An Aussie blockchain startup focused on solving issues inherent in the adult industry has raised $4.5 million in a token pre-sale and is gearing up for a further $24 million raise in March.
The startup, intimate, was launched last year by founding trio Reuben Coppa, Leah Callon-Butler and Nathan Smale, who formed the idea of a cryptocurrency and blockchain platform to not only make payments in the adult industry easier but also introduce a verifiable and immutable trust and reputation system.
As such, intimate was born from a fusion of two industries commonly eschewed by the banks: cryptocurrency and sex work.
Four years ago Coppa established some of Australia’s first Bitcoin ATMs through his company EI8.HT, which also operated as a blockchain consultancy firm. But a lack of interest in cryptocurrency at the time lead Coppa to look into other businesses, one of which was Rendevu, an on-demand platform for adult services providers such as escorts.
While both of Coppa’s businesses were perfectly legal, standard business banking relationships were closed to him on both fronts. It was at this point he began to realise the decentralised nature of cryptocurrency could solve some of the issues in the sex industry.
But still, the interest for cryptocurrency wasn’t there, until around six months ago. Speaking to StartupSmart, intimate co-founder Nathan Smale says that was the catalyst needed to be to “use the tech we’d known about for five years to solve the problem that had been evident for the last two”.
Initmate’s use case goes beyond the Bitcoin-esque payment model, with Smale explaining while payments and remuneration has long been an issue in the sex industry, worker safety and customer anonymity have also been key concerns.
“We’ve spoken to people who work in the industry who told us there was a huge disconnect between the safety of the workers and the privacy of the consumers,” he says.
“And it’s been a trade-off over the years, where consumer privacy always beats worker safety.”
So while the payments model will be intimate’s base level, the platform will also implement a reputation system for clients, allowing them to stay anonymous while assuring workers they are trusted and verified, and implementing a “typical reviews system” showing things such as if they behaved respectfully.
Marketing an issue for sex-focused businesses
The intimate team has already banked $4.5 million of pre-sale contributions from interested parties across the world and will kick off a public token sale later this month, seeking another $24.5 million from investors.
This not insignificant amount is due to the team’s efforts to hopefully change a number of ingrained practices in the sex industry; if successful, they hope to use the funds and associated coverage to encourage major platforms in the space and build intimate’s ITM token as a key payment system.
So far the company has partnerships with a number of different adult-focused companies, including a virtual reality pornography company, a vibrator manufacturing company and a provider of Japanese ‘love hotels’.
“We have the widest definition of ‘adult’, from escorting to livecamming to pornography and even dating apps. We’re looking to be used anywhere where there’s one-to-one interaction and people want to trust in the other party,” Smale says.
But operating in the adult space has subjected intimate to similar levels of unconscious or moral bias lumped upon other operators in the space. Co-founder Leah Callon-Butler tells StartupSmart that despite taking a very sex-positive and serious approach, the startup has still struggled when working with clients and trying to get their name out there.
“Yes, it’s harder to market because the clients we’re dealing with who want to transact with crypto come up against problems like this all the time. The vibrator manufacturing company, Emojibator, can’t boost ads on Facebook because they contain sexual content,” she says.
“We also work with a Japanese love hotel group that can’t advertise in places like Booking.com. The problem exists everywhere in the industry because of the nature of the content.”
Knowing this, the team consciously took a different approach to their marketing materials, running contrary to other adult-focused platforms in the blockchain space. Callon-Butler says none of the company’s materials contain anything explicit, and the team consciously talks about things from a very sex-positive perspective.
“While this is a business opportunity like any other, we’re not into this because ‘sex is cool’. We’re looking at how under-served the industry is,” she says.
“Take away the adult label and any entrepreneur wouldn’t believe no one’s capitalising on the space. But as soon as you slap the ‘adult’ label on it, they back off.”
Intimate team is currently finishing a token ‘roadshow’ across the world and says it is seeing interest from a number of “large crypto funds” ahead of its token sale next month.