Business

The Swiss banking revolution and the family offices backing change

Seba Bank, led by Guido Muehler, is the latest to illustrate the digital disruption currently sweeping across the Swiss banking sector. It’s also backed by family offices. 

The quality of Seba’s hyper-connected backers in its January $110 million fundraising – taking the total to $245 million over three rounds – is particularly eye-catching. 

They included Alameda Research, a quantitative cryptocurrency trader, founded by Sam Bankman-Fried, also the founder of crypto exchange platform FTX Trading. 

Seen as the richest trader in crypto – worth $22 billion, according to Forbes – he was profiled in Family Capital last October. Bankman-Fried has just launched a $2 billion fund led by Amy Wu of $10 billion investor Lightspeed Ventures to invest in crypto ventures.

Seba was the first custodian bank to win a license from the Swiss regulator to look after digital assets

Angel investor Jan-Maarten Mulder, founder of Amsterdam-based investment group Summer Capital, has also backed Seba. He was global head of commodities at ABN AMRO Bank between 2013 and 2016, where he developed a lending business for the sector. Summer is an investor in a range of ventures in quantum computing, fintech and data.

Another backer is Ordway Selections, a Zug-based family office for Jonathan Ordway Fackelmayer. Fackelmayer is also the managing partner at Ordway Capital. His family office invests in blockchain, digital assets, health, food and agricultural technology. He is a partner at Blockchain Coinvestors, a successful investment group. 

Ordway Selections is close to VC investor Altive, a Hong Kong platform, another Seba backer, led by former executives at Macquarie Asset Management, counting Carlyle Group and Alibaba Entrepreneurs Fund as partners.  

The Swiss private banking establishment is represented by Julius Baer, which has lifted its stake in Seba while developing cooperation deals with it. 

Seba’s key adviser, and an investor, is Toronto-based DeFI Technologies, a quasi-investment bank that led his fundraising. Diana Biggs, a crypto thought-leader, was once global head of innovation at HSBC’s private bank. She runs strategy at DeFI which bought Valour, a crypto fund provider she developed in 2021. 

Seba is led by CEO Guido Buehler who spent his early career in private banking and corporate finance. He worked at UBS between 2001 and 2012 before creating B&B Wealth Solutions which runs a multi-family office. His team has extensive banking and engineering experience, capable of handling the switch to the digital banking world. In 2021 it advised the French central bank on how the country could use blockchain to manage a digital currency.

Seba was the first custodian bank to win a license from the Swiss regulator to look after digital assets. It plans to expand in the Middle East and Asia, where fintech expert Sam Lin, ex-Credit Suisse was appointed regional CEO in July.  It claimed a first in December by creating a security token facilitating the ownership of physical gold. 

Seba is continuing to develop its crypto platform convinced that institutions will continue to increase their exposure.

Buehler is relaxed on prospects for bitcoin, despite its recent decline to $41,800, saying that Seba’s models suggest a price of $50,000 to $75,000.

Seba’s last fundraising marks the latest phase in Switzerland’s private banking renaissance, as newcomers plant their flags in the alpine foothills.  

The pain inflicted on the sector by the 2008 credit crisis and an international crackdown on bank secrecy is steadily passing into memory. A new generation of banks are keen to cater for demand for crypto opportunities from family offices based in Switzerland.

Digital newcomers include Sygnum Bank which has just rolled out a custody and trading solution for DeFi assets. Zurich-based Neon is out to compete with traditional banks which, it believes, are laggards: it has issued digital tokens through crowdfunding to raise money.  

The establishment is considering ways to compete. As well as the Seba association, Julius Baer has gone into partnership with Wecan Comply, which operates a blockchain compliance platform, to boost communication with external asset managers.

Christian Skaanild, managing partner at private bank Bordier & Cie, founded in 1844, has signed a joint venture with Sygnum.  He has introduced private equity expertise to his bank, which, last December, announced a new partnership with private equity fintech investor Moonfare. 

UBS is developing a digital business with the help of a joint venture called UBS Next with Anthemis, founded by fintech pioneer Sean Park. UBS is creating a US digital bank, although its Swiss analysts are more vocal than most in warning that rising interest rates are bad for crypto.

Credit Suisse was one of the first to recognise the urgency when it launched CSX a couple of years ago as an answer to the DeFi challenge.

Basellandschaftliche Kantonalbank has launched a digital banking service with venture fund Bally Capital Partners called Radicant. The new service is expected to go live in the second half of 2022 and provide advisory services and sustainable solutions. 

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