Seedstarsworld just hosted its ‘start-up competition’ event in Shanghai and they have a winner: BitNexo, a Bitcoin-backed cross border commerce payment system between China and Latin America. Darren Camas, Co-Founder & CEO of Bitnexo, kindly answered our questions to let us discover Bitnexo more in-depth.
Market, Target, Usage
1) Nicolas: Since you propose easy money transfer service between China and Latin America, can you give us concrete examples of use case for your service? What are the typical profiles of your users (‘persona’)? Are they recurrent? What is the flow represented by money exchanges between China and Latin America? Is it growing? For example, Mobile money transfers to Africa are expected to hit $33 billion this year.
Darren: BitNexo providers services geared towards SMBs who engage in cross border commerce. As we´re currently working between China and Latin America this could be a small electronics exporter from China selling goods to Mexico, or a boutique Chilean winery importing to Shanghai. One of our first customers is an automotive dealer who bought a tire recycling plant in China and needs to pay expenses in RMB, and sends multiple transfers every month. We´re currently saving him about 40% in fees from what he was paying with wires.
Each year there is more than $26 billion in SMB commerce between China and Latin America. A rising consumer class is driving import growth in China. A great example of this is a recent $70 million investment in FruitDay, which lets Chinese consumers order fresh fruit online direct to their homes. Foreign imports are often associated with quality, and I expect we will see an influx of new Latin American products into mainland China in the coming years.
Regarding marketing & sales operations, our customers are B2B, and many are expats who have tight knit communities, which means we´ve done a lot of networking with the local Latin American community in Shanghai. Money involves high levels of trust so this model works through personal relationships as well as word of mouth.
Another distribution channel is through our partnerships with trade organizations. One such organization would be Wines of Chile, a non-profit which focuses on promoting Chilean wineries abroad.
Nicolas: Money transfer start-ups are soaring, how do you differentiate from Worldremit or TransfertWise?
Darren: We´re all FinTech solving transfer issues, however our models are very different. First, we´re focusing on B2B as opposed to C2C which means larger sizes of average transactions. We´re also a cryptocurrency solution, which means we´re using the most advanced payment technology that exists today. Transactions are backed by a fully fungible digital asset, which is quite different from solutions that rely on debt ledgers, peer to peer transfers, or credit card networks.
Darren: We use Bitcoin as our backend system to facilitate payments. The underlying technology is both fast and cheap, so we pass these savings on to our customers. There are a lot of other alternative cryptocurrencies and digital currencies out there and there are some amazing innovations coming out of this space. Bitcoin currently has first mover´s advantage and network effect in the cryptocurrency space, but I´ve met some people taking the groundwork laid in Bitcoin and coming up with a whole range of innovations. I´m excited to see what the future holds.
Nicolas: Tell us about your team, who you are, what are your skills, how did you meet, and what is your mantra? What would you describe as a success for your venture?
Darren: I met my co-founders at a local Bitcoin meetup in Santiago, Chile. Both the CTO and myself were alumni of Start-up Chile, and our CCO was a frequent speaker there. I met our Head of Biz Dev the year before through a recruitment project, so I already knew her professional profile. We´re international, hailing from China, the US, Spain, and Chile. I would characterize our team as ¨financial hippies¨. We don´t come from traditional molds or backgrounds which allows us to approach problems with fresh perspectives. I think success for BitNexo is helping SMBs scale their own businesses by paying lower fees, and getting their goods faster.
Nicolas would also like to invite BitNexo to share its service idea on Imagine with Orange where we are currently running a mobile money challenge: there is a possibility to win an innovation workshop in Paris with Orange experts.