Congrats on raising new financing for Masa Finance. How much money did you raise? And what are the terms of the deal?
On May 4, we announced a $3.5 million in pre-seed funding. We offered equity through a SAFE in the sponsoring company and tokens in the DAO which is launching when the protocol goes live later in the year.
Who participated in the round? And how will these investors help the business grow beyond the money?
The round comes from both traditional and web3-focused VCs. Investors include Unshackled Ventures, executives from GoldenTree Asset Management (a $46bn credit-focused fund), Flori Ventures (Celo-focused fund), GSR, Decentranet, Intersect VC, Lateral Capital, Peer VC, Alves Ventures, and several angel investors in the fintech/blockchain space including Louis Beryl (founder of Earnest), Gustavo Menezes (24hr of Le Mans Driver for Peugeot Sport), and Jacob Riglin; a high-profile NFT artist who will be launching future NFT-collateralized loan products.
What does your company offer today? And what do you think it will provide in the future?
Masa Finance provides a simple user experience through which people can link, manage, and track traditional and cryptocurrency accounts to create a non-fungible credit report - allowing access to credit through fully on-chain services. You can think of the user experience as credit karma for DeFi in the first version of the app.
Underpinning this, Masa’s credit protocol comprises a decentralized credit bureau, a private transaction layer, and an embedded lending protocol consisting of a non-fungible credit report, composable credit primitives, smart contracts, and liquidity pools, enabling developers to launch sophisticated credit products in DeFi to match the existing centralized credit paradigm.
At launch, Masa supports over 10,000 data sources across 78 countries through traditional financial data integrations with Credit Bureaus, Banks, and Fintechs; aggregated together with global cryptocurrency coverage through exchange integrations, Masa unlocks a market of 2.97B people through its credit infrastructure.
We have several partners ready to provide liquidity and loan products within the app; including
What differentiates your product and/or offering from competitors?
Masa’s mission is to bring the next billion people to DeFi by bringing data from off-chain financial data and cryptocurrency accounts together on-chain. The platform offers a seamless user experience through which anyone can link, manage, and track their CeFi and DeFi accounts. By giving users the ability to create and leverage a new decentralized NFT credit report, Masa can create a decentralized credit score and unlock access to uncollateralized loans and other tailor-made financial products through fully on-chain DeFi services.
In laymen’s terms, how do you plan on spending the money?
We are focusing on expanding our senior team by finding the highest performing people who want to work in a decentralized organization (DAO) - this includes roles across engineering, growth, and operations. Given the scale of the vision we have, finding highly experienced engineers is critical. We have just hired a Head of People Operations to drive culture, recruiting, and performance across the organization. With the pre-seed behind us, and with our first partners going live we are raising a Seed Round to expand, and launch the DAO and the protocol's production release. Alongside this, we will conduct a public token sale and scale NFT credit reports and node operators If you want to work for a high-performing distributed team check out our open roles here (link).
What’s exciting about your traction to date? And how do you plan on measuring growth going forward?
Masa is building on Celo and Ethereum, has 36,000 people signed up to the platform, 8 partners going live in the Masa App, and 2,100+ node operators on its live testnet that supports zero-knowledge private transactions and private smart contracts. Masa has seen double-digit growth each month as we’ve started rolling out our platform into different markets. The first credit products launching on the protocol include a credit builder loan, uncollateralized loans, and an SME line of credit through its app in June. We are focusing on two main drivers for growth and adoption of the platform; the number of NFT credit reports, and the number of partners providing loans through the Masa App. These two components drive private transaction volume to the private zero-knowledge layer which we expect to see continued growth in node operators from the current number live on the testnet.
What are your revenue expectations over the next three years?
The Masa platform drives protocol revenues through transaction fees on the private transaction layer, fees on loans originated through the platform (the majority of which goes to funding providers), and referral fees for partner loans issued through the Masa App. These fees are shared with validators and node operators who stake tokens to verify and relay private transactions - a percentage of these fees also accumulate in the DAO treasury. As a DAO we are focused on driving adoption of the protocol layer that enables private transactions,increasing the value of the token which is staked by validators and the DAO treasury. Our ambition is to be a globally adopted layer 1 private transaction layer for the entire DeFi credit ecosystem - this means growing to be a multi-billion dollar protocol that drives value for validators and node operators. At launch Masa will have a significant DAO treasury that will secure the long-term growth of the protocol. The north star metric we use to measure adoption is the number of users who have created NFT credit reports on the platform by connecting off-chain data sources on-chain.
