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Xcapit

Aligning wealth generation with social mobility promotion

Argentina
Market: Education, training, Financial services, Blockchain, Crypto currency, Artificial Intelligence
Stage of the project: Prototype or product is ready

Date of last change: 30.01.2021
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Idea

Our solucion is a decentralized application with 4 main components, for financial planning, for automated investing (cryptocurrencies), for learning while playing and for donating your capital or, just a percentage of your profits.

Current Status

Our current prototype: app.xcapit.com

Our current main users are middle-income families with savings capacity who want to invest their assets but find it difficult and complex to do it in the traditional market and they find our fully automated and tailored intelligent algorithms easy to use.
We are testing our prototype with 218 users, managing USD 1 M distributed in each of their individual accounts. Users with a riskier profile have obtained 46% return on their investment in USD in 2020.
These users not only had protected their capital against inflation and devaluation, but have also managed to increase their capital. The use of technology provided economic opportunities to those who could not access the traditional market. The culture of saving and investment has been promoted.

We are building this mobile app: https://www.figma.com/proto/KsG20sGhR2P1wmo11iDIXP/Untitled?node-id=2%3A1&scaling=min-zoom

Market

As a summary there are more than 1.700 million people over 18 without access to financial services.
We are targeting children and young people, who can invest by themselves or with the help of a tutor. Even though some cannot invest, they can still learn about finance, financially planify their activities and learn how to save and invest, while being eligible for donations.
A complete chart analysis:
https://docs.google.com/document/d/1XTVJDOTH8OqBy0hGaduBp1wOrj60toO0UhSAXG9CSzs/edit?usp=sharing

Problem or Opportunity

Children and young people from low and lower middle-income families have fewer opportunities to educate themselves and improve the economic situation in which they were born.

Among the main difficulties to achieve this objective the lack of savings culture is a key factor, in many cases due to the lack of education and financial planning, and also to the fact that these families, who constitute themselves as small savers, do not have access to professional solutions to invest their capital.

The entry barriers to investing are high. To access professional advice on planning and wealth management, they must be banked and they must also have a minimum capital to start.

Solution (product or service)

A decentralized application with 4 main components.

1- Financial planner that helps families to know how much they should save and invest to achieve their goals, e.g. to pay for their children's education.

2- Delfi: a fully automated and tailored investment agent that invests and manages the assets without the user ever losing the custody of his/ her capital. We donate 1% of the profits generated fr om all the funds managed for children's causes. Everyone contributes. To use this solution it’s not required to be banked, to have a minimum capital to start or previous financial knowledge.

3- Educational section, wh ere the user learns about personal finance, cryptocurrencies and investing. It has trivia quizzes for the user to earn points that helps him/ her to be eligible for receiving donations from other users.

4- Donation network: users have the option to financially support other users (P2P) or to support different children’s causes by donating their capital or the profits regularly gained by Delfi.

With our solution, millions of people are able to plan and manage their wealth to achieve their goals, contributing to the development of a culture of savings and promoting financial education among children and young people, helping to break the intergenerational and structural cycles of poverty in middle and low income families.

Competitors

Top 3 local competitors based on size, market position, national reach, and customer base

AlgoBot https://www.algobot.xyz/
AlgoBot is one of Xcapit's main competitors at the local level, although it is still in the Beta stage, growing by word of mouth, without investing in growth strategies yet. The current functionalities are similar to those we develop in our MVP: it works through API, the investor can choose the risk profile and it is 100% automated.

Quiena https://www.quiena.com/
Although it does not include options to invest in cryptocurrencies, Quiena gives access to small and medium Latin American savers to invest in international financial markets.

Wealthbot- http://wealthbot.io/
Wealthbot is an open source wealth management platform that allows registered investment advisers to cater to average investors. Provides relevant services for investment advisers and wealth management companies of all sizes. Wealthbot is customizable and completely owned by its users.


3 main competitors in Latin America

SeSocio https://www.sesocio.com/
SeSocio is an investment marketplace that connects entrepreneurs looking to finance their projects with people who want to invest. They have investment options in Real Estate, Agribusiness, Franchises and other markets. In addition, it is a potential competitor of our ChangeU project, since it also offers the possibility of making donations.

Fintual https://fintual.cl/
It offers investment options in mutual funds that the company creates and that invest in ETFs and national fixed income funds. It is the competence of our ChangeU product, since it gives the user the possibility of setting savings and investment objectives.

SoFi - https://www.sofi.com/
SoFi is aimed at younger investors who are concerned about fees and may not have a lot of capital yet. Overall, the platform is a robust, albeit generic, algorithmic approach to managing a portfolio according to modern portfolio theory (MPT) using exchange-traded funds (ETFs). Excellent goal planning tool. There are no management fees and they provide low or no commission options in terms of portfolio content.


