Asia Blockchain Review recently spoke to Alex Medana, Co-Founder and CEO of FinFabrik, a financial technology firm that aims to transform financial services by leveraging blockchain and artificial intelligence to achieve greater financial participation. Medana had recently participated in our Unblock Bangkok meetup last month as an expert panelist discussing the Thai blockchain landscape.
In this interview, he shared with ABR his insights into empowering and connecting asset owners and investors through issuance, trading, and market-making, as well as exploring the ways in which fintech (financial technology) is changing our everyday lives.
Asia Blockchain Review: Can you tell us the idea behind the establishment of FinFabrik?
Alex Medana: We started FinFabrik in August 2016 — three guys and a whiteboard with the idea of creating a factory of solutions, businesses, and assets, or the “Fabrik” (German for “factory”), underpinned by an ecosystem, a platform, or the ‘Fabric’. We acquired the technology from another startup to give us a head start with their cloud-based equities retail trading solution.
At the core, we are reinventing capital markets to give investors (end users) access to interesting opportunities.
“Finance for All: Made with FinFabrik” summarizes that idea. To make it easier to understand, I would add that we are part of the drive towards democratizing finance, where anyone can invest one dollar into anything within 5-10 years.
We are 25 passionate professionals of 13 nationalities, and we always look for talent to take us to where we and our clients want to be.
ABR: Can you tell us about the success of the latest seed funding round held in February?
AM: Funding is a lifeline that all startups need before they reach the holy grail of free cashflow — basically when revenues cover costs. Funding always goes into a specific vision, idea or direction. While I can’t be too specific at this stage, you will see how we have applied the funds to grow the team and our product offering.
As of now, we are focused on expanding our tokenization platform that complements our trading and market-making capabilities.
ABR: How does Crosspool work? What has been the client feedback for this service?
AM: Crosspool is a private marketplace where assets meet capital.
Asset owners may deploy their balance sheet and investors may have access to a number of interesting alternative investments. Simply put, issuance is the first step in the chain. We have the ability to issue tokens that represent the ownership of a tangible (financial or otherwise) or intangible asset on a blockchain protocol.
We are focused on delivering value in private markets, particularly in equities and debt. We are following a ‘permissioned’ blockchain setup because trust and privacy are very important to our clients. For this reason, we are a member of R3 and Hyperledger, on which we build our proprietary infrastructure and identity management.
Our clients benefit from the efficiency gains that our technology brings to them as well as broader access (both on the asset and capital sides).
The feedback we constantly get is about the level of sophistication of our platform, how it’s thoroughly designed and built for secondary trading.
ABR: Can you tell us about the latest developments for CryptoFabrik?
AM: CryptoFabrik is a turn-key crypto-trading solution that has become an integral part of our overall platform. But due to the crypto winter last year, the commoditization of trading solutions, resources allocation, and our focus on tokenization, we have decided not to push this product further as a standalone.
ABR: How does QuantFabrik, the market-making solution, empower asset owners and investors?
AM: QuantFabrik has now evolved in a separate entity led by Dr. Yifeng Hou. We have a number of services and solutions (crypto hedge-fund, market making, hedging, etc.) that have been hived off from our CrossPool platform, as we don’t mix different business models and technology. Furthermore, QuantFabrik is our first, regulated activity.
ABR: Can you tell us FinFabrik’s key milestones? What are your long-term goals?
AM: I would be lying if I told you our journey has just been smooth sailing. We tried and failed (e.g. our equities retail trading platform was not a good market fit due mainly to low priced, commoditized, and entrenched competition) and bounced back.
Taking stock of our experiences, I can say we are one of the rare fintechs that has an authentic enterprise-grade modular platform that can cater to different types of customers. We have spent an inordinate amount of time building from the back-end up to be where we are today.
Our long-term goal is to reinvent capital markets from the issuance of an asset all the way down to its inclusion in a portfolio via trading. As I said earlier, we aim to give the ability for anyone to invest one dollar into anything within 5-10 years. We care about the financial participation of everyone who can afford to invest in assets that resonate with them to create and accumulate wealth.
We know we can’t do it on our own, so we have a number of partnerships to co-create on the value chain of trading and investing. We are always on the lookout for partners in different locations, with a variety of access, demand, and supply of assets and capital.
ABR: How has your experience in global financial institutions helped in running FinFabrik?
AM: I see it as a strength and a differentiating factor because it cuts through a lot of jargon and nonsense. We can talk to both fintech and finserv (financial services) at deep business and tech levels.
Most of us in the team come from financial services — I spent 16 years in prime brokerage and brokerage before catching the blockchain and fintech bug four years ago.
When we talk to financial institutions, we speak the same language: we understand their needs and problems from the inside.
Having said that, nothing prepares you for being an entrepreneur. It is brutal, you learn daily, you expose your weaknesses constantly, you make mistakes all the time, but the opportunities to learn, self-improve, share, and overall move forward are priceless.
ABR: How is fintech transforming our daily lives?
AM: Fintech is not only about the technology to transform the financial industry but, more importantly, about bringing new investment opportunities to everyone — that’s what it means to democratize finance.
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