The agenda was packed with acquisition talks. At the same time, there were invitations to speak at prestigious conferences. Interest from the market was, in short, high. Until that particular month of March when everything was temporarily put on hold. And so the Corona Bridging Loan (COL) for NorthChain came at just the right time.
'Of course it was a bit of a scare,' Jelko van der Wiel, one of NorthChain's partners, looks back on the first weeks after the lockdown. 'But we never really panicked. Panic brings little good. Besides: our technology is so pioneering, there will always be a market for it. That has proven to be the case, because in the meantime it's taking applications by storm.'
In a nutshell, NorthChain, founded in 2018, has developed a method by which business processes can be optimized and automated. Using private blockchains, to be precise. That sounds complicated, but the opposite turns out to be true. 'In the blockchain you can implement your business processes in a very natural way,' Herman Balsters explains. Herman is also a partner of the Groningen company and also co-inventor of the technology Jelko just mentioned. ' As the name suggests, blockchain is a chain of blocks,' he continues. 'Each block is a step in your business process. So all processes are logged as a chain on the blockchain. Transparent, traceable, secure and not mutable. That ultimately leads to more efficient and manageable business processes, minimal error rates and low costs.'
In particular, it is NorthChain's approach that is appealing to a growing number of organizations. That approach is based in part on the OLE method, which allows blockchains to be designed on a business-oriented basis. OLE is a natural language that even non-IT people can understand. Indeed, it enables them to read and write blockchain code themselves. But first, one's own organization must be carefully analyzed in order to then arrive at a good modeling of the business process. What do we want and how should it work? In other words: not the technology, but the content of the process is central to NorthChain's approach.
'Only when everything is right in terms of content do we move toward technology,' Herman clarifies. 'Of course, we make software and are therefore an IT company. But above all, we are an organization of business experts. We examine business processes, make diagnoses and translate that into models. Those models serve as the basis for implementing business processes in the IT environment. Gabe van der Weijde and Stefan de Ruiter, two other partners within NorthChain, have developed an innovative technology for this, an application of so-called compiler technology. Providing a desired model in the OLE language to the compiler, a kind of translation engine, automatically generates blockchain code and the corresponding dashboard and provides a possibility for linking to existing IT systems. '
Before corona broke out, NorthChain had the wind in its sails. For example, pilots at a variety of organizations had overwhelmingly demonstrated that the company lives up to what it stands for. Herman and Jelko were also invited to speak at the Compliance & Risk Congress 2020 in Amsterdam at the end of January. Their story struck a chord and created a noticeable spin-off. The crisis logically delayed the realization of these opportunities. And so we had to switch gears at lightning speed. 'We tried to contain fixed costs as much as possible,' Jelko says. 'Still, we continued to hire and train people even in corona time. Good people are usually hard to find. What we need is really the top of the top. And if you can get them, you shouldn't let them walk away. The COL helped us tremendously in that phase. We had invested heavily in the company in the period before that and saw that we were on the right track. Then it is nice that the NOM wants to support your growth ambitions on behalf of the government.
Critical appraisal process
A very quick action, Jelko calls the fulfillment of the scheme. Thus, shortly after submitting the application, the redeeming phone call came. NorthChain turned out to meet all the conditions for the COL. 'This was preceded, as it should be, by a critical assessment process,' he says. 'You have to submit your grades and answer all kinds of questions. You just have to come up with a good story. We managed to convince the NOM that we are a healthy company and will remain so after the corona period. It was a smooth process in which we received excellent guidance. NOM really went ahead and deserves a big compliment for that. Thanks to the bridging loan we were able to attract and train new people and thus continue to grow.'
In addition to the OLE method and compiler technology, training is also one of the corks that NorthChain thrives on. The organization even has its own academy where over 30 people have now been trained as blockchain engineers. As independent consultants, they can then share their knowledge within their own company or with their clients. 'The technology is solid and we are currently scaling it up,' Herman indicates. 'The bottleneck is mainly in consultancy. You need people who visit companies and can map business processes. Those people, with a business background and preferably a STEM aptitude, are trained in our academy. With excellent results so far. Without exception, they set off enthusiastically and often return with new applications. In recent months, for example, there has been interest from healthcare, financial services, logistics and manufacturing companies, among others. So everything points to a bright future for NorthChain. Nice that the COL was able to contribute to that.
In this white paper you will learn:
- What you have to deal with when you start working with investors
- Differences and similarities between bank funding, subordinated loan and equity capital
- In what ways NOM as an investor can help you
Please note that this whitepaper is only available in Dutch at the moment. We are in the process of translating this whitepaper.