At Distichain, we have built a trade engine using blockchain and AI technologies to deliver B2B e-commerce marketplaces and e-procurement platforms that facilitate seamless global trading. We combine traditional and blockchain-based logistics, insurance and trade finance providers.
Distichain platform is ready to launch and its pilot will be initiated with its first marketplace by the end of July, delivering its first live trade transaction through its interface.
Distichain has onboarded three clients (signed agreements) with three marketplaces to deliver 300M USD of trade in 2021, along with an agreement to collaborate with Sumitomo Corporation to build an e-procurement platform for their oil and gas business unit.
Distichain is aimed at helping businesses of all sectors, private and public, to digitize their trading. More specifically, industry organizations, cooperative societies, government entities, or private companies, can own a Distichain marketplace and bring together traders in the same vertical into one community for buying and selling their inventories.
Customer segments also include companies looking to automate their commercial network and/or expand it (existing offline marketplaces). Furthermore, we have seen a keen interest from governments and free-zones who want to see trade prosper across their network.
We are focusing mostly on SMEs in developing countries to automate trading for distributors, wholesalers, retailers and small and medium manufacturers.
Problem or Opportunity
Despite the progress in technology, cross-border trading has not progressed significantly. Commerce is still operated within closed communities (trust), using complicated paper and email-based processes (manual), with very limited insights (data) beyond verbal. Large corporations have built systems to integrate with trading partners but in SMEs and particularly in developing nations progress has been far slower.
Distichain is tackling three main challenges:
- Lack of trust and security: B2C e-commerce uses credit cards to secure payment, but for large B2B trading this is too costly and card limits are an issue. Letters of Credits are costly, tedious, and very slow to support fluent trading, and “cash in advance” kills cashflow and puts the buyer at risk of fraud.
- Manual processes: Even after overcoming the trust issue, multiple email chains from both buyers and sellers are established with logistics, insurance, inspection service providers. SME’s do not have tech or know-how to integrate electronically with such providers.
- Limited insights and data: Unlike financial markets or commodity markets, wholesale markets for consumer goods do not have a source of data to reflect prices despite the heavy fluctuation of prices driven by supply and demand. Traders generally use experience and gut feel as their only tools to mitigate risk.
Solution (product or service)
We believe Blockchain and AI are on the verge of revolutionizing trade finance and supply chain as part of the fourth industrial revolution. At Distichain, we have built a trade engine using these technologies to deliver B2B e-commerce marketplaces and e-procurement platforms that facilitate seamless global trading.
By combining the best service providers in logistics, insurance and trade finance with the most innovative of these “fourth industrial revolution” solutions, we offer SME’s globally an intuitive user interface for them to trade using services normally limited to the elite few. Our marketplaces have all the functionality of any leading B2B platform, but we are also able to deliver more:
• Secure: By connecting to traditional & digital banks or Fintech providers, we facilitate instant trade finance securing transactions & allowing trading companies to give each other open credit terms, 100% risk-free without need for credit cards or up-front cash.
• Simplify: Zero email end-to-end automation of transactions with integrated logistics, insurance, & inspection services. Manage it all from one screen seamlessly.
• Empower: Distichain’s AI enriches users’ decision-making with a wealth of data & recommendations to optimize inventory management & maximize profitability.
• B2B Marketplace providers like Shopify Plus & Uppler marketplaces do not offer innovative trade finance solutions which are crucial for a successful B2B environment.
• Company directories like We-trade & Trade Cloud offer a solution by creating a company directory for secure and automated trade, whereas Distichain offers a product directory via B2B e-commerce.
• Traditional B2B e-commerce marketplaces like Alibaba and Indiamart are huge B2B platforms but high commission structures, lack of automation and trade finance options have limited the availability of branded consumer goods.
Advantages or differentiators
Distichain is the only fully automated and flexible trade engine which facilitates the digitization of any business model. Users can be buyers, sellers, or both allowing replication of any commercial situation simply and facilitating free trade. It is a combination of industry-specific marketplaces as a service and blockchain trading platforms. Our ability to offer instant trade finance securing transactions and allowing trading companies to give each other open credit terms, 100% risk-free without credit cards or up-front cash is a clear difference. We offer flexibility & customization versus single trade functionality. In summary, Distichain provides customizable marketplaces built in only 3 to 6 weeks, on which platform users are able to trade globally, buy and sell inventory on one easy to use interface, with zero email and door-to-door advantage.
To encourage adoption, all revenue streams will be linked to marketplace usage. The only exception is the “Development Fees” which are the minimal one-off cost of customizing your marketplace.
Distichain has multiple planned revenue streams:
1. Trading commission: 0.3% of all transactions performed successfully on our platform.
2. Service provider’s revenue sharing: Estimated at 5 to 15% of service provider revenue obtained from users of our platform. These service providers offer logistics, insurance, trade finance, etc. at a fee, and we negotiate rebates from them.
3. Paid value-added services for users on our marketplaces such as highlight certain products, companies, or service providers at a fee. This fee is shared with the marketplace owner.
4. Development Fees: Customization Quotations will be offered to customers to adjust their marketplace technical, design, and legal specs in line with their business model.
Post launch and POC, trading volumes and active users will be considered as our key metrics to be measured for profitability. By the second half of 2020, Distichain should be fully operational with the recruitment of a sales and customer support team. Distichain will work via 3 channels:
• Direct sales and marketing reach.
• Recruitment of SaaS resellers globally
• In-country agents/influencers will be identified and recruited on a success fee.
Money will be spent on
33% technology and development
58% payroll and expenses
Offer for investor
1M USD: Safe Agreement with 5M post-money valuation cap
Distichain is the only trade engine built to deliver secure and simple B2B end-to-end transactions. Marketplaces offered by competitors lack at least one vector of our automated processes. We are building our solution ahead of the curve to have first mover advantage. We aggregate business services that themselves are still in their early stages. Demonstrating our difference vs other B2B marketplaces is a challenge as the company has yet to raise its seed round, we will need a special marketing budget to cut through the clutter and prove our unique value proposition. As soon as the company starts making revenue through its three marketplaces, there will be only growth through new clients and partnerships.