What is your TAM (Total Addressable Market)? And what is your strategy to acquire the maximum share of this market?
95% of all lending in DeFi is collateralized with a high barrier to entry. Existing DeFI lenders are building for a world that doesn’t yet. With our data partnerships and integration we support over 10,000 data sources in 78 countries which addresses a market of 2.97B people. We are on track to create 5 million NFT credit reports over the next 18 months and onboarding over 100 lenders to the platform. Long term we want to be the ubiquitous decentralized credit layer for DeFi which means onboarding billions of users globally.
In your funding raising pitch deck, what is your favorite slide?
My favorite slide addresses our go-to-market for the next 18 months and our ambition in taking on a massive market. It not only demonstrates how incredibly huge the credit market is but it also shows how massive Masa will be by bringing a small bite of the global credit pie to DeFi. If we want to take DeFi mainstream the lowest hanging fruit to me is offering open access to credit services. We are very early on in the growth of DeFi, there are only 4.6M active users. Masa has the opportunity to double the number of users of DeFI wallets over the next 18 months alone by providing them with an NFT credit report. At 5m NFT credit profiles this represents a strong step forward in our mission to bring the next billion people to DeFi.
What problem are you solving? And Why is now the time for your company to solve this?
3.5 billion people worldwide do not have access to credit-building services.
DeFi is creating an alternate universe of finance, commerce, investment, and sources of capital for DeFi lenders to serve more customers. DeFi innovation will profoundly transform the global economy and disrupt industries. It is starting to reshape the way people borrow and save and is remaking banking as we know it.
DeFi lending has a profound role to play in this transformation. Key benefits of DeFi include greater security, speed, lower costs, a wide range of services - giving more choice, and the ability to unlock financial freedom through crypto holdings.
In addition to these accessibility problems developers have no middleware connecting traditional Finance with DeFI AND they can’t access encrypted (private) financial data for smart contracts. We solve for both.
What are the potential risks to the business? i.e. technology, regulatory, incumbents, legal, etc.
There are several hurdles to the mass adoption of DeFi. These include:
- Scalability – A sustainable DeFi ecosystem will likely consist of interoperable blockchains.
- Gas Fees – The issue of gas fees needs to be addressed to enable financial inclusion. We are building on Celo which is both mobile friendly and has low gas fees.
- Institutional Adoption – Mass institutional adoption will likely follow widespread consumer adoption.
- Utility – Most DeFi platforms in the space are building for a future that does not exist yet. We need a platform now that can serve and integrate core centralized banking systems and bridge them to DeFi.
To overcome these obstacles, we need to educate consumers and institutions on the benefits of DeFi. Currently, there are many, particularly in developed countries, who are comfortable with the status quo. These mainstream users who do not have an immediate incentive to learn about new and complex protocols and the disruptive technology enabling it. We need them on board in order to accelerate mass adoption of DeFi and ultimately achieve financial inclusion.
What intellectual and digital property does the company own? Or intend to build/own? i.e. patents, patents pending, copyrights, trade secrets, trademarks, domains, bored apes, etc.
We are planning to open source all aspects of the protocol over time - this process will be governed by members of the DAO and will be done under the philosophy of progressive decentralization.
Why should we think Masa could grow to the moon?!
There is an undeniable need to extend credit to billions of underserved individuals around the world. Without fair access to credit people cannot build leverage and increase their personal wealth. The fundamentals of wealth creation hinge upon access to credit. The current system does not serve the many, it serves the few. As a credit invisible person in the US - having immigrated here and only having 5 years of credit history I know how big the barriers are for accessing credit if you are not born into the system. Masa will succeed because we are enabling a more equitable future that provides access to financial services to an underserved global population, one of the most overlooked segments by traditional finance. Unlocking this market segment and aligning incentives through DeFi will drive massive growth of our platform. We will be the credit bureau (credit DAO) of the future, owned by all participants - not one central entity.