A Small Step for a Startup. A Giant Leap for the Biochip?
It’s rare to see the stuff of science fiction take off in the real world, but our story on “biochipping” in the February 2019 issue of Fortune magazine might be one of those occasions.
In November, I traveled to Sweden’s second city Gothenburg and watched people line up to have Biohax International founder Jowan Österlund inject tiny microchips into their hands. The chips, about the size of a grain of rice, allows people to unlock their front doors or gym lockers, operate office printers, pay for lunch, or validate train tickets, all with a simple wave of their hands. Goodbye keys and credit cards, and no need to remember endless passwords. That made me wonder: Is this just a whim by a few thousand tech lovers, while most of us regard biochips as creepy, sci-fi technology? Or it is the start of something huge?
Monday’s news cycle brought a clue that biochipping is poised for significant growth. Österlund announced that Biohax had established a strategic partnership with ICON Capital Reserve SA, a $ 300 million software company, founded in 2013, that trades in gold on the blockchain for high-net-worth private clients around the world.
Under the arrangement, ICON acquires a 5% stake in Biohax in exchange for Österlund receiving “some very valuable shares” in ICON, according to Bradley Hall, ICON’s founder and chief executive. (In an interview with Fortune, Hall declined to specify exactly how much.) ICON will also also begin using Biohax technology to quickly validate individuals’ identities as they make huge trades. “They can provide immutable ID,” Hall says of Biohax. “If you have a chip in your arm, you cannot challenge that. And when you have immutable ID, all of a sudden you have the ability to move value around the world, with transactions that happen within seconds.”
Hall says he decided to partner with Österlund after a 90-minute phone call with him made it clear that each had something the other badly needed. For Hall, it was Biohax’s technology. For 38-year-old Österlund—who once ran a piercing parlor and has minimal revenues for his tiny startup—ICON brings with it a roster of global clients. “I said, ‘Hey man, stick in there, you are in quite early,’” Hall says. The two plan to discuss specifics of the partnership in a meeting in Malta on Friday.
Partnering with a more conservative company like ICON will likely mark a huge shift in style for Biohax, which operates out of shared office space in the small Swedish coastal city of Hilsenborg. When Fortune followed founder Österlund around Sweden in November, he was injecting new clients himself from a tattoo parlor down a side street in Gothenburg.
But appealing to the masses, not to mention financial institutions, will require a different approach. It could even lead to a change of name for Biohax, which Hall believes is “cool for Gen Y” but maybe not for older, wealthier clients who might object to the hacking reference. Hall says he aims to counsel Österlund on how to position the company as it begins courting more corporate clients—something ICON’s investment will likely accelerate, he says.
“We like to think about it as a massive injection of credibility for him, from a team with extensive global experience,” Hall says, adding that he plans to give “subtle guidance” to Österlund about positioning his startup for huge growth. “It could be ubiquitous,” Hall says. By then Biohax might have staff around the globe, and perhaps permanent office space.