Vous êtes sur la page 1sur 49

SME Financing is the Key Driver for

ACU Token Price Appreciation

May 2018
Acudeen's ACU token provides an opportunity for investors to benefit from growth
in blockchain-powered lending to small and medium enterprises (SMEs) across
Southeast Asia. While large companies are easily able to obtain financing when
waiting for client invoices to be paid, most SMEs face a nerve-wracking cash flow
situation when they must wait for customers to pay invoices. These SMEs aren't
served by traditional banks or lenders due to the high cost of serving a large variety
of SMEs with traditional banking processes, and thus SMEs can face the risk of
severe cash crunches simply while waiting for invoice to be paid. Delayed payment
of customer invoices and the cash constraints it can cause is frequently cited as one
the top concerns for SMEs.

Acudeen aims to solve this problem, expanding the market for SME short-term
lending where traditional banks have failed thanks to the creation of a peer-to-peer
(P2P) invoice finance ecosystem called “AssetChain Core”.

AssetChain Core will be powered by blockchain and an innovative crypto-currency


based incentives system. It leverages the capabilities of blockchain and
cryptocurrency to enable a P2P market place for SMES to sell their invoices to
investors to receive cash quickly, transaction oversight & validation for security, and
rapid funds transfer by using cryptocurrency instead of a traditional bank transfer
system. Underpinning this entire SME financing ecosystem will be the ACU token as
the only means of payment for services, and as a mechanism for incentivizing and
rewarding all participants.

Acudeen already has a live platform for SME Invoice Financing, which we can also
refer to as Moveable Assets Financing. Moveable Assets are assets on the balance
sheet which aren’t property, such as accounts receivable from invoices. Also called
“Factoring”, Moveable Assets Financing allows SMEs to receive cash for their

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
1
customer invoices before their customers have paid. The buyers of the invoice
receive a financial return by buying the invoices at a discount to their face value, in
return for providing cash to the SME quickly.

Acudeen has a non-blockchain based service already operational in the Philippines


and Myanmar, which the company plans to convert to its blockchain-based
AssetChain Core, and plans to launch in Indonesia, Vietnam, Thailand, and Malaysia
in 2019.

Acudeen is selling ACU tokens to fund the development of a blockchain-based


version of its already proven platform. ACU tokens will be the only method of
payment accepted on Acudeen's new blockchain-based system, and total ACU token
supply will be fixed at 10 billion tokens. Hence ACU token investors can be expected
to experience an increase in their tokens' value as the total volume of SME invoice
financing on Acudeen's platform grows, not just in the initial markets of the
Philippines and Myanmar but also later in other Southeast Asian countries as
Acudeen expands regionally.

Since the ACU token supply will be fixed in total amount, higher demand for tokens
from expanding SME lending on Acudeen’s platform should lead to price increases
for ACU tokens, all else equal. (Fixed long-term supply vs. rising long-term demand)
We also have identified factors which could shrink the available liquid supply of
tokens in the market, further supporting ACU’s market price. This is detailed in the
Token Economics section of this report.

Acudeen’s aims for its blockchain-powered platform to provide invoice financing to


10% of the market across six countries in Southeast Asia, however in this report we
estimate 5% market share by FY2023 for all markets except their home market of
Philippines where we estimate 7% by FY2023. We use established monetary theory
to value the utility of cryptocurrencies, and in doing so the value of a token such as
ACU. Based on our ACU Economic Model, we estimate that ACU can achieve a
market price of $0.054 in FY2023 based on demand resulting from use of the

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
2
AssetChain Core platform, compared to ACU’s upcoming public sale ICO price of
$0.01. We however stress that cryptocurrencies can be extremely volatile and
subject to speculative supply/demand forces which we do not model. Our model is
meant to only serve as a framework for understanding the economics behind ACU
and does not constitute a recommendation nor a guaranteed valuation that the
token will achieve. Details behind this estimate can be found in the Token
Economics section of this report.

We believe that the lending space Acudeen is targeting, Moveable Asset Financing
for SMEs, provides one of the most compelling cases for blockchain to disrupt an
industry by introducing game-changing efficiencies compared to the traditional
banking system or even non-blockchain based startups’ platforms. It’s no surprise to
us that one of the largest and most successful cryptocurrencies to date is XRP
(Ripple), and XRP is based on a solution for international funds transfer. Acudeen is
also essentially building a funds transfer ecosystem, albeit one based on buying
invoice at a discount.

Acudeen’s system will use the ACU token for payments but will also leverage the
Stellar network and its Stellar “Lumen” token (XLM) for value transfer between SMEs
and invoice buyers (investors). Stellar was started in 2014 when a Ripple founder left
Ripple to create a funds transfer token specifically tailored to promoting financial
inclusion for world’s unbanked. As such, Acudeen and its ACU token is leveraging
the Stellar platform to expand financial inclusion via Moveable Asset Financing for
Southeast Asia’s “unbanked SMEs”.

The high cost of validating, issuing, and tracking small loans in a traditional banking
system is what has prevented SMEs in developing nations from being served by
traditional finance. Hence just as Ripple’s XRP and Stellar’s XLM are massively
streamlining money transfers, Acudeen’s ACU will massively streamline invoice
financing for SMEs, which in effect is just a more complex form of money transfer
between an invoice buyer and an invoice seller.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
3
By using the Stellar Network, Acudeen’s platform will be able to reduce the
complexity, cost, and friction when it comes to transferring funds between countries
in Southeast Asia.

The need for blockchain to revolutionize Moveable Asset Financing is without a


doubt in our view due to the massive efficiencies it brings when compared to
traditional banking systems. The more relevant question for the industry is thus
“Who will successfully create the most popular blockchain-based platforms?”

After a review of the competitive landscape, we find Acudeen and its ACU token well
placed to lead in Southeast Asia. Regional competitors aren’t blockchain-based or
are focusing on other segments of SME financing. Acudeen is particularly unique in
its focus on the underbanked SME invoice financing in emerging economies, instead
of targeting the “easier” SMEs in countries such as Singapore or Hong Kong.
Acudeen is also building an ambitious ACU-powered SME finance ecosystem, which
is a step change from even the existing online P2P matching platforms some
startups have created.

Acudeen’s leadership in Southeast Asia is by no means guaranteed; much will come


down to execution as the company rolls out across the region. However, based on
our competitive analysis and a review of the company’s underlying platform, we find
the company well placed as a contender to lead Southeast Asia’s SME finance
revolution over the next five years.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
4
In addition to the company’s market potential and technology platform, we also
note that the company has extensive management experience and industry backing
behind it. Two of Acudeen’s founders are alumni of the California-headquartered
Founder Institute and the company has received financial support from 500
Startups. Acudeen was also the 2017 winner of Seedstars World in Switzerland,
winning a $500,000 equity investment.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
5
We have organized this report according to the five key factors that will drive an
increase in the price of the ACU token. As such, this report is ACU-token focused
rather than Acudeen-focused. It’s designed as a framework for an ACU token holder
or potential token holder to transparently judge the prospects for the ACU token
demand. This report does not constitute a recommendation to buy or sell the ACU
token. Rather, it is provided as a source of transparency and information so that the
reader is better informed to make their own decisions.

