Every day we bring you fresh insights about Fintech from an elite group of Authors who are just like you – senior executives, entrepreneurs and investors on the frontlines of the global Fintech & Crypto revolution. Once a week Daily Fintech’s Editor summarises these posts so that busy people can get a peek at what you will get by reading the whole article.
Ilias Louis Hatzis is the Founder at Mercato Blockchain Corporation AG and Weekly Columnist at Daily Fintech
Tokenization has the power to impact the entire VC industry, from the way venture capital is raised, to the way it is invested in startups and projects. In an interview by David Sacks, the former PayPal COO, said: “I think Limited Partner interests are likely to be tokenized, along with most other illiquid assets. Eventually, illiquidity will be a competitive disadvantage in fundraising that only the top firms will be able to justify.” To further elaborate on David’s thought, tokenized funds will reshape the dynamics of how private equity and venture capital raise money and bring greater transparency that drives innovation and growth.
Editor Note. Early stage fundraising/investing via tokenisation is the killer app for Ethereum. Whether through ICO or IEO or STO, this is a huge broken market that can be fixed via tokenization.
Tuesday, Efi Pylarinou @efipm our Swiss-based Fintech Adviser wrote The Complex Post-Trade world of Securities and its API transformation
Internal communication and client communication in Securities Services remains a nightmare. This sector is actually a great example of batch processing, lack of cross border interoperability and standardization.
In July, BCG consulting and SWIFT published a white paper, looking at APIs in the Security Services industry. Adoption is low but awareness amongst asset managers grew from ~46% to ~72% (2018 data).
In late September, BNP Paribas Securities Services announced the release of 22 APIs for its client asset managers. They have worked with SWIFT so that this set of APIs are interoperable across different platforms.
Editor Note. While media is focused on the battle between SWiFT and Ripple XRP, this article explains a different way that transactions move to real time. Real time will inevitably come to securities payments but not necessarily via DLT.
Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia.
Back in 1968, Dr Edward Altman was responsible for a major innovation in the field of credit risk analysis for corporate businesses – the Altman Z-score. While it transformed risk assessment for this sector, for over 70 years it failed to cross the turnover divide, in any meaningful way, and enter the world of SME finance. This is now changing, thanks to Altman himself, and the fintech revolution currently taking place.
Editor Note. Credit rating score for SME is one of those big opportunities that are very difficult to crack. If anybody can do it, Dr Edward Altman is probably the person. A credit rating score for SME will be a platform for further innovation.
Thursday, Patrick Kelahan @insuranceeleph1 our US-based Insurtech expert, wrote ‘Growth’ valuations for startups- losing its allure?
Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.
There has built during the past few years an InsurTech chase to ‘unicorn’ status not uniformly based on NPV, but on growth. Fellow Daily Fintech columnist, Ilias Louis Hatzis, wrote well this week on “Tokenized Venture Capital” and VCs’ chase for investment valuation lightning in a bottle. However, in that pursuit and as the growth value method broadens in use adverse indicators may be upon us.
Editor Note. Pat points to Insuretech ventures where the valuation is not based on operational and financial logic. Public market short sellers apply market discipline to crazy valuations; there is nothing like that in private markets.
Friday, Arunkumar Krishnakumar @karunk our UK-based Fintech investor, wrote Venture Capital in Europe peaks, China falls as investors shun IPOs
KPMG released their pulse report on global venture capital trends for Q3 2019 yesterday. There were some key highlights from the report worth discussing about. The most pleasantly surprising trend is the increase in VC investments in Europe.
Despite Brexit and Germany moving towards a recession, venture and scale up investments in Europe hit a record quarter in Q3 2019. On a global note, Asia has seen sustained slowdown in VC deals, largely dampened by action from China.
Editor Note. In the late stage of a macro cycle it makes more sense to do early stage deals (which will ripen when the economy recovers) vs late stage which is very dependent on investor sentiment. The data says the opposite is happening. This is one more example of VC becoming Wall Street West ie more about finance than innovation.