Blockpit CEO: Is SaaS Really Dying in the Age of AI? | Let's Talk About Tech #68

Speaker A: Around 3 to 5% of crypto investors actually do the tax declaration, which is 3 to 5%. This is like, in highly regulated countries like Austria, Germany and so on, um, globally. And there's been a study just released a few months ago. We're around like 1.5%. We are quite well positioned to catch this new wave of people that are woken up and finally realized, oh, now it's getting serious. We are going to see a huge wave of transparency for crypto assets. Now, it was pseudonymous, right? You had your wallet address and, uh, nobody knew who's behind the wallet address. And this was going to change next year. There's almost no business is not affected by, uh, the progress of AI. You have to adapt.

Speaker B: Hot Topic, I would say at the moment. Saspocalypse, what would you say is SaaS actually dying?

Speaker A: Let's talk about Tech.

Speaker B: Hello and welcome to let's Talk About Tech, provided to you by Venena Capital, the entrepreneurial partner for venture capital and private equity. Today with me is actually the first guest that is joining us for the second time, CEO of Blockbit. Welcome, Florian.

Speaker A: Thank you for having me again.

Speaker B: Of course. It's very nice to have you again. So, first of all, I want to congratulate you on the collaboration with bybit. Very nice. I've seen this in the news.

Speaker A: Uh, been a while in the making. Now it's officially out.

Speaker B: Very great, very nice. Uh, so it has been over two years, Florent, since you have joined us. And, and, uh, a lot of things have happened. Um, I mean, people say SaaS is dying, AI agents are overtaking them or replacing them, and crypto is becoming more regulated than ever before. But first of all, I mean, I want to, um, join and dive into this topic a little bit more general. So if you look at the last few months regarding digital assets, how is the market, how has it developed and what is the current state?

Speaker A: So I would say it's all about regulation. Um, it's been for a while, not just in the past few months, but it's still the biggest topic. Um, crypto prices are kind of stagnant. It's not too interesting. So we're definitely not in a bull market. Not sure if we're in a bear market. By definition we are. Um, but a lot of things are happening. Um, and we are really coming into the, uh, space of institutions, uh, taking over a huge part of the market, which maybe is slowing down things a little bit. Uh, it's not this startup wild, uh, west anymore, but which is A good thing I think for sustainability. And yeah it's all about stable uh, coins, regulation, tokenization, things that we've been talking about five, six years ago are now really here and uh, that's a great development I would say A lot of things coming um, in the next months years. A lot of opportunities for Europe as well in.

Speaker B: Mhm.

Speaker A: Regards to digital assets. So overall um, I as a player in this space I'm um, quite positive um, I think for the retail investor right now it's a little bit boring.

Speaker B: Mhm. Yeah. Okay, that makes sense. Very, very interesting institutional developments as you said. I mean to be a little bit provocative in a sense. Uh, without gains there are no taxes. So at the moment how um, is the current market environment? Um shaping block pit I would say or impacting flopped it.

Speaker A: So there were a lot of gains last year and ah, we were always a little bit delayed. Right. So um, right now it's tech season for 2025. Uh yeah, 2025 coming up. Um, so not really feeling the effect too much but obviously what we do feel is the, the sentiment. Like in a bull market I'm checking my portfolio every 10 minutes. Yeah, I didn't do that for like the last few days. Um so that's something that we just see. People are not uh, doing as much in the sphere. Um but from a regulatory um it's always late and slow. So we are not that much impacted by this. Um even if there are no gains, there are losses to offsets to carry forward. There is tax optimization to be done a lot if you have some positions that are at a loss but you need to the know how right over your positions to actually be able to optimize. So there's always something to do. Yeah. And there are still opportunities to make gains um, especially in the, in the like yield farming. In the bear market it's super interesting to also go for 5 to 10% of yield. MHM which in a bull market is like way too low. But in a bear market it's super interesting. And those um, basically interest payments, they are taxable upon receival in most jurisdictions. M. So even if you maybe are not in a profit in terms of like the value of your assets, you might still get some yield that's taxable. So there's always something new for us.

Speaker B: Okay, yeah, good, good to hear. I mean um, so let's, let's dive into uh, the brand or hot topic I would say um, at the moment SaaS apocalypse. I mean you as the CEO of a SaaS startup probably know about that. I mean I recently heard in a podcast called 20VC podcast, uh, about the Replit CEO Amjad Massad who basically justified that. And I mean it's, it's kind of biased. I mean he's a vibe like, like the CEO of a vibe coding platform. But it's still interesting um, to hear this take. I would say in this software space, what would you say is SaaS actually dying?

Speaker A: It's not dying. I mean SaaS is software as a service, right? So I would say it's evolving. I mean AI is software. So even if ah, a lot of AI agents are not taking over some certain tasks, um, it's still software as a service. So I wouldn't say SaaS is dying, it's changing. Um, and obviously we feel that and I guess everybody feels that there is almost no business that's not affected by the progress of AI. AI. So you have to adapt. Um, and if you're running a SaaS business, um, and continue to run it like you did in the last years, you will likely die.

