Australian blockchain startup Power Ledger is looking at a new stage of growth in the wake of its $34 million initial coin offering after being named one of the recipients to gain funding in an $8 million government smart cities grant.
Announced this week, the energy trading business joined other recipients, including Curtin University, Murdoch University, CSIRO/Data61, and CISCO with the funding used to trial a blockchain-powered distributed energy and water system in the Fremantle. The government will directly contribute $2.57 million in funding with the additional $5.68 million funded through the project’s partners.
Along with rolling out a trial program, the project will be looking into how cities can effectively use blockchain technologies to moderate energy and water usage. Additionally, the storage and distribution of power will be done through a “community-owned battery”, which Power Ledger co-founder Jemma Green says one part of the company’s part of the grant will go towards purchasing.
“Power Ledger has received $1.3 million from the Department of Prime Minister and Cabinet, and part of those proceeds will go towards purchasing a battery, and part of it will be used to fund the development of the application platform,” she says.
Power Ledger completed its raise of $34 million via one of Australia’s first successful initial coin offerings in October, issuing 540 million POWR tokens to participants who contributed digital currencies such as Ethereum or Bitcoin.
POWR token skyrocketing
Since the raise completed, the POWR tokens have been launched onto online cryptocurrency exchanges such as Bittrex and Binance. According to cryptocurrency price trackers, POWR tokens have seen an increase of approximately 800% since their launch into secondary markets, with the token being worth 55 US cents (73c) at time of publication.
Power Ledger’s founders and developers were allocated 150 million POWR tokens via escrow contract as part of the token sale. Those tokens are now worth approximately $109 million, with an additional $182 million locked in a separate development escrow contract for use “if needed”.
Green says the company is “honestly delighted” with the market’s response to the project, believing it was the company’s ability to demonstrate its product offering stoked investor confidence.
“We’re honestly delighted with the market’s response. Many companies do ICOs with concepts when they haven’t actually developed the platform, where we have a platform with real-life applications,” she says.
While Green was tight-lipped on future online market launches for the token, she was pleased to see “a lot of liquidity” in the secondary market.
The company is looking to roll out further applications for the POWR token, with Green saying that is one of the company’s main focuses. One such potential application, as identified by the project’s whitepaper, would be allowing customers to donate POWR to sustainable energy projects or charities, with an aim of “driving sustainability”.
“As the Ecosystem user-base grows, the demand for POWR tokens will likely increase,” reads the whitepaper.
“We’ve got a pipeline of projects we’re working on which will hopefully see an increase of utilisation for the POWR token. That’s the focus of the business – create projects which will increase the use of the POWR token,” Green says.
Investment a sign of confidence for Aussie blockchain startups
The company and its academic partners put in the submission for the smart cities grant over six months ago and are all “delighted” to see it come to fruition. Green believes while this is not only a boon for blockchain tech in Australia, it’s also a signal the federal government is embracing innovation.
“We are really delighted to see the federal government supporting Australian innovation, and recognising the role blockchain can potentially play for more resilient and efficient ecosystems,” she says.
With Australia having some of the highest electricity prices in the world, Green says it makes sense the government would be looking to ways to make the electricity system more efficient, calling the price of electricity a “hot topic”.
“Tech like the blockchain will be deployed in these areas sooner than any other part of the world, and Australia is in the position to be a fantastic testbed and a market leader,” she says.
* The author of this article has a small stake in POWR tokens.