The ‘Power’ to change the world

That alarm which wakes you up in the morning, annoying yet indispensable for your schedule … That microwave which warms your food, so that you can grab a quick bite before rushing to work or school … That automobile that safely transports you to work/school, unless you choose to walk … Do you realize how dependent you are on technology today? This was not the case always!

I remember my first overseas student exchange program to Spain, in 2009, and I remember traveling across the country, navigating with the help of just paper maps. Smartphone did not seem essential to me ten years ago, but now I can’t think of surviving a day without one! The more you think about the impact of technology on your life, the more you will realize how it has been guiding the evolution of mankind. Don’t you want to contribute to this driver of the future of the entire planet, and beyond?

How exciting it would be to introduce a gadget that will change the way people plan their day. I thought for months what may that gadget be? I did a lot of research, mostly while commuting and mostly on my phone, and my phone was always low on charge. I forgot to carry my battery backup, almost every single day. My charger hardly got plugged out of the socket above my desk. I almost never used the public charging stations because I was always on-the-run, and I am sure that I am not the only one! Result? Often found myself stuck in the middle of nowhere, without a functional mobile phone. Sounds familiar?

I remember that one day, back in 2016, I was visiting a prospective client at a very remote location. I had taken a cab to the meeting; however, on the way back, I could not find any. Just when I wanted to use the Uber app, I was shocked to see that my phone had run out of charge. A group of strange men stared at me as I walked past them, without even knowing if I was moving in the direction of the nearest bus stop. It was scorching, 91°F, and I felt helpless and scared. I was vehemently shaking my phone, as if the motion would induce some charge. Wait, what if it could? What if I had something with me which I could just shake to generate power? What if I could harvest energy from motion and use it to charge my phone? Suddenly, as if it was a sign from the Universe (that I was on the right track), I saw something yellow in the far end of the seemingly endless lane. I was never happier to see such a dilapidated yellow Taxi that stopped and asked me where I wanted to go. Sitting in the car, all I could think about was the device that would generate charge from motion. Thus, started my research on Personal Energy Generator (PEG) technology and brainstorming on how to integrate this technology with things that people will not forget to carry with themselves.

My Wharton journey started with a blast. Wharton being my career switch to Finance, I dived into ‘Finance’ right at the start! The hectic Investment Banking recruiting kicked in after the mid-sems. However, I never forgot one other thing that I wanted to work on during my Wharton journey, something that has the potential to change lives. I named this venture ‘PowerMove’ and it is now a part of the Venture Initiation Program – Philadelphia (VIP-C).

The idea behind PowerMove is to leverage PEG technology in generating power for the gadgets that we move around with. Initially I conceived it as a wristwatch or fitness tracker, enabled with PEG, generating power from hand movements. This device shall double as a portable cell phone power bank; a ‘Green’ product that grants one the ‘Power’ to be in control of one’s life, the ‘Power’ to make a statement, and the ‘Power’ to save the planet in every move. Unlike the competing products such as, the mobile cases which have inbuilt battery backup, PowerMove shall the generate power-on-the-go and clean energy. PowerMove will generate power anytime, anywhere; you just need to ‘move’. The main challenge is the bulkiness of PEG technology that will be used, and in fact, this is a challenge for all mobile battery backup devices.

With the VIP-C Award, I have access to shared workspace, elaborate database, group advising, monthly workshops, and more, and currently I am researching how I can reduce the size of the PEG and integrate it with a wristwatch/fitness tracker so that it is always on the wrist in times of need. VIP-C mentors have been really supportive and encouraging. It is obvious that this technology will become more compact with time; in fact, around the year 2017, the Vanderbilt University had prototyped a jacket with ultrathin energy harvesting device that generates energy even from slow human motions and can be used to charge phones. The future looks optimistic and next semester onward, I would love to know what our Penn Engineers think about it.

My focus now is to integrate PEG technology with backpacks, before the evolution of the PEG technology into miniature, yet efficient, forms that are suitable for watches. People like me, who are always carrying backpacks, can wield the benefits of this amazing renewable energy technology immediately. I am looking forward to work with anyone who has the passion for or the experience in the energy sector, and/or finds the idea interesting. If we want our future generations to live healthy and long lives, we have no other option but to resort to clean energy in all micro-level and macro-level aspects. This is the time to take control, this is the time to change our destiny. Let’s ‘move’ towards a sustainable future, and change the world!

 

 

 

 

Latin America’s Growing Fintech Ecosystem

I would like to begin by clarifying that I am, by no means, an expert in this topic. However, after dedicating most of my summer at FinTech Collective to gaining familiarity with it, including a trip to three countries in the region, I have a few observations that I would like to share.

In a region that, despite macroeconomic complications, is currently energized by a surging middle class and a high degree of mobile penetration, fintech has emerged as a powerful tool of deepening financial inclusion and access to basic services. Brazil remains king – both in VC dollars captured and addressable market size. Its entrepreneurial ecosystem is yielding PayPal style “mafias” of accomplished entrepreneurs moving into other ventures after successful exits, and it consistently grabs headlines –as well as SoftBank’s attention – via massive funding rounds (think Creditas or Nubank this summer). Its local funds (including KaszeK or Monashees, among others) are becoming increasingly active in other Latin American countries, addressing funding needs particularly evident in the Series A/B space. Meanwhile, the Central Bank consistently speaks of lowering prices and increasing competition.

