Fintech Horizons was founded by veteran journalists. We cover fintech startups, with a focus on insurtech, payments and blockchain/distributed ledger. Our articles highlight company technology, people, competition, and fund-raising, while also looking at how a company was founded.
Dasceq, a company that has created a SAAS platform that uses AI to streamline collections, is “definitely” interested in raising seed funding, CEO and founder Abhishek Goel told this news service.
The company would like to raise a seed round of close to $1m, the CEO said.
Dasceq was founded in August 2017 and has its headquarters in Irving, Texas. It aims to follow in the footsteps of innovative companies like GreenSky and Affirm who used personalization to transform lending, by doing the same for collections, he said.
The company’s software analyzes data from delinquent accounts to determine when, how, and with what frequency an account holder should be contacted. This could mean more or fewer phone calls and could also result in greater use of text, chat, and email, he said.
Dasceq has been bootstrapped thus far and is capital-efficient. The company has an experienced team of data scientists that are skilled at using regression analysis, AI and ML and who have worked previously for companies like Citibank. In addition, Dasceq’s platform is already on the market and is well-liked by customers. These facts, combined with its growing market traction, should make Dasceq appealing to investors, he said.
Dasceq does not plan to use an investment bank to raise its seed round, as it will likely be talking mostly with seed funds and early stage venture firms, the CEO said.
It could though work with an investment banker in six to twelve months. By then, Dasceq should be ready to start preparations for an A round and may tap an investment banker for help with its go to market strategy. The company expects to raise its A round in 12 to 18 months, he said.
The A round will be much larger than its seed round, with a likely size of $5m plus. This is because the A round will be used to scale and would only be raised once Dasceq proves its effectiveness over a larger customer base, he said.
Dasceq grew from 7 to 15 people last year and expects to grow its team from 15 to 30 following the seed raise. The company will look to hire additional support reps, software engineers, and data scientists, Goel said.
Dasceq’s primary focus within collections is prime and subprime auto, with a secondary focus on short and long-term personal installment loans.
There could be other areas of collections that make sense to consider later. Logical areas for expansion include credit cards, student lending, healthcare, government, utilities, and IRS, he said.
Dasceq’s focus is squarely on the US this year, although international expansion could be considered in 2020 as the company has already received customer inquiries from abroad, he said. The addressable market is huge, with delinquencies globally exceeding a trillion dollars, the CEO said.
Dasceq’s aim is to find “the needle in the haystack.” The company’s personalized approach to collections improves efficiency by 30% or more while increasing the amount collected by 8% or more. By using AI, the platform also continuously fine-tunes its recommendations for dealing with delinquent accounts, the CEO said.
The company’s approach differs from some in the space who claim to use AI, but who lack prior experience working with large data sets. Those in collections cannot be fooled, Goel said, as they quickly can tell if a new approach is working.
Prior to Dasceq, Goel worked as a data scientist for more than 15 years, including at GMAC, Argus, US Bank, PwC and most recently as VP of Strategic Data Solutions for Citibank.
He also was an adjunct professor at SMU and taught data analysis at the University of Texas at Dallas. He received his MS in applied economics from North Dakota State and has an MBA from West Bengal Technology University.
Ernest is the founder and CEO of Follow My Vote. The company was started in 2012 and is working towards the creation of a secure, end-to-end voting system using blockchain technology. In the Q&A, Ernest discusses the company’s minimum viable product (MVP), its options for raising funds, and its efforts to create awareness on how blockchain can be used to bring transparency and security to elections.
When did you start Follow My Vote? What was your initial motivation for creating the company?
I started Follow My Vote on July 4th, 2012. I initially founded the company with a different idea in mind.
My motivation has always been to look at societal problems and see what I could personally do to help solve them. During that time period, Congress was in gridlock and couldn’t agree on anything.
I wanted to do something to alleviate the impasse. My initial idea was to create an app that would let voters view legislation as it went through Congress - both before and after their representatives had voted.
The before part would almost work like a game, where a constituent could put themselves in the shoes of the elected official and in turn, let the elected official know how they would vote on a given piece of legislation. The aim then was to hold elected officials accountable, by making them aware of their constituents’ views on specific legislation in real-time.
After working on the idea for a few years I moved from Florida to Blacksburg, Virginia in 2014 and began searching for a technical co-founder for the project.
I graduated from Virginia Tech in 2004 as did Dan Larimer, the founder of BitShares, who later co-founded Steemit and EOS. While in Blacksburg, I was introduced to Dan and we talked about ways that technology could be used to improve elections. From our discussions, it became clear to me that before we could really begin gathering voter data on specific bills, there first needed to be in place a transparent and secure election system.
