Our investment in Gospel Technology

Conviction

What’s in a word? “A firmly held belief” or “the feeling of being sure that what you believe is true” are two definitions. In stockmarket terms, conviction investing is a specific method based on picking fewer stocks than traditionally-managed funds, taking larger individual positions and sticking with them for longer.

It’s also a word used with abundance in the VC world and one which is, on the surface, straightforward to grasp, more instinctive and less technical than stockmarkets. However, as a relative newcomer to venture, knowing when one has ‘conviction’ is more complex than you may think. When do you know you have it? Is it an absolute concept or can one have 80% conviction? It’s a bit like trying to decipher the emotional complexities of a first romance, “is this what love really feels like?”.

In early stage investing, false signals of conviction, often influenced by similarities to a previous success, personal chemistry or referrals from trusted third parties are all common. One must try to recognise and filter out any such biases.

However, this is not always possible and it was thus so with Gospel. Following a LocalGlobe Angel meet-up, Gumtree founder Michael Pennington suggested we should take a look at Gospel “an enterprise security platform based on blockchain technology”. Whilst having great respect for Michael, fatigue with blockchain-badged start-ups was creeping in so I approached the call with founder Ian Smith with a degree of skepticism.

Within five minutes of our conversation, I felt what I guess can only be described as ‘conviction’. The impassioned way Ian described the business, the scale of the problem that he was solving and the clarity of how Gospel was going to address this was utterly compelling. Blockchain was but a sideline, simply a technology shift that allowed him to build the business he wanted to build. You could call it conviction at first sight.

The problem Gospel is solving is one splashed across the front pages of many newspapers with increasing regularity — how do big companies and public entities stop critical data from being compromised? CEOs are under huge pressure to digitise their businesses, strike innovative partnerships and shift to cloud computing but as they do so, traditional ‘hub and spoke’ or centralised approaches to data security are failing them.

Struggling CTOs and CSOs see their teams apply shadow IT fixes and patched workarounds to meet the business need to ‘move faster’. Ageing systems are deconstructed to meet these demands by breaking original permissions. All this results in slow, expensive and manual fixes and all inherently insecure.

Enter Gospel. Gospel helps companies secure their data in a decentralised and distributed world. It does this by setting and enforcing common-sense, contextual data access policies and maintaining a full and immutable record of how, why and when data was accessed and by whom. Oh, and it happens to be based on (a private) blockchain.

To put this into real life, take one of Gospel’s first clients, a major engine manufacturer, and the critical issue of parts recall. By placing all the complex manufacturing and assembly processes on a private, permissioned blockchain the client now has an immutable audit of every component and its provenance, right down to every nut and bolt and when and where it was cast. Before, tracing any individual part was a labour intensive paper-trail through several third party records. Gospel has cut the identification process down from 16 days to three minutes.

Network effects make the business an even more interesting one, particularly in supply chain environments. In the above example, two other major suppliers to Gospel’s client are involved in the assembly process meaning by default, they are now ‘on’ the platform. What a great entree to two potential new clients.

A recent article by Forbes encapsulates what we love about Gospel. “The more fanatic members of the blockchain community might look at what Gospel is doing and denigrate them as ‘not really blockchain,’ perhaps, or at least not part of the ‘Web 3.0 revolution.’

In contrast, from the perspective of the enterprise, Gospel has a real business model that will generate profits based upon solving real business problems for customers willing to pay for such solutions.”

Maybe its this old-fashioned combination of revenue and profit that formed our conviction?

We’re very excited to be part of the Gospel journey and to join a stellar line up of angel investors, who alongside Michael Pennington, include Vivek Kundra (former CIO of the US government under President Obama), Keith Robinson (global head of strategy at Sage) and Lex van Dam (former head of proprietary trading at Goldman Sachs and Head of hedge fund GLG).