What ideas are Hong Kong fintechs pitching?
We rank the fintech demos recently hosted by Accenture, from DeFi treasuries to movie-finance NFTs.
This week, Accenture hosted a fintech demo day in Hong Kong. Usually the judges are supposed to rate the pitches, but this event was…nicer? Well, DigFin was there and we’re going to be the hard-nosed decider.
This is a fintech out of New Zealand that works with retail banks to embed sustainability measurement tools for apps. The argument goes that consumers want to see their carbon footprint along with tips or incentives to reduce it.
The company has raised $11 million of a $20 million ask. It is gaining traction with big banks in seven markets, including NatWest in the UK. Proceeds will go to supporting a new product for small businesses, which find it difficult to figure out their carbon footprint.
We profiled Cogo earlier this year, so you can learn all about it.
An SME version is more likely to work because a business has genuine need to measure their carbon output – because their anchor corporate customers will start asking more questions about this. Cogo suggests it will also make it easier for SMEs to obtain credit, but this is an untested proposition.
But we’re skeptical about voluntary pickup: the app requires people or SMEs to input a lot of information for intangible rewards.
It’s an A.I. coach (aka, a robo-advisor) for investing in stocks. Apparently too many punters lost money this year because they didn’t stick to a regimen of sensible investment steps. Or they aren’t rich enough to have expensive relationship managers provide them with stock tips.
Or – hear us out – maybe it’s just a bad year to be in stocks?
Asklora’s differentiator is “personalization”, rather than focusing on portfolio performance or expectations of returns. Not sure if this means people would rather be understood than rich, because money doesn’t bring us happiness.
Along with A.I. and quant finance, Asklora adds personality scores. Aha! This is called psychometrics. DigFin wrote the most comprehensive feature on the field you will ever find.
Invented in the US, it is now essentially illegal there because of a propensity to attribute certain return outcomes with one’s race or other natural characteristics. This doesn’t make it bad or useless, but it does suggest caution.
Psychometrics were first developed as credit-scoring tools for banks, and at its best, it broadens access for people who probably deserve a loan. Applying this to an app for stock trading? In the era of Gamestop? Not sure.
Asklora was developed in the US and the fintech is using Hong Kong as its test center, looking to build a small but engaged consumer base and seeing if it catches on before attempting to launch in other Asian markets.
Disclosure: the presenter’s style was a little jumpy and hard to follow, which colors our understanding of Liquid. That said, Liquid seems like it’s in an interesting space, providing digital verifiable credentials so that a giant company can confirm all the small fry in its supply chains. But it’s a competitive arena, so what’s the differentiator?
Liquid says: a permissioned blockchain, so that the anchor multinational can view and own the data of its suppliers, but can’t change it. If the small fry give consent, their data can be used so the company gets KYCed, onboarded and maybe even lent to by the multinational’s banks. Liquid has pilots with DBS and Bank of East Asia.
It is also developing a second use case to validate a company’s employee list, essentially putting the HR director on-chain, so a counterpart knows that whoever is countersigning documents is authorized; or so a bank’s CFO knows who’s signing what. Liquid is piloting this in a PoC with Bank of China (HK).
Some challenges: getting HR to give up the list of employees. Getting all of a bank’s SME clients to provide consent. Getting banks to pay the annual SaaS fees. Getting banks to integrate Liquid into their existing anti-fraud detection systems.
The PoCs are supposed to work out the kinks. Liquid is asking for a $1m raise.
Kinda sorta fintech: a platform to crowdsource funding for movies, using blockchain and an NFT marketplace to jazz up excitement. Kickstarter meets Michael Ovitz who appears in the metaverse dressed like a bored ape.
Or, as Lumiere puts it, “the metamarket solution for safer entertainment investments”.
Filming movies is generally for people with more money than sense, but the glam is sometimes worth it, especially if a movie does well. At the same time, most producers struggle to finance their projects. So: a digital marketplace. Lumiere seeks to generate revenues before the firm is produced, by using NFTs and metaversy-type environments to develop a coterie of enthusiasts.
In theory if the movie starts to do well, the value of the token rises. And then investors can decide to trade their token, creating liquidity, as opposed to merely being passive funders on Kickstarter who get a T-shirt at the end.
The Lumiere team trailed this business model in pre-Covid Hong Kong to finance a movie, Papicha, that got nominated for an Oscar. Part of its success was sourcing people interested in the movie’s environmental themes. It’s now got a small pipeline and is looking to scale. Animoca Brands and Rolling Stone are among its backers.
The team’s marketing material also features “Block Kong”, the bestselling book (?) co-written by DigFin’s Jame DiBiasio, which included a chapter profiling Lumiere founder Pascal Poujol. So we’re giving them a rankings bump. Hey, that’s show biz.
1. Altive: ADAM Vault
The most interesting pitch was from Altive, which DigFin profiled for its wealth-management business that gives retail investors access to alternative investments and private companies like SpaceX.
Now the company is pitching ADAM Vault, a decentralized treasury-management system to “reinvent commercial banking”. That’s quite a claim, but a little chutzpah never hurts. What this Vault looks likely to do, though, is provide treasury tools for DAOs.
DAOs, decentralized autonomous organizations, are software-based structures to give blockchain projects some of the skeleton of a corporation, while still enabling tokenholders to have a say in decision-making.
There are a lot of problems with DAOs or with any decentralized system being built, such as DeFi protcols. A biggie: somewhere there must remain a centralized treasury, with the founders or a team of executives given control over it. Worse: many a keyholder has decided to raid the treasury, making this a point of vulnerability.
But these treasury setups are also a pain in the neck, because anything requiring money-in/money-out requires several VIPs to provide their digital signature, and then someone has to write a check. Members aren’t always full time or professionals, and chasing them on Discord is not the most effective way to run a pot of money.
ADAM Vault provides a decentralized team with a way to manage and control a budget, and it gives that budget its own virtual credit card.
The problems here are the problems of crypto. Self-custody is an invitation to mistakes. There’s no insurance in case the assets get lost. There’s no simple remedy to fat-finger messes.
Altive has built its treasury system on a no-code design so it’s meant to be intuitive enough for even a bored ape afficionado to figure out. The vault, and what’s inside, is permanently stored on Ethereum so the assets don’t vanish or just wander around aimlessly if the project collapses (see: Constitutional DAO).
And the budget pools start to give a DAO something like corporate governance.
The Vault can also enable a third-party investment manager to manage the tokens on a non-custodial basis, which means they can manage the token without touching or possessing it. In fact, this is how the Vault began, as a smart contract to handle Altive’s assets without having to rely on a bank or a custodian.
Therefore Altive believes that, while DAOs are the first use case for the Vault, it will expand this product to small businesses lacking a bank account, or to non-incorporated teams like a fan club. And maybe, one day, to actual companies that, for some reason, decide to transition to DAOs. Gotta dream.
Over time the idea is to ensure the Vault can transact across multiple blockchains, which would give it the look and feel of a multi-currency bank account. Is now a good time to ask about regulation? No? Then let’s wrap it up here: this is a niche but interesting idea that could bring some much-needed structure and tooling to the emergent world of DAOs.