With BitShares, Dan built a really interesting platform, one on which an end-to-end verifiable blockchain-based voting system could potentially be built. After some initial collaboration with developers from the BitShares team, I changed the focus of Follow My Vote to that of using blockchain to create a secure and transparent election system.
Those discussions with Dan really brought back memories of my first time voting, in the 2000 presidential election between George Bush and Al Gore.
I had just turned 18 and was living in Germany. I was passionate about politics and I was anxious to cast my vote. The election turned out to be most controversial in the nation’s history. If you remember, the election ended up before the Supreme Court, where the main issue revolved around what constituted a hanging chad. At the time though, what really caught my attention was that the media had announced Gore had won, but later retracted that determination. I remember thinking, what is really going on here behind the scenes? It was clear to me that the election system was a black box, that we didn’t have a guarantee that everything was completely honest through and through.
So in 2014, after deciding to focus the company’s efforts on using blockchain to create a secure, transparent voting system, our team began doing as much research as we could on elections, the technology and players involved, and the problems plaguing our voting system. We found all kinds of vulnerabilities with voting machines, with the registration process, even issues around paper-based ballots. The more we learned, the more we tried to educate people about these vulnerabilities and the more we focused on how technology could be leveraged to bring honesty and integrity to the process. My background was in digital marketing and I worked on educational marketing campaigns to get key influencers in Computer Science to get behind the idea of blockchain voting, as there remains a common misconception among the public that there is no way to build a secure voting system online.
Are you considering any options to raise additional funds?
We are thinking through our options. A while back, we completed a small friends and family raise of $50,000. Other than that, I have bootstrapped the company with my own funds, and we have continued building our platform at a slow and steady pace.
Our first goal has been to secure our IP, and we are in a good place there. We have a patent pending for an end-to-end, blockchain-based voting system, one with technology that no one else has in place.
One possibility to raise funds is through an ICO, something that we have not ruled out. There has been a lot of talk about issues facing ICO investors and in a way it feels that the gold rush there has come and gone.
We actually formed Follow My Vote as a public benefit corporation. We feel this is important because it separates us from others in blockchain voting that are strictly for-profit companies. Even with some of the issues that investors have faced around ICOs, we still feel that some ICO investors might be willing to get behind a unique idea with a broader societal benefit. We think our mission and our IP could potentially be a draw to investors.
We really feel that our project could benefit society. We have gone far enough without it; now technological solutions need to be looked at. I think the issues are bigger than just Follow My Vote. A global initiative should exist. We have completed our MVP, we have created patent-pending technology, and those two things could be of interest, if packaged correctly. But we haven’t yet decided whether we will go the ICO route.
Finding an angel investor or investors would be another option, if we decided to forgo an ICO and take a more traditional path. We haven’t yet developed an enterprise national system for elections, so it would be too soon to look for a Series A or a Series B round, but raising funds from an angel investor or investors could potentially make sense.
We have completed our MVP. It is a functional, stake-weighted system created on BitShares that has several commercial uses.
A third potential option then is to fund the project through money earned from custom blockchain development work that leverages both our MVP and engineering talent. There is a lot of demand for the technology, and we have the right infrastructure in place. We have a system that has stake-weighted voting that could be useful in a number of areas and we have been contacted by groups interested in using our technology for commercial purposes.
We have two different software demos, one we initially developed by partnering with one of the core developers from BitShares. We have a user experience demo that displays how a secure blockchain voting system works. Additionally, we developed what we call our MVP, the most simplified version of our software, a stake-weighted voting system that runs on BitShares. The MVP couldn’t be used yet though in an official government election as it is not one person, one vote.
Our ultimate goal, creating a secure, end-to-end voting system using blockchain, would use some of the features of the MVP, but is a bit more complex. It needs to be set up as one person, one vote and also needs to include an identity verification component.
The identity verification piece alone requires a lot of intense development work. There are a number of technologies that could be used, some are document/information based, some work through biometrics, and some require elements of both. There is also the issue of verifying a person’s identity, while at the same time ensuring that a person’s ballot is cast anonymously.
Our MVP just has the voting system for creating an election contest on BitShares, using a BTS core token, but it is a stake-weighted system and is not one person, one vote.
Have you given thought to commercial uses of your MVP?
Sure, we have found that a stake-weighted voting system has uses for shareholder voting, typically for publicly traded companies, such as in proxy contests. For private companies, it can be used for voting on candidates for a company’s board of directors.
