I'm Lawrence Wintermeyer of FinTech TV at Abu Dhabi Finance Week, and I'm delighted to be joined by Kamal Alousfi from Hashraft Ventures, co-founder and now chair.
Yes, welcome, Kamal.
Thank you.
Thank you so much.
Can you give our audience an idea exactly what Hashgraph Ventures is?
Yes, um, the Hashgraft Ventures is a venture capital fund that we have established here out of Abu Dhabi.
As a continuation for our ecosystem development activities, um, Hedera Hachka as a project has been, uh, designed as a concept back in 2016 by two visionary leaders, um, Doctor Lehman Bir and Mans Herman.
In 2017, um, there have been a vision of establishing a governance around that technology and around that network, and in 2018, we announced, um, The inaugural meeting of the governing council members in Seoul February 2018.
Back at the time it included Swiss Group, Magazine Wiza, DLA Piper, um, Boeing, um, Bank of Amora, and others.
And so that's the Hadera account.
That's the Hadera.
He's that's the uniqueness of Hadera Hashka.
Hedera Hashka is a 3rd generation DLT platform.
That is combining the technical innovation of blockchain technologies and distributed digital technologies, but on the top of it, we have set up a governing council, basically reputable and recognized Fortune 500 organizations that are bringing the trust and that are tasked to maintain and run the network on behalf of the community and on behalf of the project.
So back to your question.
When we started back at the time, the council and the board of Feder Hash made a decision to deploy ecosystem development activities to attract talent and most importantly, to retain this talent within the ecosystem on board high growth, high growth potential use cases and projects and enable them to build and deploy their solutions on Hadera Hashka.
We started, uh, like any other layer ones, we started with grant programs, and in September 2021, we made an announcement of an allocation of roughly $5 billion worth of HBAs to be deployed for the ecosystem for training, for workshops, for startups, for enterprises, even for governmental entities that are willing to design, develop, and deploy viable solutions on Hadea network.
2 years later and 3 years later we realized we need to find some sort of continuity plan for all these innovators, disruptors, startups, innovators, but even enterprises that are willing to speed up their transition from a web 2 organization to a web 3 organization by giving them an outlook, so.
And the answer was, why don't we set up a venture capital fund?
That was the idea behind it.
That was the idea behind precisely.
Number 1, we bring the Hajkav Association or Hedera Hashcraft through the Hashka Association to be the anchor investor so that we kind of position Hadera Hashraft as the underlying technology and the underlying platform and 80% to be covered by third party investors, basically.
Family offices, other APs that are interested in investing in Webtree World, but they don't have necessarily the expertise to assess Webtree projects and startups because it's kind of a sophisticated investment process.
And that's something that we succeeded at.
And, um, now we kind of, um, if you look at it as a big picture, we started with trainings and education and heckathons basically to create that critical mass for, uh, of developers and builders.
Then we, uh, made an allocation, uh, a really massive allocation for ecosystem development activities to be deployed in the form of grants, and I'm talking about roughly, um, a value of, um, $5 billion back in September 2021.
And then out of these grantees, the ones that are successfully completed or managed to complete their innovation program or the successfully managed to deploy their use cases and their solutions and their applications on Hedea network, they are qualified to benefit from follow-on investments from scale-up funding that the venture capital fund.
Of Abu Dhabi is making available for these top.
I love that model.
I mean, I like the 80% private industry or family office investment.
Ali is the technical, uh, you know, expertise in underwriting, but you're describing a funding accelerator really that says, OK, gee, if you've been successful post-grant, the next funding ladder.
Now we've got a fund that we can venture back here.
So that's a really, it's a great ecosystem model.
And then we believe, we believe in a symbiotic ecosystem and we believe or we try to establish a vibrant ecosystem where we connect investors with innovators, with startups, with enterprises, with governmental entities, even with NGOs to bring Innovative ideas that are bringing value for Hedera as an ecosystem, for Hedera as a project, but also for the web tree industry in general, because remember we will all win if the web tree industry wins.
That's why we are looking into interactions and cross chain cross chain infrastructure solutions that are enabling that vision and maybe just to add to it and The hidden strategic incentive why we wanted to set up the fund is number 1 is to tap into third parties' co-investment opportunities, but most importantly to tap into their industry expertise because these co-investors, they are bringing a wealth of experience and industry insights when it comes to how to design, how to develop, and how to deploy and how to commercialize these innovative solutions once they have go live or once they have some.
Question, can you just give us an idea of what kind of firms then you're seeing come into this next stage of of funding?
What kind of companies, what kind of projects?
Yes, I mean, if, if I, if I have to cluster these, these, these projects or investment opportunities that we have, as we speak today, we have pretty much 3 clusters.
Number one is on chain finance slash RWA, basically payment solutions, asset organization solutions, and the likes of, of this category.
The second category is pretty much sustainability, sustain sustainability, yes, because there is a natural fit in it because Hedera Hajka is classified to be the greenest and the most sustainable public ledger from an energy consumption and also from its governance perspective.
Maybe just to give you an idea, I assume you are using Mastercard or Visa.
So the moment you use your Master.
The moment you use, for example, your Visa card, you are consuming 1000 times more energy than a hydera transaction consumes in terms of energy goal, which is, which is very sustainable and very predictable.
And the second element of it, Hedera transactions or hydera transaction fees are denominated in dollars.
Basically for you as a business owner or as a client or as a solution adopter.
You don't have to worry that much about the crypto market, whether the crypto market is up or down.
You know exactly you are paying $0.0001 per transaction, and that's it.
And that's something which brings stability, brings certainty to the business models, and also predictability if you wish, when it comes to rolling out the solutions to the markets.
So that's, that's, that's the second pillar is sustainability, and the third pillar is.
I would classify them within web 3 gaming slash loyalty programs and, yes, yes, 3 gaming is the, that's where we see that's where we see also a strategic fit for Hedera because For Hade as a project and as a network, and let's keep in mind that the Hashkar Ventures Fund is a strategic fund.
It's a fund that has two mandates.
Mandate number 1 is to Filter and on board and attract projects that are bringing or that are driving Hedera or the network utilization of Hedera.
Number 2, projects that are bringing value add for Hedera community and for Hedera ecosystem.
And number 3, that are filling a gap within the Hedera ecosystem.
The second dimension is the ROI-driven dimension, because remember we have third parties LPs that are not necessarily affiliated with Hedera, so they are interested in the returns, so they are not necessarily that much interested in the network utilization, so you need to answer the basic question.
I'm giving you $1 today.
How much I'm getting back in 5 years and then hopefully the network benefit drives the ROI and the returns, precisely.
That's why we have like 2 dimensions.
What we see there is nothing that is preventing us from having investment cases that are ticking the boxes in 2 dimensions.
Number 1, we are bringing network utilization and Fulfilling the gap in the ecosystem and serving the community and at the same time they have a stable and valid business model which guarantees good returns in 5 years.
Well, Kamal, that's great.
Thank you so much for joining us here attech TV at Abu Dhabi Finance week.
My absolute pleasure.
Thank you, Lawrence.