An important point for us to make is that demand for a token can come from many
sources. Primarily, where a token is used within a system to perform some function,
such as ACU being used for payments within Acudeen’s platform, there is “utility-
based demand” for the token. (demand that arises from users of the platform
requiring the ACU token to use the platform). However, there will also be other
sources of ACU token demand, such as speculative financial demand, i.e. demand
for the ACU token by financial investors and speculators who are expecting to trade
a price increase in ACU.

In this report we primarily aim to analyze the potential for utility-based demand for
ACU, as this type of token demand is the most fundamentally sound source of value
for a token in the long-term. If a token’s utility-based demand is expected to grow
over the longer term then we can be confident that while speculative trading
demand may come and go, the long-term trajectory for the token should be
upwards. (As long as the maximum supply of tokens possible is fixed or its growth
significantly limited) If however, platform take-up is weak and usage-based demand
doesn’t grow, then confidence in a token could be impacted and the token price
could decline.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
6
Below is a summary of our Five Factor Analysis of ACU, analyzing the potential for
token price appreciation across the following key success factors:

1. Token Economics: How is demand for the token generated vs. supply
available? Here we detail our Token Economic Model and quantify estimates
for potential token prices as a token’s platform grows.
2. Platform Potential: How compelling is the platform which the token
supports? Better designed platforms should lead to higher token usage.
3. Market Potential: What is the market potential for the need that the ACU
token serves? The larger the unaddressed need that a token supports, the
higher its chances for usage.
4. Community Support: How can the company successfully build supporter
networks and a vibrant token community? Strong industry recognition helps
promote a token and its platform, increasing the potential usage.
5. Team: What expertise and experience does the token have behind it? Even
the best solution can’t succeed without strong execution. Better
management teams are more likely to succeed and attract more token
interest.

Using the above framework, we’ve summarized Acudeen’s key success factors
below:

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
7
Token Long-term supply of ACU is fixed, without any means for mining
Economics additional tokens. Meanwhile, the ACU token has a clear utility
value, being the only means of payment on Acudeen’s platform.
With fixed supply and clear utility demand based on platform
usage, ACU’s price can increase over the long-term if platform
usage increases, all else equal.

Platform We believe Acudeen’s choice to use the blockchain technologies


Potential Stellar and Hyperledger is valid for what Acudeen is building, i.e. a
highly efficient ecosystem for invoice financing for
unbanked/underbanked SMEs. With proper execution, we see no
reason why ACU’s ecosystem can’t become a world-class platform
and scalable to any geography.

Market Potential There is a massive unmet need whereby SMEs are unable to
access invoice financing, and SMEs represent 40%+ of most
countries’ GDP. Blockchain is widely recognized as a
transformative opportunity for SME financing, particularly for
invoice financing thanks to its ability to verify invoices and prevent
fraud at an efficient cost-per-transaction even for very small
financing transactions. The question isn’t “if” blockchain will
revolutionize this industry, it’s simply “who” will do it. Acudeen
seems well placed as a leading contender.

Community Acudeen has access to an influential network in the tech startup


Support space thanks to the founders’ connections with Founders Institute
and the company having won Seedstars World in 2017. A key
metric to watch will be the company’s ability to build a vibrant
community for the ACU token, which is still yet to be proven.

Team Acudeen has strong management with relevant business and


technology experience, including two Founders Institute alumni
and executives with listed company experience. An extensive
advisory board complements Acudeen’s full-time management.
Acudeen may need to add influential people in each of the
countries it operates in however, as is the nature of Southeast
Asian business.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
8
We use monetary theory to estimate the utility value of ACU. We first calculate the
total value of Moveable Assets Financed (aka SME invoices financed) by the Acudeen
platform based on different market share scenarios across Southeast Asia; 2.5%,
5%, 7.5%, management’s target of 10%, then 12.5% as an upside case. We also
examine the potential ACU IRR for growth through FY2023.

We apply these target market shares to each country, to find out what would be the
total value of Moveable Assets that would be financed via Acudeen’s platform if they
hit a certain market share across the region. Hence, we calculate what would be the
amount of Moveable Assets financed if Acudeen hits 2.5% in all five Southeast Asian
markets, 5% in all five, 10% in all five, etc.

We then calculate the total value of fees that would need to be paid in ACU for a
given Moveable Assets amount, including the many forms of payment where ACU
would be required. These include the fees below.

• Annual KYC Registration Fee


• Listing Fee
• Tech Fee for Invoice Seller
• Tech Fee for Invoice Buyer
• Asset Assignment Fee

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
9
Source: Acudeen Whitepaper

Please refer to the figure above as a reference for this user journey description.

• Seller Pays ACU to Register an Invoice. Acudeen’s movable assets


ecosystem begins when an Invoice Seller (often an SME in need of cash)
registers an invoice onto the platform. When this happens, Acudeen charges
the SME ACU tokens as a fee for using the platform.
• Validator is Paid ACU to Verify the Invoice. From there, a validator verifies
the authenticity of the registered invoice to ensure quality on Acudeen’s
platform. The validator is also compensated in ACU token for his services.
• Funders (Lenders) Pay a Fee in ACU When They Successfully Fund an
Invoice. Once validated, Invoice Funders (investors) place bids on the listed
invoice, with the highest bidder winning the invoice. The funder then pays
ACU tokens as a fee for the ownership transfer.
• Collecting Agent Paid ACU Upon Maturity of Invoice. Upon maturity of the
invoice, a collector claims the receivable value on behalf of the Invoice
Funder and delivers the payment. The collector is then paid in ACU tokens
for services rendered.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
10
As seen in the above Use Case, ACU tokens are necessary in almost every process,
and serve as a fee for Invoice Sellers and Funders, while serving as an incentive to
Invoice Validators and Collectors. Management’s goal is to support token usage
velocity within a healthy range that encourages long term price appreciation as ACU
demand rises from higher lending transactions in the system leading to higher ACU
token usage.

The sum of the US dollar of all the fees above equals the total value of ACU coins
required from users of the system. This is what we refer to as the “GDP” of the ACU
Economy. The GDP of the ACU economy can also be thought of as the total number
of Moveable Assets financed in a year multiplied by the US$ value of ACU that must
be paid in fees for each Moveable Asset on average.

The monetary equation we use is the same as could be used to value a currency
based on economic demand (excluding speculators).

This equation is MV = PQ where:

• M = the value of the monetary base required by the currency’s economy


• V = the velocity of the currency, i.e. how many times a single unit of currency
changes hands in a year
• PQ = the GDP of the currency’s economy

Once we have calculated “M”, the monetary base of ACU required, we can then
arrive at the price required per ACU token by simply dividing M by the available
supply of ACU tokens.

The layman’s logic behind this equation is simply: If at any time the ACU Economy
requires $100 of payments using ACU (Monetary Base Required, or “M”), and there
are 10 ACU Tokens circulating in the trading market (Available supply of liquid
tokens), then the price of each token must be $10 ($100/10) for the supply of ten
tokens to satisfy the $100 demand for payments usage.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
11
It’s important to note that this valuation framework doesn’t incorporate any
speculative demand for ACU tokens; it only includes utility-based demand for ACU
tokens when someone needs an ACU token to pay for a service they wish to execute
on Acudeen’s platform.