3 main competitors in Europe

Betterment - https://www.betterment.com/
Recommend a portfolio and automate the investment process. The user receives recommendations based on their investment objectives.

3commas https://3commas.io/es/about
3commas offers automated trading tools. It is used all over the world: USA, Europe, Asia, Africa, Australia and Oceania. It has a high access barrier, due to the initial costs: from 15 to 100 dollars a month.

Cryptohopper https://www.cryptohopper.com/
Cryptohopper has a strong position in Europe. It is a non-custodial cryptocurrency investment bot, similar to what we are doing, but without a focus on financial education.

Advantages or differentiators

Key differentiators

Unlike the listed competitors, our solution has a social purpose.

Some only offer products for people with a postal address in the US Our product has no borders, it is independent of the country of residence.
The user loses custody of their assets in most of the listed competitors. In our case it does not lose it.

Betterment, for example, charges administration fees, we only charge if the user has profit. Others charge monthly flat rates. We only if there are profits, 20% of it.

In general, the user must have a general bank account. It is not necessary in our solution.

Wealth managers do not offer cryptocurrency investments.

Crypto platforms do not offer an automated bot with dynamic strategies, rather the user must be knowledgeable to set it up. In general, the investment options are limited to choosing a portfolio and rebalancing automatically in contrast to our solution that involves active strategies according to market changes. Our algorithms are awake and are always learning from the market

Wealthbot, for example, is decentralized, it does not ask for custody, but it is not easy to install and use, it requires computer skills. Wealthbot is hosted on the open source coding website GitHub, while the main software is free and open source, the correct installation of the program will require more than a little technical knowledge.

Those that communicate educational content are aimed at an older and financially educated audience, not teenagers and young people. There is no stimulus program for users to learn.

No one has the possibility to donate or receive donations.

Finance

We charge a gains fee only: 20% fee of gains realized by using our solution for managing their portfolio, charged monthly. Of the 20% commission charged, 1% will be donated by the company to support children's causes, and the remaining 19% will be revenue for the company.
And for some users, assets fee only: 1% per annum of the assets under management of the application, charged daily, for those users that are donating the profit or capital of their funds. If the user is donating, we also donate the commission. The assets fee is charged to sustain the company’s expenses.
More information in: https://docs.google.com/document/d/1PC0OcNErDeEHkWmP_nSGtopnyAtG1fblVgRPo31SFJE/edit?usp=sharing

Business model

Our unique Selling Proposition: Purpose driven investment, automated, transparent and easy for everyone starting from a capital as low as 30 USD.

Our customers: low and middle-low income millennials who want to manage their own financial life, educate themselves and improve their economic situation. And, high and middle-high income baby boomers who want to make purpose driven investments to contribute to society

Our value proposition: a decentralized mobile application for financial planning, learning while playing, automated investments and transparent donation. We reduce the complexity of financially planning, of investing their own money and the distrust in the current donation system. We give them tools for their personal development to improve their economic situation and we enable middle-income people to donate and get involved with social causes without decreasing their capital.

Customer relationships
Customer self-service with automated processes.
Communities
Long-term
Aimed to acquire customers

Channels:
Digital channels
Ambassadors and communities

Key partners:
Melon Protocol & Yearn (for fund management and our investment product)
Etermax (for the educational trivias)
OpenZeppelin (for providing security)

Key resources:
Cloud architecture

Key activities:
Product development


Revenue streams:
Gains Fee only: 20% fee of gains realized by using our solution for managing their portfolio, charged monthly. Of the 20% commission charged, 1% will be donated by the company, and the remaining 19% will be revenue for the company.
Assets Fee only: 1% per annum of the assets under management of the application, charged daily, for those users that are donating the profit or capital of their funds. If the user is donating, we also donate the commission. The assets fee is charged to sustain the company’s expenses.

Cost structure:
Marketing and selling expenses, CAC: 3 USD/User in 2021 and 5 USD/user in 2022
Product development
Customer support

Money will be spent on

MVP Dapp development
Integration with Melon protocol, Yearn
APP design UX/UI.
Insurtech
Marketing Campaign

Offer for investor

Valuation USD 11 M
Seed round 1M

Team or Management

Risks


Low propensity to save in children, youth and families from low-income sectors. Accessibility risk and understanding of terms and concepts related to the world of finance.
Hacking risk. Decentralized finance architectures are composable and overlap in layers. A security flaw in one of the layers could put people's capital at risk.
Risk of loss in investment management. Due to the volatility in the management of cryptocurrencies, the possibility of profit is high but it also exposes the user to potential losses at different market moments if only traditional crypto assets are rebalanced.

Incubation/Acceleration programs accomplishment

Incubated by the Founder Insitute

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