The Backstory To A $22M Syndicated Loan, Product Pivots, And Everything Else In Between

Pictured from left to right: Dr. Kyung-Hun Ha and Dr. Richard Lohwasser

Image courtesy, Lition

Lition has developed an enterprise public-private blockchain on top of ethereum with a deletable blockchain protocol. The company recently raised $2,000,000 from its seed investors, $900,000 during the enterprise round and then Lition went on to announce its public token sale, which sold out. 

Interestingly, during Lition’s public sale, the company raised $2,000,000 in under 19 minutes, bringing the total funding to date at $4,900,000. Here is the backstory to Lition. From how the 2 founders quit their high-paying jobs in the corporate world, to product pivots and a $22,000,000 syndicated loan. With, everything else in between.

The founders quit $200,000 salaries

During 2013, Dr. Richard Lohwasser and Dr. Kyung-Hun Ha were working both in senior positions at Vattenfall, a Swedish power company that is wholly owned by the Swedish state. 

In 2016, the pair decide to leave Vattenfall and go their separate ways. Ha founded an e-commerce store called Fixie Fever, Dr. Lohwasser joins the independent retail energy supplier ExtraEnergie as there new managing director for operations, earning a salary of over $200,000 per annum.

After some time had passed, the pair, had an idea to create a P2P energy exchange decentralized app (dApp) in Germany. Late 2017, they pitched this idea to ExtraEnergie and other traditional utilities who immediately dismissed the idea, saying that they did not believe the idea was technically feasible.

Dr. Lohwasser and Dr. Ha disliked the way that the big 4 (Vattenfall, EON, RWE, and ENBW) German utility companies charged too much for green energy, and were frustrated by the lack of innovation in these companies, such as the use of blockchain technology and AI. So, they quit their jobs in 2017 to start Lition.

Lition P2P energy exchange launches

Fast forward to April 2018, Dr. Lohwasser and Dr. Ha applied for a government license to sell electricity in Germany. This government license was approved, which saw Lition launch their P2P energy exchange. 

Within a month after the government’s approval, the pair had on-boarded local grid operators and set up operations such as call centers and billing departments to serve customers. 

Around the same time, Lition launched its consumer website and partnered with GASAG, a clean energy vendor to connect their customers with energy producers directly through blockchain technology

The GASAG partnership gave consumers the power to determine the source of their electricity themselves, as well as, manually change their supplier on a daily basis—or alternatively, consumers could use Lition’s technology to do this on their behalf.

However, Dr. Lohwasser and Dr. Ha later realized that the transaction fees on the ethereum blockchain were high for both customers and providers. Not too long after, Lition became concerned with on-chain security, which is why the company looked for new solutions. 

Dissatisfied with ethereum, Lition pivots

Within a few months of having the government license to sell electricity in Germany, the Lition team decided to pivot and work on a public-private deletable blockchain infrastructure that allowed for data to be deleted.

According to Dr. Ha, the Lition pivot “Reduces smart contract transaction costs from $0.50 to less than $0.01 with the transaction being completed in under 3 seconds.” However, during this time, the company was facing two problems:

  1. The company had very little brand awareness about their project, nor had they built a community behind their project. 
  2. In order for Lition to continue working on their public-private deletable blockchain solution, they would require funding to do so.

The company sought out funding to address the aforementioned issues above and raised $2,000,000 from seed their investors Longhash, LD Capital and ADVISUM. This funding allowed Lition to begin working on building its public-private deletable blockchain—and divert more attention to marketing.

Marketing and community building

On the marketing front, Lition has done some interesting things through press exposure, PR segmentation, social media, and influencer marketing. Here’s an inside look as to how Lition organized their marketing activities: 

  • News stories: The company generated over 100 stories about Lition, from publications like Coindesk, The Huffington Post and Entrepreneur. Take the Entrepreneur story for instance, the team leveraged an energy renewable infographic with statistics to gain media exposure. 
  • PR segmentation: According to Dr. Ha, Lition broke down their PR strategy into tiers (ie. tier 1, 2, 3 by grouping publications), which was then further segmented by geography, such as Asia (Japan, Korea, Vietnam, China), Europe (Germany as it is Lition’s core market), Russia and America.  
  • Social media: Built communities on Twitter, AMAs in Telegram groups and YouTube. To reach Asian markets, Lition focused heavily on KakaoTalk (South Korea) and WeChat (China).
  • Key opinion leaders: The team developed relationships with key opinion leaders (KOLs) like Thomas Heilmann, who is a senator and member of parliament for Chancellor Angela Merkel, and crypto influencers like Ivan on Tech.
  • Advisors: The team attracted high-profile advisors such as Dr. Jürgen Müller (Board Member of Technology at SAP), Yan Feng Chen (Co-founder of LONGHASH), Kelly Ford (former CMO at PayPal Germany) and Sang-Seop Lee (Korea Blockchain Association).

Lition testnet launches with a $22 million syndicated loan

Prior to the public sale, in February 2019 Lition launched their testnet and worked with VR bank (Germany’s 3rd largest bank) on a pilot project transacting a $22 million syndicated loan between two VR bank cooperatives.

Shortly after other pilot tests on the Lition testnet, Lition went on to announce their public sale. Lition raised $2,000,000 in under 19 minutes, selling out. Clocking total funding to date at $4,900,000. Since then, the company has listed its token on 7 different cryptocurrency exchanges, including IDEX and Bibox. 

Going forward

The team at Lition are focussed on improving their blockchain so that it can be adopted in a commercial setting. Dr. Lohwasser says that reaching “production-grade” is a challenge. This is largely due to there being few examples of blockchain applications used outside of cryptocurrency trading at scale, especially in the enterprise space. 

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