As in traditional finance valuations for equities, bonds, or derivatives, it’s important


to make clear that any mathematical valuation is subject to estimation error.
Fundamental value is also not always reflected in daily market prices due to
speculative demand and market swings between irrational exuberance and
excessive fear. However, we believe that fundamental value can act as an anchor for
the market price over the long-term. Hence while speculative swings may push a
token to much higher or lower prices for periods of time, the swinging price should
be tethered to the underlying usage value of the token. If there is a rising real need
for people to use the ACU token to buy or sell SME invoices, then this will lead to
rising real demand to buy ACU tokens in the market. It’s this real demand and the
token price as a result that we estimate as a guide to understanding ACU.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
12
As shown below, if Acudeen can achieve its 10% market share target for the five
major Southeast Asian economics of Philippines, Indonesia, Thailand, Malaysia,
Vietnam, and Myanmar, then this should equate to demand for ACU tokens that
would support a price of US$0.151 per ACU token. This is significantly higher than
the planned US$0.01 public sale ICO price but also would require many years of
successful execution and face significant uncertainty as to when and how the
company would achieve such a market share across five countries.

However, we estimate that even if Acudeen only achieves lower market share, such
as 7.5% in each market, then the ACU token should still be able to achieve a price of
US$0.0113 in the market from usage demand alone. Rather than focusing on a
precision of the ACU price estimate, we believe the greater point our model makes
is that there will be an exponential relationship between ACU’s potential utility value
and the market share Acudeen can achieve. This can be seen in the table below,
where the resulting utility value of ACU rises dramatically faster even if market share
just increases linearly.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
13
Source: Blockspeed Estimates

It’s important to note that available liquid token supply in the market and token
velocity (the frequency at which a single token is used for transactions in a year) will
be two key variables that could cause our utility value estimates to vary significantly.

A maximum of 10 billion ACU tokens will be created, of which 55% will be sold in
ACU’s private and public sales. 5% of tokens will be distributed in ACU’s bounty and
referral activities while 15% will be distributed to Acudeen’s founders, employees,
advisors, and other supporting parties. The remaining 25% of total ACU tokens will
be held by Acudeen as a reserve to provide initial liquidity and to fund future
development, 10% of which will be locked up for three years.

Hence, there will be a fixed long-term quantity of ACU tokens, which is important for
ensuring market confidence in the long-term price appreciation trajectory for ACU
tokens (Assuming financing volume on Acudeen’s system rises over time).

We model a ‘maximum-case’ token supply, assuming a full 55% sold in private and
public sales by FY2019, plus 5% released via bounty and referrals with all founder,
employee, advisor tokens released by end of FY2020. We then assume Acudeen
sells its 25% held tokens over three years, starting from the end of this pool’s three-

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
14
year lockup. The result is the token total supply estimates as shown below, rising to
the full 10 billion ACU tokens by FY2023.

We note an interesting potential dynamic that could drive up ACU’s price as the
platform grows. In addition to token demand caused by fees that must be paid in
ACU for usage of Acudeen’s AssetChain Core platform, Assetchain Core participants
will be required to maintain an ACU wallet if they wish to use the platform and this
wallet will have a minimum balance. This means that participants will need to
maintain some small residual balance of ACU tokens on average over the course of
a year.

While on a per-user basis this balance could be very small, our model indicates that
this floating residual wallet balance could remove a substantial number of tokens
from the liquid available ACU token supply in the market as platform usage grows.

If we assume just 5,000 ACU tokens held as a residual balance per user on average,
which equates to just US$50 of residual value based on ACU’s upcoming public ICO
price of $0.01, then our model shows that as usage grows, the amount of ACU’s
taken out of the liquid market could rise to substantial percentage of total ACU
tokens created.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
15
For example, if Acudeen takes 2.5% market share of each market and has 683,460
users, then this implies that residual wallet balances could remove 3.4 billion tokens
from the available ACU in the liquid market. At 5% market share and 1.4 million
users, a whopping 6.8 billion tokens could be carried in wallet balances, and at
higher levels of users something would have to change in the wallet balance
dyanmics else there simply wouldn’t be enough tokens in the market. In reality, we
would expect that ACU price would increase and this would incentivize users to hold
fewer tokens as residual balance in their wallet.

In the table below we show the above, i.e. how a rising userbase can reduce the
actual token supply available in the market, we assume 5,000 ACU tokens held as
residual balance per user, until 7.5% market share onwards where we reduce the
residual balance to reflect the likely situation whereby ACU token price would be
higher as a result of limited supply, reducing the amount of ACU’s each user holds
as a residual balance. The underlying point is that residual wallet balances are
likely to cause ACU price appreciation if the Assetchain Core user base grows.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
16
It’s important to note that the calculations above have substantial potential
forecasting error since they must assume the number of invoices financed and the
number of invoices transacting in the system per user; two variables which are best-
guesses for our analysis at this stage.

Our point in the above calculation is not to claim a precise estimate of future
available token supply but rather to convey the substantial impact residual wallet
balances could have on reducing the supply of available ACU in the market and
hence supporting a higher price for ACU tokens as demand for ACU, needed to pay
for invoice financing services, rises. While the total ACU created is fixed at 10 billion
tokens, the total amount of tokens available in the market at any one time could be
much lower.

Since Acudeen will be receiving ACU as payment for usage of the AssetChain Core
platform, the company will have the ability to manage the speed at which it decides
to sell ACU back into the market to those seeking to pay for additional invoice
financing. The company plans to help maintain a healthy ACU price by modulating
the speed at which is sells ACU tokens back into the market through the

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
17
management of a “Velocity Control Pool”, aimed at keeping token velocity between
four and eight times. (A token changing hands four to eight times in a year.)

Acudeen has however capped such token velocity control activities at one billion
ACU tokens, meaning that the company will only hold back a maximum of one
billion ACU tokens at any one time from being sold back into the market.

By this method, Acudeen will be able to help create supportive monetary dynamics
for ACU price appreciation, both by reducing the effective supply of ACU tokens
available in the market at a given point in time and also by being able to help
moderate token velocity to a level that supports ACU’s long-term price appreciation.

We believe the presence of a velocity control strategy is a positive for ACU, allowing
Acudeen a tool to help promote ACU’s long-term price appreciation and success. As
is the case with traditional currencies, the ACU market will probably be best served
by prudent use of the velocity pool to prevent extreme price volatility, both on the
upside and downside, and aim for long-term steady price appreciation of ACU.