Our system is able to support that now, by creating a token for a company asset that can be distributed. It’s online and it’s really great technology.
Homeowners associations are another use case for stake-weighted voting, as a lot of times people may own multiple condos in a condo project.
So there are a number of commercial uses for the MVP. It would require some polishing and customization, but it is already functional and we are exploring ways to leverage the MVP to fund future growth.
And that is really where we are now, we are building out our MVP, so we can earn money that we can use towards the larger goal of creating an end-to end, verifiable blockchain voting system.
One idea that has been suggested, which could be interesting, would be to set up a parallel vote, or “mock vote” for an upcoming election, although this would likely require additional resources.
What are your top priorities for 2019?
We are really focused on building strategic partnerships. The idea is bigger than Follow My Vote, we would like there to be a global initiative highlighting the issues facing our election systems. We are starting to see more of the flaws come to the fore, with the recent investigation by the FBI that highlighted Russian meddling in the 2016 election. The system is broken and the political issues are dividing the country. So we really need to build strategic partnerships. We can’t do this alone, as we all need to work together to bring a solution to light.
Those strategic partnerships will help determine how we raise money and how much we are able to raise. They will also help us lay out a roadmap for when and how we can put in place a pilot to demonstrate the viability of the technology.
The biggest challenge is the technology still needs to be proven out in a specific area where there is significant adoption. Once we have done a pilot in a concentrated area, we can start to prove out the value of the technology more broadly.
What has it been like being an entrepreneur in the blockchain technology space?
I think the biggest issue for me and for anyone in the blockchain space is the education process. Satoshi started it all, and everybody has scrambled to figure out how the technology works and how it can be leveraged to make the world a better place. This has been a big education process for me coming from a background in digital marketing. You only get so far talking about blockchain technology before your credibility gets questioned. So I have done my research, and I aim to serve as an ambassador for the technology, and as a potential go-between connecting business professionals with the technology’s core developers.
You can’t be afraid to fail, and we have had some failures, but we are not giving up. I will do whatever it takes to bring about change. It’s an educational process for all of us, and there are still a lot of misconceptions about blockchain and a lot of distrust. My aim is to break down the walls and educate people, to get pilots in place and prove that the technology can work.
So my final point would be to emphasize that our election system has fundamental flaws. With Follow My Vote, our goal is not to completely overhaul that system, we are just trying to provide an additional option in the days leading up to the election, in areas like early voting options, that give us an opportunity to prove the viability of the technology.
And thus my final question is really why not? Why isn’t the world testing this technology? Why aren’t people in the U.S. doing it? This is an opportunity to get it right. So instead of constantly talking about how it won’t work, why not talk about how it could work? We can’t do any worse than we are currently doing.
BlytzPay, based in Lehi, Utah, wants to raise between $2m and $7m in a seed round to scale up its platform to serve purchasers who use cash more frequently than credit, said CTO Jason Fletcher.
The 2-year-old company previously raised $2.5m from angel investors and family funds.
BlytzPay’s platform permits customers to communicate and pay via text interactions. The current system operates on a TEXT-PAY-DONE basis, said Fletcher. The customer’s mobile phone and bank funds are linked to a network of retailers. After the customer makes a purchase, the retailer is paid by clicking the pay button, and then receives a done message.
While many smart phones offer the same type of service, or a scan, not all customers own smart phones now. Many consumers, usually with a lower income, still use mobile phones that are not smart phones.
While the BlytzPay platform is designed to reach those consumers, Fletcher expects the real growth from BlytzPay will come when the company finishes extending its platform for cash payments. Fletcher noted one-third of all customer purchases in 2018 were paid in cash.
Paying in cash is inefficient for the customer and the merchant, but with one-third of the transactions in cash the payments are not going to end overnight, explained Fletcher. In addition, Philadelphia and San Francisco this year passed ordinances that banned retailers from accepting only credit payment, recognizing many customers would be prevented from shopping at selected stores.
Fletcher described the cash payment platform as personally interactive. For example, a customer could be shopping at Wal-Mart, which would encourage repeat visits to Wal-Mart. The customer needs to make a $500 monthly payment for a car loan. The customer would hand the $500 cash to a clerk, and the clerk would transfer the funds to the lender. A text message would be sent to the customer affirming the payment to the lender.
Fletcher said BlytzPay seeks to move the cash-pay system into the market in 6 to 12 months. Some of the seed capital raise will be applied to the rollout of the cash-pay system, he added.
BlytzPay counts 700 current users and has 17 employees. The company claims its mobile point-of-sale system can reach the top 1% of income, the bottom 1% and consumers of all ages.
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