Speaker B: Mhm. Okay, so what exactly are you then adapting in this new environment?

Speaker A: So there are multiple things that you need to adapt. There's internal processes like everything that you can enhance with AI. Um, not 100% outsourced to AI. I think we're not there yet, um, will just give you an efficiency boost, um, that's undeniable. Um, and we're not talking about like 10%, 20% efficiency, but like 200, 300% efficiency. So if you're using AI in your daily workflows in basically everywhere, um, you can improve your efficiency. You'll be faster than your competitor, which is important. So speed needs to be thought new. Um, but then also uh, make your products uh, agentic, so to say like usable for AI.

Speaker B: Mhm.

Speaker A: Um, right now I think it's still a little bit of a bubble in the niche. So obviously I'm also running AI agents, uh, we're all using some form of AI chatgpt and so on, but that AI agents are taking over everything that I do and are ah, using software. For me it's still a little bit in the future, but you need to get ready for this. So uh, it's not just the login with Google, um, and use it as a user, but mhm. Potentially also let AI agents access your software and your product in a way that they want to.

Speaker B: This was actually a follow up question of mine. I mean crypto taxation is a fairly complex topic. I mean it relies heavily on Trust and also regional uh, tax domain knowledge, I mean also auditability and things like that. So do you expect in the future that there will be AI agents who access your, your platform in a way then? Or do you think that agents actually can replace um, um, um, this service? Because um, if you just build yourself an agent, um, which actually can, I don't know, with API connections or something like that, uh, connect with certain features.

Speaker A: So on the first point, yes, definitely. So there is going to be agents that will try to access software like ours. So mhm, I talk to agents and say like this is my account at this exchange and this is my wallet, please make my tax declaration. Then the agent goes and looks for some solution uh, that calculates taxes, um, and if you have like an endpoint that they can use then you probably will use that. M But still an edge case at the moment. Um, there's still a lot of things that AI just can't do. Right? You would have to give them access to your exchange accounts, you will give them access to your wallets and all that stuff. So do you really want to do that? M and on the second part like completely replacing, um, I think that's not possible just from a tech standpoint. You need change in regulation allowing this. So for us super important is to be transparent, uh, in our process documentation for example. So every step of our algorithms needs to be lay open to the government if they ask for tax audits. And as soon as there's like an AI which is a black box like input output, don't really know what it is doing and probably nobody can tell you, um, that's an issue from a compliance perspective. Um and so I think uh, especially in the regtech space, um, yes, AI has an impact but that it's possible to take it over completely. Um, it's not just a question about tech, it's also a question about uh, transparency, regulation and the processes needed uh, then for declaration and all that stuff, auditing. Um, but yeah, at some point probably will be there, um, not in the near future future I think.

Speaker B: Yeah, like as I hear that from you, it sounds like it's like a really complex topic where it's not like when you read the news, you know, you feel like okay, AI ah is changing everything like tomorrow. But I mean as, as I understand it now, as you were saying, I mean regulation compliance and trust, actually this is also like a topic are playing a huge influence here.

Speaker A: So of course you can build software way faster and copy software. Um, and that's the thing and you need to be aware of this. But as I said, trust distribution, uh, um, the partnerships, the interactions that you've built up in the last years, it's not something you can just take over. Uh, closing a government deal takes one to two years. Um, you can really um, change that with AI, right. You're not going to be faster because they're not going to change their processes. That there are options where AI makes a huge difference but in the overall package, um, we are using AI a lot and you can't just 100% rely on AI. You still need humans or you're gonna have a lot of mistakes. I'm wipe coding uh, for a few months now myself. It's a joke in the company like oh, now the CEO started coding again. But uh, it's impressive. It's crazy what you can do without actual know how. Um, but I'm running into limitations from in terms of like performance, um, m. Some mistakes, uh, that the AI makes and then you have to look for the error.

Speaker B: Yeah.

Speaker A: If you don't understand your own code, that's super complex.

Speaker B: Yeah, that's actually a very good point. It's all about I think defining the input and then validating the output as you, as you said, basically. Uh, but regulation, uh, uh, that's a very good point that you've mentioned. I mean this year we had very interesting developments when it comes to that. I mean international standards like CARV or DAC 8 or also the US Genius Act. So to break it down, what actually is that? Who is it impacting and what can we expect there?