Ultimately, it’s in every participants best interest that the ACU token appreciates
over the long-term given that participants will be holding ACU balances and
platform fees paid will be paid with ACU but set at a fixed price in fiat currency.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
18
Below we provide example forecasts, showing how ACU could achieve a 2023 utility
value of US$0.054 if the company can achieve country market shares as outlined
below and users are each holding residual wallet balances of 5,000 ACU on average.
This implies an expected annual IRR of 36% from ACU’s ICO price of $0.01.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
19
We see no reason why Acudeen’s AssetChain Core platform can’t become a world
class solution for SME invoice financing. This is because Acudeen appears to have
chosen underlying solutions that are backed by significant industry players, meet
the objectives of the solution they are creating, and should be scalable to any
geography. The system will also be expandable to incorporate additional value-
added services via integration with third party service providers.

Acudeen is currently in the process of building their blockchain-powered platform


for moveable asset financing, which they have named “AssetChain Core”. Three key
characteristics of this platform are that it:

1. Leverages the Stellar Network for asset value transfers


2. Utilizes Hyperledger Fabric as a blockchain framework
3. Uses the ACU token for payments and incentives in the AssetChain economy

Source: Acudeen Whitepaper

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
20
Central to their platform’s operations is management’s choice to leverage the Stellar
Network and the Hyperledger Fabric as backbone frameworks to manage Acudeen’s
fund transfers and identity management respectively.

Source: Acudeen Whitepaper

In our view, management’s choice to build on top of the Stellar Network and the
Hyperledger Fabric was a prudent decision as both networks are widely used by
major companies, have strong institutional partnerships, and are a good fit for
Acudeen’s business purposes.

The Stellar Network, for example, is partnered with multiple industry blue chips
such as IBM, Deloitte, and Stripe, while the Hyperledger Fabric has been developed
by IBM in collaboration with other partners. Both solutions have extensive use cases
and have reached significant market adoption.

The Stellar Network connects banks, payment systems, and consumers to make
payment transactions faster, more reliable, and cheaper. It was founded by one of
Ripple’s founders in 2014, as a Ripple-inspired solution focused on promoting
financial inclusion in emerging economies.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
21
Stellar, through its digital token Lumen (“XLM”), enables cross-border payments on
its decentralized network that resolves payments within a claimed “2 to 5 seconds”.

Acudeen will leverage Stellar to power all its funds management and asset transfer
needs. By riding off the Stellar Network, Acudeen can efficiently and quickly transfer
movable assets across multiple parties in a matter of seconds regardless of region
or different currencies.

Stellar achieves efficient and low-cost cross-border transactions through the usage
of “Stellar Anchors”, entities that act as bridges between a given currency and the
Stellar network. Examples of “Stellar Anchors” would include banks and payment
processors, who are institutions trusted to hold an individual’s fiat cash and honor
withdrawals.

Source: Stellar

In our view, Acudeen’s choice to use the Stellar Network over alternative protocols
(such as Ripple) to manage their fund transfers was an apt decision for two main
reasons:

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
22
The Stellar Network was co-founded by Jed McCaleb, former founder of Ripple Labs.
While both Stellar and Ripple aim to make fund transfers faster, more reliable, and
cheaper, Ripple is arguably a far more centralized system due to running a
permissioned ledger (where Ripple Labs itself has a degree of control on freezing
and reversing transactions), and the concentration of coins held by Ripple Labs.

In contrast to this, Stellar uses an open ledger that anyone can view, access, or join.
This means that on the Stellar network, it is far less likely for any single party to
exert a material or substantial influence on the entire ecosystem. This is an
important factor when building your own platform, as you want to ensure that a
third party such as Ripple can’t drastically influence your platform’s performance.

In contrast with Ripple, the Stellar Network is a non-profit organization aimed at


aiding the unbanked and underbanked regions. Whereas Ripple is designed to build
a strong network of banks in its ecosystem, the Stellar Network is an open protocol
specifically designed to promote financial inclusion in emerging markets.

We believe this is inherently a better fit for Acudeen due to the Company’s goal of
providing liquidity to SMEs in emerging markets like Philippines and Myanmar
where financing solutions are scarce. The fact that the Stellar Network is a non-
profit organization also provides a degree protection from any excessive fees being
implemented for using Stellar in the future.

The Hyperledger Fabric is a business blockchain framework designed to be a


foundation for developing other blockchain applications with a modular
architecture. The framework allows components such as consensus and
membership services to be “plug-and-play”. Whereas Acudeen uses Stellar to
manage its fund transfers, Hyperledger Fabric is used to manage the ecosystem’s
membership and identity functions.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
23
In our view, management’s choice to use Hyperledger Fabric over other blockchain
frameworks (such as Ethereum) for the platform’s identity management provides
several key benefits:

• Permissioned Network Allows for Privacy. Hyperledger Fabric can operate


as a permissioned network rather than making all information publicly
available. It provides collectively defined membership and access rights
within business networks, which helps protect the privacy of users’
information.

“Businesses, due to competitiveness, protection laws, and regulation on


confidentiality of personal data dictate the need for privacy of certain data
elements, which can be achieved through data partitioning on the blockchain.
Channels, supported in Hyperledger Fabric, allow for data to go to only the
parties that need to know.” - IBM

This is a key consideration if one wants SMEs to upload their invoice


information, which includes customer and pricing information, with
confidence.

• Confidential Transactions Protects Business Intelligence. Hyperledger


Fabric enables businesses to make transactions visible to only select parties
with the correct encryption keys. This is useful for firms looking to avoid
business intelligence leaking to third parties or competitors.

• No Mining or Expensive Computations Required. Unlike other blockchain


frameworks such as Bitcoin or Ethereum, no mining or expensive
computations are required to assure transactions on Hyperledger Fabric.
Hyperledger allows Acudeen to build a blockchain architecture that doesn’t
need to be linked to the Ethereum.

• Programmable and Customizable for 3rd Parties. Hyperledger Fabric


leverages the embedded logic in smart contracts to automate processes
across the network. Notably, due to its modular architecture, 3rd parties like
Acudeen can easily plug in their own preferred or customized
implementations into the framework. IBM is developing Hyperledger to be
optimized for this.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
24
ACU is Acudeen’s utility token, which must be used by all participants of the
Acudeen ecosystem. It is the only means to pay for services on the Acudeen
marketplace and serves both a “payment” and “incentive” function. Participants will
also be incentivized to hold minimum balances of ACU in their wallet or “stake”
quantities of ACUs to receive special benefits.

We believe that management’s creation of the ACU token is a major advantage for
the platform as it drastically reduces transaction costs by cutting out middle men,
minimizes failure rates, and boosts processing speeds. This is due to the Acudeen
ecosystem’s usage of a distributed ledger that ensures the consistency & security of
transactions on the platform.

Source: Acudeen Whitepaper

Importantly, we view the ACU token as instrumental in enabling a highly scalable


and thriving blockchain ecosystem as it incentivizes 3rd parties to become involved
in every facet of the platform. Rather than individually making partnerships to fulfill
each role in the ecosystem, ACU can be used as an incentivizing tool for many
ancillary roles such as asset validation, asset collection, credit risk assessing, and
insuring. By creating an ACU and blockchain-based ecosystem, rather than a

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
25
traditional centralized software system, AssetChain Core is ready to scale rapidly
with a multitude of 3rd party service providers across different geographies.

Notably, as the Acudeen platform grows, demand for ACU should only grow as
stakeholders increasingly require ACU to process transactions.