Nevertheless, positive signs are also clear in other countries. Mexico’s government is in the process of fully enacting a Fintech Law which, despite arguably raising barriers to entry in certain sub verticals, embraces the power of these new solutions. Its local funds are growing and gaining prestige, with fintech interest palpably increasing among Ignia, Dalus or ALLVP, among others. As the second biggest market behind Brazil, it is the chosen expansion target for most startups in the region, in part due to cultural and linguistic similarities. Simultaneously, the number of fintech startups in Colombia has nearly doubled in the past twelve months. Helped by agile regulatory changes – including the creation of a startup sandbox – improving conditions have granted the Andean country status as the third biggest fintech market in LatAm, ahead of the likes of Argentina or Chile. Nevertheless, for as long as family offices effectively act as the primary source of seed capital, the need for more robust local institutional options grows more pressing.

Sector wise, banking/lending/payments has generated the most noise to date. As the vertical has grown crowded, startups face the lower end of the pyramid frontier, which poses distribution challenges that will be hard to overcome. Insure tech has emerged as a promising space, as the need for such products parallels rising middle class affluence. Reg tech opportunities should also materialize as legislation settles and regulatory burdens require out sourced assistance. Lastly, as high fraud prevalence remains an endemic regional problem, integrated solutions in the digital identity space will be attractive. As corporates prove inflexible, these startups might even prefer API-ready peers to legacy customers, in terms of clientele.

In summary, an abundant supply of talent is finally meeting the necessary conditions to become more realized. After decades of insufficient product offerings from traditional banks and prohibitively high rates, a different light shines on customers in one of the most urbanized regions of the world. Vibrant communities are emerging around fintech ecosystems, drawing inspiration perhaps not only from the United States, but more so from East and Southeast Asia.

MENA’s VCs Should Have Bigger Roles If They Want Better Returns

The VC ecosystem has rapidly evolved. Four years ago, MENA had 15 active VC funds. Today, that number is cited comfortably at over 55 according to MenaBytes. An estimated $900 million dollars was raised in 2018 alone, a figure that is set to be exceeded in 2019 as an unprecedented number of VC funds mark their entry.

Two unicorns have emerged out of the literal sandbox of Dubai—a small market relative to others in the region—proving that ecosystem is more than just a buzzword. The acquisitions of Careem and Souq.com brought much fanfare and credit to the region when it saw two buyouts by FAANG companies. These deals demonstrated that the region can deliver better than Silicon Valley firms can. If you can’t beat them, join them—or buy them.

MENA’s range of exits have also broadened. Startups such as Property Finder are attracting major capital from the world’s leading PE firms and Network International, a Dubai-headquartered payments firm, saw a successful IPO debut. Viewed in the context of a nascent and small market and a difficult economic and political climate, their ability to prove that homegrown models work make them all the more profound.

Still, the region’s ecosystem is wrought with challenges and requires VCs support to fix it. Regulatory reform is still required but VCs will need to step up if they desire a more sophisticated and growing deal-flow.

Capital is not the problem. MENA is blessed with a strong network of wealthy families and ample sovereign funds. This resource, however, remains underpenetrated. Private wealth leaves the region, and is invested in safe assets like real estate. VC is little understood in circles that view it as risky, illiquid and potentially non-shariah compliant. However, the share of private capital allocation in VC and PE in the US and China is on the rise. Startups are staying private longer and once-public companies are being taken private. The role of private capital will continue to grow globally and will impact the region, making it all the more critical that LPs are informed about this asset class.

Indeed, the world’s largest bets in VC are being made in the region. Saudi’s PIF and Abu Dhabi’s Mubadala are showing that VC is a serious asset class—$65 Billion worth in SoftBank’s Vision Fund for example. If risk-averse governments believe in VC, why can’t LPs?

Awareness raising and communication to LPs is needed. To start, firms can make the process more experiential for LPs—they can organize touchpoints between LPs and management teams, a move that can make LPs feel more engaged, committed and informed.

VC firms need to promote transparency through a focus on better governance. The Abraaj scandal has set the PE and VC industry back but the lessons gained make it all the more compulsory to restore trust in the industry. Data collection and fund performance tracking will enhance trust between LPs and fund managers. It will also lead to better decision-making and firms with track-records bring in more capital in the future.

Funds and not just founders need to shift their mindset on failure. Owning and sharing stories of successes and failures will drive better collaboration and lead to more sophisticated investment practices. It is no secret that VC firms in Silicon Valley fail to make the right call in at least 30% of their investment decisions.

Finally, VC firms need to make the case for homegrown talent. Not only have local startups demonstrated the potential to be superior in meeting local needs, but facing an overcrowded VC market like the US means that better deal terms are likely to be struck at home.

VC firms can do more to support entrepreneurs.

VC funds can provide management teams with business advice and act as connectors to business partners, industry leaders and talent. Platforms need to be created that link portfolio companies to one another to promote shared knowledge and resources—an all-hands quarterly in-person workshop is one trick to employ.

Most critically, VC is a boys’ club. The industry should move away from that. VC investors need to do more to promote diversity within their ranks, their LP base and all levels of their portfolio teams. A diverse team that draws on multiple perspectives and experiences leads to better performance. A study by the IFC showed that funds with gender-balanced senior investment teams earn returns that were 10% to 20% higher.

VC firms should support startups that are turned down for investment. Providing open, critical and actionable feedback on failed pitches can over time strengthen the pitch-making process and business acumen of entrepreneurs as lessons get passed on in the wider ecosystem.

VC investors sit at the center of this ecosystem. The time to leverage this powerful role is now.