Speaker A: So there are two major topics. One is actually like taxation and tax enforcement and the other one is I would say everything about stablecoins is like the second big topic that we are seeing this year. Um, the first one, carve DSE8 that you mentioned. So carve is the crypto Asset Reporting Framework, it's the Global directive and then Duck8 is the implementation in the European Union of CARF. So CARF is uh, affecting 70 jurisdictions and then the 27 jurisdictions of European Union, um, they implemented via the Directive of administrative cooperation, 8th amendment. So just to get those two uh, acronyms out of the way. Um, but what does it mean? It means that crypto Asset service providers need uh, to report their users KYC data, so personalized data, my name, address, tax identification number and stuff like this, but also my transaction data, um, to the tax authorities in those 70 countries. Um, so basically I'm taxable in Austria, um, but if I trade on an exchange that is licensed in Ireland. Then this exchange will need to report my data as an Austrian customer to the Irish authorities and they will then share that information with the Austrian financial authorities. And so we are going to see like a huge uh, wave of transparency for crypto assets. Mhm. Now it was pseudonymous, right? You had your wallet address and nobody knew who's behind the wallet address and you had your exchange account but that was a centralized database. So as long as the exchange didn't tell the authorities that you've been trading there.

Speaker B: Hm.

Speaker A: Nobody knew.

Speaker B: Mhm.

Speaker A: And this was going to change next year. So they're going to start reporting for this year's transaction end users, uh, in May next year. So next year suddenly these tax authorities are going to have an open book of who has an account, who has been trading. Um, and doesn't really matter where the exchange is located or licensed. Even like island states, like the Seychelles, Cayman Islands, they are all part of this agreement. So that's a huge one, especially for us of course, tax compliance, rates going up, it's good for the business. And then the second one, uh, is basically everything regarding stablecoins, which is a huge topic, um, not just in the US but also in Europe, um, where I think we, we need to act, we need a Euro stablecoin, um, and we do have the framework now with Mica as well, um, to get those started, there are some banking organizations that are working on this. So yeah, in regards on how that develops, um, maybe not this year, uh, but also next year we're going to see huge steps.

Speaker B: Mhm. Okay. These are huge developments in the regulation space and I mean it will increase regulatory clarity. I mean also like transparency as you said. But does that actually simplify things for investors or is it like actually now a more complex step on the way, you know, to track transactions, even more precise and stuff.

Speaker A: It doesn't really simplify things. Um, I think um, it makes things clearer and makes it possible for especially institutions to enter the space because as long as it was not clear, it's hard for them to do risk assessment, risk management, uh, and that stuff. Um, I think it's going to make it a little bit harder perceptively for the investor because they're now faced with what they have been doing, should have been doing all along, like declaring their taxes, monitoring their transactions, uh, so it doesn't really change their uh, duty but it makes it more aware. So it might uh, seem more complex for investors, but actually you should have been doing it all along. Um, so it's not Something that regulation adds in terms of complexity but finally enforces.

Speaker B: Yeah, and I mean you as a crypto taxation platform, BlockFit and or portfolio tracking platform. How will that reshape your position in the market then?

Speaker A: So we think around 3 to 5% of crypto investors actually do the tax declaration, um, which is 3 to 5%. And this is like, in highly regulated countries like Austria, Germany and so on, um, so globally. And there's been a study just released a few months ago. Um, we're around like 1.5%. Um, so the cake is still quite small. Um, so if enforcement is coming, um, we just think, uh, the overall cake will grow. And our piece of the cake, of course, as well. We are quite well positioned in Europe, um, to catch every new person that suddenly realizes, oh, I have to do something about my taxation, and looks for a solution. Then most of them just find us. So we are quite well positioned, um, to catch this new wave of, uh, people that, uh, are woken up, um, and finally realized, oh, now it's getting serious. So for us, it's, um, I wouldn't say like a waiting game, but, uh, more like an expectation of, uh, this final enforcement. That was a little bit the idea when we found it almost nine years ago. We were like, oh, this is going to be big. Right. Enforcement is going to come. You can't. Tax fraud with crypto. And it took way longer than we expected, but now it's here and we're looking forward to, um, collect, um, yeah, and help those people.

Speaker B: Right, yeah, of course, of course, of course. I mean, in that sense, with everything we talked about right now, what are the next steps for Blockpit in the next months?

Speaker A: So we just increased, uh, our country coverage, um, from 10 jurisdictions to 36 jurisdictions with a strong focus on Europe, but a few overseas countries, uh, markets that are big enough, like Canada, Australia, the US and uh, yeah, you just mentioned it. We closed a big deal with Bybit. Um, so we are also looking a lot for distribution channels. Uh, the topic of taxation is always something that's been pushed off until the very last, uh, moment. Um, but we are now seeing proactive inbound interest from financial service providers, from tax advisors to have a solution to deal with the topic. So for us, it's really like, um, capturing those, capturing every multiplier that we can, uh, until the point that enforcement then hits.

Speaker B: Yeah, okay. I mean, that sounds actually very amazing. I mean, the need is obviously there and, uh, we will follow your journey throughout. Um, very nice to have you, Florian. Thank you so much.

Speaker A: Thank you.

Speaker B: And thank, uh, you for tuning in, guys. Um, hopefully you've liked and subscribed already, but if not, then I advise you to. So thank you for joining and, uh, join us for the next time.

Speaker A: Let's talk about, Let's talk about tech, baby. Let's talk about your ip. Let's talk about still, baby. Let's talk about vc.