While ACU tokens are needed to create an incentives-based ecosystem that can
rapidly scale across geographies and with third party services, ACU tokens
themselves they will not serve as a “store of value” on Acudeen’s platform when
invoices are bought and sold. Given that ACU will be a traded cryptocurrency, ACU
could be prone to high price volatility, which causes unnecessary FX and payment
risks when transferring funds between SME invoice seller and investor invoice
buyer.

Hence for funds transfer and storage of value on AssetChain Core, Acudeen is
leveraging what’s known as “CryptoFIAT” to complement ACU tokens. CryptoFIAT is a
stable token that is 100% backed by underlying FIAT currency, which can be used to
transfer the value of assets within a blockchain-based ecosystem such as
AssetChain Core.

For example, CryptoUSD are tokens backed by real fiat US dollars held with a Stellar
Network anchor such as a bank. If an investor wishes to use US dollars to purchase
an invoice denominated in Philippines peso on AssetChain Core, the funder would:

1. Deposit US dollars with a Steller Anchor and receive CryptoUSD in return.


2. Deposit the CryptoUSD to Acudeen’s Assetchain Core, where it can be
exchanged for CryptoPesos in seconds.
3. CryptoPesos will be paid to the SME invoice seller, who can exchange these
CryptoPesos for fiat pesos (cash) via a Stellar Anchor such as a bank or
Acudeen itself once Acudeen becomes an approved Stellar Anchor.
4. When the invoice is paid, the funder will receive CryptoPeso via AssetChain
Core, which can be converted to CryptoUSD and then converted to fiat US
dollars (cash) via a Stellar Anchor, reversing the process the funder used to
deposit US dollars into the system.

This entire process can be done dramatically faster and with lower transaction cost
than is possible in the traditional banking system. Hence the use of CryptoFIAT
provides a highly efficient mechanism for funders and SME invoice sellers to

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
26
exchange value easily between each other irrespective of currency differences or
geographical and banking industry separation.

The process of utilizing CryptoFIAT and the Stellar Network is further outlined by the
Acudeen Whitepaper graphic below:

Source: Acudeen Whitepaper

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
27
Southeast Asia has about 1.9 million “larger” SMEs and over 60 million Micro SMEs
whose data tracking varies greatly country by country. 70% of tracked SMEs are
estimated to be either unbanked or under-banked and SMEs in Southeast Asia
represent over US$1 trillion of GDP output, accounting for 35 – 60% of the GDP of
each country. Despite the huge market SMEs in Southeast Asia represent, the
majority are ignored by the traditional banking system, experiencing little or no
access to credit.

Waiting for customers to pay invoices is a huge problem for most SMEs, who usually
have limited bargaining power versus larger customers and must accept delayed
payment terms that can run to 30, 60, or even 90 days after the time of sale. With
little access to bank credit, a late payment on a customer invoice can risk sinking an
entire SME simply due to cash timing mismatches. This is frequently cited as one of
the top three concerns for SMEs.

Hence, help bridging the gap between time of sale and time of payment by
customers is badly needed. While larger companies have been able to receive
invoice financing from traditional finance players, essentially being paid a discount
on their invoice value in return for being paid immediately, SMEs in Southeast Asia
mostly lack this channel of funding.

The traditional banking industry has underserved the massive SME market due to
the operational challenges it faces in terms of cost effectively serving and
performing due diligence on a huge and varied base of small companies whereby
each individual SME in isolation represents only a tiny revenue opportunity for a
bank. The cost of avoiding fraud and monitoring SMEs who have little available
financial data is usually too high to justify serving them. Under a traditional finance
company cost structure, administrative costs are too prohibitive to make a business

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
28
case of executing multitudes of small financing transactions with SMEs. Thus, most
SMEs in Southeast Asia are usually passed over.

Blockchain and distributed ledger technology offers to radically expand SME


financing in Southeast Asia by dramatically reducing the cost to authenticate,
finance, and service SMEs. Through automated verification of data authenticity,
strong privacy protection for SMEs confidential data, and the ability to transfer
money as fast a file can be send through the internet – all at low incremental cost
thanks to rules-based automation – blockchain-based systems offer to finally make
the financing of a multitude of tiny transactions with SMEs economically feasible.

This presents a huge “blue ocean” opportunity for new blockchain-based finance
players such as Acudeen, particularly when it comes to SME invoice financing.

For example, once an SME and a funder agree to the terms of an invoice financing
transaction on Acudeen’s platform, identity verification and invoice validation can
take place automatically thanks to the relevant information being held privately on a
blockchain. Independent nodes on the blockchain can then authorize the validity of
each step of processing the transaction with minimal need for human
administrative participation.

When human participation is required, third parties can be invited to provide the
service and paid in ACU tokens. Funds transfer and foreign exchange conversion
can also be executed using blockchain based systems such as Stellar, again with any
fees paid in tokens. A blockchain-based system with a token-incentivized economy
allows for a scalable, low cost SME financing platform unlike the world has ever
been able to produce even with cloud-based traditional software.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
29
Given the massive potential market that SME invoice financing offers, which we
estimate at US$350bn in major Southeast Asian countries alone, and the cost
efficiencies Blockchain can bring to the invoice financing process compared to
traditional banking, we believe it is inevitable that blockchain-based solutions will
disrupt the industry. It’s inevitable that blockchain will transform SME invoice
financing and the question is simply, “Which companies will succeed at serving this
underserved market?” We believe Acudeen is well placed as one of the lead
contenders for Southeast Asia.

Acudeen has already validated its business model in the Philippines where the
Company helped provide liquidity to over 400 SMEs to the amount of US$2.4m in
2017. The company has also already setup a Myanmar business, and plans to
launch in Vietnam, Indonesia, Malaysia, and Thailand within the next 18 months.

In 2017, Acudeen facilitated US$2.4m of invoice financing in the Philippines with a


centralized non-blockchain system, validating its business model in the country
ahead of the development of the company’s blockchain-based solution.

Acudeen’s home market represents a substantial business opportunity by itself.


SMEs account for 40% of Philippines GDP, or US$120bn of economic output, and we
estimate the country’s SMEs to have Moveable Assets of over US$40bn.

Access to financing for SMEs continues to be a serious concern among


entrepreneurs – consistently ranking as one of the top three problems SMEs face.
With efforts by the government to increase SME financing having had minimal
effectiveness, solutions by private companies such as Acudeen have been
encouraging.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
30
• SMEs: 100,000 (excluding Micro SMEs)
• Contribution to GDP: 40% (All)
• SME GDP Value: US$122 billion
• % Underserved: 60%
• Acudeen Status: Operational

Source: Blockspeed Estimates

A survey of 2,500 Myanmar SMEs by the German Institute for Development


Evaluation found that only about 20% of SMEs have obtained bank loans. Being a
lower income country, more than 90% of the financing for investment projects of
SMEs are financed internally due to their difficulty in obtaining loans and the lack of
knowledge and understanding among most SME owners about the loan application
process.

