of 20 people. But as Kemp outlined the work that her enterprise was doing, the technology it was using to do this, and the scope of its applications, it was easy to see why the London-headquartered Everledger (with offices in Australia and New York) warranted a presence on the Edge 2016 stage, despite the company’s relatively young age and small size- this startup definitely seems to be on to something with its offering, and Kemp’s passion and drive for her company was, quite simply, grand and infectious.
Everledger describes itself as “a permanent, digital, global ledger that tracks and protects diamonds and other valuable goods on their lifetime journey.” With the use of technology like blockchain, smart contracts, machine vision and AI, this startup essentially creates an immutable digital footprint for a diamond, thereby providing a secure, transparent record which stakeholders throughout the supply chain can use to track and protect their assets. Given its current focus on the diamond industry, Kemp explains that Everledger’s clients include banks, insurance companies and certification houses, and its technology has, so far, been used to certify over a million diamonds. That’s no small feat for a company that was founded only in April 2015, which also boasts of having won a number of industry awards, like the 2015 BBVA Europe Open Talent Competition, the 2015 Meffy Awards, and the 2016 Fintech Finals, to name a few.
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The value of what Everledger brings to the table can be best understood when one looks at what is at stake here: the diamond industry is worth about US$80 billion, but it is rattled with problems like theft and fraud, as well as concerns over their sourcing from conflict zones. According to Everledger, insurance fraud is a global problem, with US$2.5 billion spent a year by insurers to tackle this problem. With this in mind, the solution Everledger offers can be put to good use in diamond verification processes by banks, insurers, law enforcement, and even the owners themselves, who can now be confident about their asset’s sourcing. “I think the real game changer for us is when we are able to give enough transparency with a depth of data over time, so that the consumer can have the full consciousness of mind around the purchase of the diamond,” Kemp says. “I think the horizon for us is to bring full spread of the true provenance, the chain of custody, and the reputation of the diamond to the consumer.”
And while Everledger’s technology has been currently put to use for diamonds, the underlying ledger concept can be used to track other valuable assets as well, like gemstones, art, luxury goods and more. “You know, Amazon started with books, and Everledger started with diamonds,” Kemp says. “Our vision is so much bigger. You go from diamonds to colored stones, rubies and sapphires; you can go to watches to art to wine.” It’s a bold vision- but it’s one that Kemp is confident that Everledger can accomplish because of the ingenuity of its solution. “I think the reaction to Everledger from day one has been somewhat of an ‘aha!’ moment for many, many people,” she says. “And I think that’s a testament to our ability to distill the technology to its pure potent form to really understand the core building blocks that were never going to change through the evolution of the tech, and to apply that to a problem… We knew what the problem was, and we had the ability to say, hey, there is some technology here that could actually really solve this. And these problems are problems that have not yet been solved before today- so we truly are trying to solve a problem that is real world issue.”
Kemp, a serial entrepreneur who has built and sold startups successfully in the past, says that Everledger was predominantly funded from her own personal wealth. The startup was invited to be a part of the 2015 Barclays Accelerator program in London, which afforded it an investment of US$120,000 as well. “We were supported by an industry name this year, but we haven’t publicly announced that,” Kemp reveals. “We will announce that as part of our Series A that will come out in the next number of months.” Having showcased its digital encryption expertise in the polished diamonds space, Everledger announced at Edge 2016 that it has now extended its technology to tackle the trade of rough diamonds as well, certified through the UN-mandated Kimberley Process, and thus enabling transparency at every stage of a diamond’s journey. Everledger’s presence at Edge 2016 is also reflective of the good working relationship between the startup and IBM, and I was curious to hear from Kemp how this partnership came about. “We are a company that enables technology, so that industry can consume it, and we can solve problems,” she explains. “We have some of the brightest minds in the insurance business; we have some of the brightest engineers that are working with us. But we are not a protocol-based engineering team, so we’re reliant upon the emerging fabrics that come to market. And there have been very many startups that have attempted in the space that have built certain architecture, and we’ve embraced that architecture. But when we got to the first year [of the company], we achieved the million diamond mark, and it was actually quite a sobering moment for me at Christmas, because it had dawned upon me that whilst a lot of people were applauding the engineering efforts of our team, the reality is we need to go from a million to 10 million to 30 million diamonds. How do we scale that securely, how do we do that globally, and how do we also bring the elasticity in terms of that service offering to market? And so, to bring that elasticity, as well as the rigidity ensuring that if you stretch it too long, it’s not going to snap, [we chose to work with IBM].”
And Kemp doesn’t seem to regret her decision one bit- she was quite gracious of IBM’s efforts in relation to Everledger. “IBM is one of the chosen companies that’s been around for 100 years. They’ve continued to re-innovate themselves; innovate the market. And they understand security. They understand hard architecture. And they understand enterprise level applications. So, for me, it was around, being counter-intuitive around some of the decisions that we were making as a startup. Actually kind of doing the old Wayne Gretzky, you know, let’s go to where the puck is likely to be, rather than trying to be there right this very second. And, you know, that intuition is paying off right now for us.” Given Everledger’s successful collaboration with IBM, I ask Kemp if she had any tips for other entrepreneurs who may be, like her at one point, weighing the pros and cons of working with an industry giant. Kemp replies with a mountaineering analogy. “There are ways to scale the heights of Everest. And I think that the air is thin when you get up there quite high. But the ability to find the right sherpa in industry to bring you through those parts, and the challenges and the potential avalanches, and to weather the storms that happen is really the key to success. You know, for me, we’ve invested a lot in understanding the challenges of us wanting to really take ourselves to new heights. But IBM has been a part of that sherpa process for us. And, you know, we have not necessarily spent a lot of time in the business-facing end of IBM; we really have been spending a lot of time with the technology team. We’ve been making the engineering investment. We’ve been contributing to the open source initiative. You know, we’ve been giving first; we’ve been giving it out, and respectfully, IBM has supported us through this journey, and quite rightly, probably to the benefit of them, as well as it is to the benefit of us.”
But weren’t there ever any concerns about working with a giant like IBM- perhaps worries about the startup being swallowed by it? “You know, IBM was once a startup,” Kemp replies. “They were once a startup. And I don’t think I’ve forgotten that. So, at the very core of IBM, you know, they really have the embodiment of trust. And I remember having a conversation with some of the top management team, and looking them in the eye and saying, you know, this could potentially be a David and Goliath moment. I mean, there’s no reason why you couldn’t shove Everledger to one side, and actually put an engineering army of 200 people to it, and take us out of the market in five split seconds. But I really think, and, you know, maybe I’m putting words in IBM’s mouth, but I really think that they’ve enjoyed the true collaboration. I think that they have enjoyed the sensitivities that we’ve brought to the engineering framework. We really understand the acuteness of the problems in the marketplace. And you know, we’ve been agile in our approach. I mean, a 20-hour working rhythm for us, 24/7 across three countries in 18 months, is really something that I guess they probably haven’t seen too many times in a startup. I mean, we’re hungry. We want IBM to work with us. We’ll do whatever it takes to be sure that the industry can consume this technology. And for me, I want to be the crazy old lady in a nursing home that tells the story, that there was something that we did to change the world.”