Although the government has developed a state-run Small and Medium Industrial
Development Bank (SMIDB), it is the one out of the only two banks that loans to the
country’s capital-starved SMEs. Also, as the bank has a limited amount of capital it
can loan to the SMEs, the number of recipients is limited. Thus, most SMEs operate
without loans.

There is a severe lack of financing options for SMEs in Myanmar, more so than in
any of the other major Southeast Asian markets. Moreover, given the country’s
undeveloped banking system, there exists an opportunity for a rapid take-up of
blockchain-based solutions, not just for the smaller SMEs, but also for mid-sized and
potentially large companies. The country’s less developed status and less developed
local bank sector creates a significant opportunity for a technology player such as
Acudeen to enter the market and rapidly fill the current financing void.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
31
• SMEs: 260,000 (excluding Micro SMEs)
• Contribution to GDP: 41.5% (All)
• SME GDP Value: US$28 billion
• % Underserved: 90%
• Acudeen Status: Operational

Source: Blockspeed Estimates

Indonesia’s economy is one of the most heavily weighted towards SMEs, with the
SME segment comprising 60% of the country’s total GDP. Combined with the fact
that it is also the largest economy in Southeast Asia, this makes it the largest
potential market opportunity for Acudeen by far. We estimate that SMEs alone
produce US$565bn of GDP.

As is the case with Myanmar, we believe that Indonesia’s relatively low level of
financial inclusion means that it could rapidly adopt digital blockchain based
solutions for finance, leap-frogging the need for traditional finance industries who
are entrenched in developed nations. For an Indonesian SME who has never been
served by a traditional bank, the idea of obtaining P2P invoice financing via a
smartphone may become a perfectly normal and standard form of financing a
business. This SME may never go to a traditional bank even once it is larger and
more successful.

There is a huge need for SME financing in the country. Most SMEs don’t have
sufficient collateral to secure a traditional bank loan or any verifiable financial track
record for lenders to evaluate. Geographical constraints also continue to pose a
challenge in a country like Indonesia, hindering people in rural and the eastern part
of the archipelago to obtain access to traditional bank services. Even the
government’s subsidized micro lending scheme (KUR) has had limited success due

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
32
to its lack of availability in many banks, restricting its availability to limited branches
that are mostly located in urban areas. Despite the government’s efforts to push for
greater ease for SMEs to obtain credit loans, banks have been reluctant to do so.

This is where Acudeen can fill the gap. Acudeen’s blockchain-based system can help
alleviate geographic constraints for the flow of capital to SMEs while also helping to
create verifiable financial records and information for invoice financers to use to
evaluate SMEs while at the same time maintaining privacy of information. With the
number of smartphone owners in Indonesia skyrocketing, outpacing traditional
banking penetration of the market, demand for a digital platform for invoice
financing could also be immense.

• SMEs: 590,000 (excluding Micro SMEs)


• Contribution to GDP: 60.6% (All)
• SME GDP Value: US$151 billion
• % Underserved: 85%
• Acudeen Status: Launch in 2019

Source: Blockspeed Estimates

Vietnam’s booming SME sector has shed some light on the lack of access to
financing for SMEs in Vietnam. Just like most countries in the ASEAN region, Vietnam
has a vibrant SME sector, where SMEs contribute approximately 48% of Vietnam’s
GDP and as they are mostly labor-intensive, they employ 77% of Vietnam’s labor
force. SMEs in Vietnam is seen to be a force to be reckoned with, contributing to
Vietnam’s economic growth as well as its employment.

However, SMEs continue to face substantial challenges when trying to obtain


financing. According to the Ministry of Planning and Investment, approximately 30%

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
33
of SMEs indicated that they could not get any financing from any financial
institutions, while another 30% only received their much-needed after facing
numerous difficulties in accessing the required funds. 87% of the SMEs have had
difficulties in mortgaging assets, 66% complained about high interest rates and
lending conditions, while 51% believed that lending procedures were complicated.

Once again, Acudeen’s solution offers an efficient mechanism for SMEs to receive
financing based on an objective analysis of their credit quality thanks to the
distributed and ACU token incentive-based nature of its peer-to-peer platform.

• SMES: 224,000 (Excluding Micro SMEs)


• Contribution to GDP: 41% (All)
• SME GDP Value: US$83 billion
• % Underserved: 60%
• Acudeen Status: Launch in 2019

Source: Blockspeed Estimates

Despite Malaysia’s vibrant SME landscape, the government has pointed out that lack
of access to capital and financing for SMEs has hindered their ability to flourish.
SMEs contribute about 40% of Malaysia’s GDP, playing a significant role in the
economy. However, the lack of deep pockets and accessibility to financing are often
roadblocks in the expansion plans of SMEs.

Though Malaysian SMEs might be at a better position in terms of obtaining financing


as compared to other countries, the Malaysia government has implied that it is
continuously looking to increase the number of funding options available to SMEs,
and sees alternative financing complementing the banking sector to finance SMEs.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
34
With a positive climate for more alternative financing options, Acudeen has the
opportunity to bring to Malaysia a more efficient method of obtaining the credit
SMEs need.

• SMES: 161,000 (Excluding Micro SMEs)


• Contribution to GDP: 40% (All)
• SME GDP Value: US$118 billion
• % Underserved: 50%
• Acudeen Status: Launch in 2019

Source: Blockspeed Estimates

SMEs in Thailand have relatively high access to bank credit with more than 50% of
SME financing coming from commercial banks, one of the highest rates in Asia.

Thailand has also achieved an SME loans-to-SME GDP ratio of 105%, which is
significantly higher than that of other countries in Asia. This is mainly due to the
many policies the government has implemented to ensure a continuous flow of
funding. Such policies include expanding the range of collateral eligible for loans to
include non-conventional items such as movable assets, making it easier for SMEs to
obtain the financing they require.

These policies might reduce the attractiveness of Acudeen in the Thai SME financing
market as many are already able to use movable assets as collateral in commercial
banks to obtain credit. However, we believe that Acudeen can still appeal to SMEs by
focusing on its niche and emphasizing its efficiency compared to that of banks due
to its highly digitalized processes.

Notably, even though Thailand is leading in the domain of SME lending, the market
still has much room for additional SME financing growth. According to a Deloitte

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
35
report, 90% of SMEs cited using their own savings to fund their operations while
only 54% cited using bank credit and 11% cited using other borrowings. 58% of
SMEs have no access to external financing 49% felt that they were unserved or
underserved.

• SMES: 644,000 (Excluding Micro SMEs)


• Contribution to GDP: 37% (All)
• SME GDP Value: US$151 billion
• % Underserved: 60%
• Acudeen Status: Launch in 2019

Source: Blockspeed Estimates

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
36
Peer-to-peer (P2P) lending to SMEs is a large opportunity globally, which has led to
the launch of many startups targeting the space. While the existence of similar
companies around the world represents a source of market competition for
Acudeen, we also believe it’s a strong vote of confidence that Acudeen’s business
model has been validated by the market.

The table below highlights selected competitors and peers we’ve identified in the
P2P SME finance sector, including both Southeast Asia-based companies as well as
select global names. What’s evident from our review of competitors is that nearly
everyone is new, with advances in cloud-based software connectivity only recently
enabling the online P2P SME finance business. Blockchain-based P2P SME finance is
an even newer development where essentially everyone is new to the game.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
37
Based on our review of competitors, we believe Acudeen is well positioned as a
contender to lead the P2P SME financing market for Southeast Asia, where regional
competition remains mostly non-blockchain-based and mostly focused on targeting
more sophisticated SMEs in markets such as Singapore or Hong Kong, where most
SMEs already have transparent records and bank accounts. Most competitors aren’t
focusing on the underbanked SMEs of Myanmar, Philippines, or Indonesia, for
example.

It’s interesting to note that Acudeen’s choice for second market to launch in was
Myanmar, instead of choosing Singapore where most of its regional competitors are
active and where financing SMEs is a more straight-forward process.

Blockchain’s benefits shine brightest when it comes to creating an economically-


viable financing solution for less sophisticated SMEs in less developed economies.
Thus, we find Acudeen differentiated not just by its lead in developing a blockchain-
based P2P SME financing platform for Southeast Asia, but also by the fact that the
company is developing a solution focused on solving the pain points of
underbanked SMEs in emerging economies.

Still, if Acudeen is to earn significant market share in Southeast Asia, it will need to
execute rapidly over the next few years. This is because the size of the market
opportunity is certain to attract additional competition, perhaps from existing
players pivoting their focus upon seeing Acudeen’s success. Acudeen has a head
start, but should move swiftly to establish itself regionally.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
38
Since the Company’s inception in 2017, Acudeen’s management has made major
strides in disrupting the financial services sector for SMEs. Because of its market
traction, the Company has garnered significant media attention, and has earned
multiple accolades from the finance, technology, and business sectors.

Some of Acudeen’s awards include being the Global Winner of Seedstars in 2017,
receiving Founder Institute’s Best Global Fintech in 2017, and being voted one of
IDC’s Top 10 Fastest Growing Fintech firms in the Philippines.

Notably, Acudeen is backed by famous venture capital firm 500startups. 500startups


is well known in the venture capital space for having backed some of the most
successful names in technology such as Grab, Twilio, Makerbot, Wildfire, and

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
39
Behance. The support of 500startups is significant for Acudeen not so much for the
capital, but more for the access to a powerful network for strategic counsel,
strategic partnerships, and credibility when pursuing additional investment from
other prominent venture capital funds in the future.

Acudeen founders Magellan Fetalino and Mario Salazar are both alumni of the
Founder Institute, which is one the best-known start up launch programs in the
world. In addition to the training it provides during its course, it’s also yet another
powerful network that can be tapped into as a company grows.

ACU is in the nascent stages of building a token community as of the date of this
report, given it is still before the conclusion of the token’s private sale period. At the
date of this report, ACU’s telegram channel (“AssetChain Token Sale”) had over 1,300
subscribers. We expect this figure to rise as the public sale is executed and
Acudeen’s community activities launch. However, creating a large and vibrant
telegram community will be a key milestone for Acudeen in the coming months.

You can join the ACU Telegram Channel here: t.me/AcuTokenGroup

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
40
Acudeen boasts a strong management team with a board of advisers composed of
several industry significant players. Since the Company’s inception, Acudeen has
grown from a five-man team to over 60 people spread across six countries.

Below, we highlight Acudeen’s top management and key executives, who collectively
have over 40 years of combined experience in technology development, finance,
data security, and digital media.

Mario Jordan "Magellan" Fetalino III is the Founder and CEO of Acudeen
Technologies. He has vast experience in business management, crafting business
strategies for two industry-awarded businesses in the Philippines and in Hong Kong
while also being a partner of Original Pitch Venture Capital.

Magellan has been featured frequently in tech and business media for Acudeen’s
achievements, acting as the face of the company, and is an alumnus of the famous
Founder Institute, a network of contacts he can tap on as the company grows.

Magellan holds positions as a member of the Board of Trustees of the Fintech


Alliance Philippines, and a Board Director of the Philippine Association for Digital
Commerce and Decentralized Industries (PADCDI).

He is currently completing his Masters in Entrepreneurship of the Ateneo Graduate


School of Business, Philippines.

Mario brings over a decade of experience in Remittance, Anti-Money Laundering,


Credit Application, and IOT.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
41
He is responsible for having created the technical vision of Acudeen and design
thinking behind the company’s Assetchain Core blockchain-based system in
development.

Before Acudeen, he led software development initiatives working at Philippine


National Bank, Accenture, and National Computer System (NCS) – a technical
solution provider to the Development Bank of Singapore.

Mario is also an alumnus of the world-famous Founder Institute.

Yacine oversees developing client relationships and strategic business partnerships


for Acudeen. He graduated from the European Business School and has worked for
Wendel Investissement and the Bank of New York Mellon.

JJ Atencio is the former president and chief executive of 8990 Holdings, one of the
largest housing developers in the Philippines. He thus brings significant listed
company experience to the company. He is also the founder of Januarius Holdings,
Inc and Original Pitch Venture Capital.

Mr. Atencio was appointed as chairman of Acudeen in 2018 to provide governance


oversight and guidance for the company.

Acudeen’s advisory board includes a mix of media, venture capital, fintech, and
regulatory experience. Key advisors include:

• Anthony Abad: Anchor for Bloomberg Philippines.


• Tridbodi Aruranondchai: Founder of Moneytable and limited partner of
Kejora Ventures.
• Gregor Arn: Fintech entrepreneur and ex-Accenture consultant.
• Simon Cocking: Editor in Chief of CryptoCoin.news.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
42
• Nizam Ismail: Former deputy director at the Monetary Authority of
Singapore.
• Adeo Ressi: CEO and founder of Founder Institute.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
43
Invoice factoring is a transaction where a party (Funder) purchases an invoice with
an outstanding receivable balance at a discounted price. In return, the Seller of the
invoice gets paid immediately and the Funder will be paid back after the invoice
matures and is settled by the Payor.

Invoice sellers are usually micro, small, and medium sized firms that do business
with more established corporations. These parties are often in need of liquidity due
to the time lag between sales and receivables.

Invoice funders purchase receivables from invoice sellers at a discount, and hold the
invoice until maturity. They are typically composed of individual investors and
institutions.

Invoice Payors are typically large corporations with more than 100 employees and
annual revenue of at least 10 million USD. They are obligated to settle invoices/
receivables at the maturity date.

Movable assets refer to all rights, interests, and benefits related to ownership of
items other than real estate. Items of personal property can be tangible, such as a
chattel, or intangible, such as a debt or patent.

Moveable Assets Financing is the process of turning moveable assets into collateral
to obtain financing.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
44
The Software Development Kit (SDK) provides interface to other actors to directly
connect with the AssetChain platform, which results in better decentralization.

The validator screens the uploaded invoices to ensure the validity of the product/
services rendered. The validator also verifies that invoice Payor acknowledges the
receivable to be paid at the maturity date.

Blockchain where information is shared with every participant

Blockchain that restricts certain information from being visible to non-involved


parties

Stellar is an open-source protocol and global network for money transfer. The
platform allows individuals, businesses, and institutions around the world to send
money in any currency and at a fraction of time and price as compared to other
blockchain platforms.

Hyperledger Fabric is a unique implementation of distributed ledger technology


(DLT). It delivers enterprise-ready network security, scalability, confidentiality, and
performance in a modular blockchain architecture. It provides membership identity
services to manage user IDs and authenticates all participants on the network.

CryptoFIAT represents an equivalent amount of FIAT money securely stored in a


trusted account. Its goal is to lower transaction fees by omitting intermediaries.

Entities in which people trust to hold their deposits and issue credits into the Stellar
network for their deposits. Stellar Anchors take FIAT deposits and issue
corresponding CryptoFIAT to depositor’s Stellar account on the Stellar ledger, and
facilitate withdrawals from CryptoFIAT to FIAT.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
45
Total number of tokens created. In Acudeen’s case, total supply is limited to 10
Billion ACU.

The total amount of tokens available in the market at a given time for buying or
selling.

Token Velocity is the speed at which token transactions take place. It represents the
number of times a single token changes hands within a given year, on average.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
46
If you do not agree to these terms, please do not use this document. BlockSpeed Technologies Pte Ltd (“BlockSpeed”) provides this document to you
subject to compliance with the terms and conditions set forth herein. By using this document, you hereby accept and agree to comply with the terms and
conditions set forth in this User Agreement. This User Agreement is a binding agreement between you and BlockSpeed, and governs your access and use of
this document.

Disclaimer, Exclusions, and Limitations of Liability

You acknowledge that this document is provided for general information purposes only. Nothing in this document shall be construed as a recommendation
to purchase, sell, or hold any security or other investment, or to pursue any investment style or strategy. Nothing in this document shall be construed as
advice that purports to be tailored to your needs or the needs of any person or company receiving the advice. The information in this document is intended
for general circulation only and does not constitute investment advice. Nothing in this document is published with regard to the specific investment objectives,
financial situation and particular needs of any person who may receive the information. BlockSpeed is not a broker/dealer, investment/financial adviser under
Singapore law or securities laws of other jurisdictions and does not advise individuals or entities as to the advisability of investing in, purchasing, or selling
securities or other financial products or services.

Nothing in this document shall be construed as, or form part of, any offer for sale or subscription of or solicitation or invitation of any offer to buy
or subscribe for any securities. The data and information made available in this document are of a general nature and do not purport, and shall not in any
way be deemed, to constitute an offer or provision of any professional or expert advice, including without limitation any financial, investment, legal, accounting
or tax advice, and shall not be relied upon by you in that regard. You should at all times consult a qualified expert or professional adviser to obtain advice
and independent verification of the information and data contained herein before acting on it. Any financial or investment information in this document are
intended to be for your general information only. You should not rely upon such information in making any particular investment or other decision which
should only be made after consulting with a fully qualified financial adviser. Such information do not nor are they intended to constitute any form of financial
or investment advice, opinion or recommendation about any investment product, or any inducement or invitation relating to any of the products listed or
referred to. Any arrangement made between you and a third party named on or linked to from these pages is at your sole risk and responsibility.

You acknowledge that BlockSpeed is under no obligation to exercise editorial control over, and to review, edit or amend any data, information, materials
or contents of any content in this document. You agree that all statements, offers, information, opinions, materials, content in this document should be used,
accepted and relied upon only with care and discretion and at your own risk, and BlockSpeed shall not be responsible for any loss, damage or liability incurred
by you arising from such use or reliance. You understand that employees, shareholders, or associates of BlockSpeed may have positions in one or more
securities mentioned in this document.

This document (including all information and materials contained in this document) is provided “as is”. Although the material in this document is based
upon information that BlockSpeed considers reliable and endeavours to keep current, BlockSpeed does not assure that this material is accurate, current or
complete and is not providing any warranties or representations regarding the material contained in this document. To the fullest extent permissible pursuant
to applicable law, BlockSpeed disclaims all warranties and/or representations of any kind with regard to this document, including but not limited to any implied
warranties of merchantability, non-infringement of third-party rights, or fitness for a particular purpose.

BlockSpeed does not warrant, either expressly or impliedly, the accuracy or completeness of the information, text, graphics, links or other items contained in
this document. Neither BlockSpeed nor any of its affiliates, directors, employees or other representatives will be liable for any damages, losses or liabilities of
any kind arising out of or in connection with the use of this document. To the best of BlockSpeed’s knowledge, this document does not contain and is not
based on any non-public, material information.

The information in this document is not intended for distribution to, or use by, any person or entity in any jurisdiction where such distribution or use would
be contrary to law or regulation, or which would subject BlockSpeed to any registration requirement within such jurisdiction or country. BlockSpeed is not
licensed or regulated by any authority in any jurisdiction or country to provide the information in this document.

Indemnification

As a condition of your use of this document, you agree to indemnify, defend and hold harmless BlockSpeed and its affiliates, and their respective officers,
directors, employees, members, managing members, managers, agents, representatives, successors and assigns from and against any and all actions, causes
of action, claims, charges, cost, demands, expenses and damages (including attorneys’ fees and expenses), losses and liabilities or other expenses of any kind
that arise directly or indirectly out of or from, arising out of or in connection with violation of these terms, use of this document, violation of the rights of any
third party, acts, omissions or negligence of third parties, their directors, employees or agents.

To the extent permitted by law, BlockSpeed shall not be liable to you, any other person, or organization, for any direct, indirect, special, punitive, exemplary,
incidental or consequential damages, whether in contract, tort (including negligence), or otherwise, arising in any way from, or in connection with, the use of
this document and/or its content. This includes, without limitation, liability for any act or omission in reliance on the information in this document. BlockSpeed
expressly disclaims and excludes all warranties, conditions, representations and terms not expressly set out in this User Agreement, whether express, implied
or statutory, with regard to this document and its content, including any implied warranties or representations about the accuracy or completeness of this
document and the content, suitability and general availability, or whether it is free from error.

Severability

If these terms or any part of them is understood to be illegal, invalid or otherwise unenforceable under the laws of any state or country in which these terms
are intended to be effective, then to the extent that they are illegal, invalid or unenforceable, they shall in that state or country be treated as severed and
deleted from these terms and the remaining terms shall survive and remain fully intact and in effect and will continue to be binding and enforceable in that
state or country.

Governing Law

These terms, as well as any claims arising from or related thereto, are governed by the laws of Singapore without reference to the principles of conflicts of
laws thereof. You agree to submit to the personal and exclusive jurisdiction of the courts of Singapore with respect to all disputes arising out of or related to
this Agreement. BlockSpeed and you each hereby irrevocably consent to the jurisdiction of such courts, and each Party hereby waives any claim or defence
that such forum is not convenient or proper.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
47
© BlockSpeed Technologies Pte Ltd (2018). All rights reserved.

This document is for general information purposes only and is not a recommendation to buy or sell any securities. Please see our
disclaimer and important terms & conditions. Acudeen is a client of Blockspeed. Copyright 2018, Blockspeed Technologies Pte. Ltd.
48