It was not long ago that bankers and traders were turning up their noses at fintech and the phrase, “Normal people should not be trading,” was common in the City of London and other financial markets. That was until several players like Robinhood joined the party and technology democratised investing. Several new players have popped up to open up trading to retail investors and in South Africa, Netherlands-based fintech, Mesh.trade is launching a decentralised financial markets platform that is promising speed and lower costs. Heading Mesh, which took three years to build, is Connie Bloem. Bloem, who has a background in industrial and financial engineering told BizNews that retail investors wanted more visibility, flexibility, and control over their entire investment portfolio, just as the institutional investors have at their multi-screen trading desks. What Mesh offers is an end-to-end Financial Markets platform, built with bank-grade security on top of Blockchain technology, that will create huge time and cost efficiencies, substantially improve the markets and make them more accessible to all. – Linda van Tilburg
$200 billion per annum wasted on intermediary services
I think the dream of Mesh is an amazing one. Something that I wake up every morning and feel invigorated about. People in general think that the financial markets are efficient and they’re working, but that’s not true. The financial markets are complex, inefficient, and bloated. It is estimated that around $200 billion per annum is actually wasted on intermediary services. You and I pay for that in the form of the returns on our pension funds not delivering and the returns on many of our investments going down. We believe fundamentally that we can change this. And this is why we’ve created Mesh. After years of experience in the Capital Markets we’ve seen these problems first-hand. We have implemented large Trade and Treasury systems in Central Banks and Investment Banks and we think that the current model excludes too many players so is fundamentally unfair. With Mesh we believe that we can create markets that are more efficient and more accessible to all, where everyone can go in and can raise capital for their businesses, but also find that unique spot where they can invest, to send their kids to university or to grow their wealth at the end of the day.
Other ‘democratisers’ are taking a further piece of the pie
This is just the start. We’ve just launched in South Africa, it’s the first country that we are entering into and we are seeing the other players also entering into the space under the banner of democratising financial markets where in fact, these competitors are only taking a further cut of the pie. They’re just adding another brokerage fee to that margin. But with Mesh, we are changing the underlying paradigm, we are building a platform where institutional, corporate, SME and Retail users can get direct access to the financial markets and to the future of investing.
How Mesh reduces the cost of investing and takes just five minutes to be up and running
When we look at the retail investors, but also at issuers of assets in the markets, we fundamentally decrease the costs on both sides of the market. We’ve looked at how we stack up against our competitors in the market where they take on average 0.75% to 1.3% on trades. Our fees are only 0.3%, but the value we offer is less about price, our greatest efficiencies are actually that we compress the market into an elegant flow. We take out or really simplify those scary bits and we create fundamental savings of time and efficiency as well. We have a little inside challenge that we set ourselves when we started building Mesh. It normally takes you two weeks to get into the capital markets, it now takes you less than 5 minutes. In 5 minutes, you are up and running and you can actually start investing or issuing financial assets into our market.
An industrial and financial engineer with a passion ‘to build things’ led to Mesh
I have a long history within the Capital Markets space. I started out my journey studying industrial engineering and then did a post grad in financial engineering, and I entered into the Financial Markets wide eyed and bushy tailed, believing everything would be just like it is in the movies where you see traders trading and all these flashy screens coming up. But I realised pretty quickly it was actually not like that at all. I spent a lot of my time with Andile, another 42Markets Group business, consulting to Central Banks and Investment Banks, implementing big technology systems. Our clients back then experienced many of the same problems we still see today and I always left some of these projects wondering what more I could do, can I build something better? We then started building applications to create more efficiencies and reduce waste, and that’s generally where my passion lies in this industry, it is in building solutions that actually change how things are done, that make it better, that ultimately move the industry forward. And that is where my deep dive into the blockchain and DLT-based solutions came in as well.
Using the blockchain and how you can invest in traditional and decentralised financial assets on Mesh
Mesh is a multi-sided Financial Markets platform built on the Blockchain, taking advantage of the best that decentralised solutions and Distributed Ledger Technology can offer. So, on Mesh you can actually invest in cryptocurrencies, DeFi instruments and digital assets, but also in all the traditional financial assets as well. So here I’m talking about ETFs, stocks, bonds, derivatives, all that. All those instruments can be tokenized and fractionalised using our Mesh instrument builder and you can trade them and settle them using the blockchain.
We are built on top of the Stellar network, a Layer 1 blockchain built to support applications for the global financial system, and when you enter the world of Stellar, you can access their Automated Market Makers that give you access to all the cryptocurrencies in the world. We are not a centralised exchange, we run fully decentralised, and this is the way that we manage to provide all these crypto assets to our clients. When it comes to the traditional assets I mentioned, those ETFs, ETNs, stocks and bonds, we manage these through our asset servicing engine, the Mesh Oracle, a bank-grade calculation engine which allows issuers to manage the lifecycle benefits of these assets as well.
Initial self-funding through 42Markets Group, but closing on Series A round and looking for partners
As you know, building a FinTech business is not an inexpensive journey. It is challenging, and funding can be really challenging, especially given where the market is today with the crypto winter and all the pressures and the whispers of recession. Funding has definitely been an interesting journey for us. Thus far, we’ve been very privileged to be self-funded through our group, the 42Markets Group, but we are currently on a funding round and hopefully soon we can provide the market with some interesting news as to our progress in that direction. But yes, we are currently raising funds and we hope to close that out soon.
We are very aware that this is a big dream and we invite people to join us in this movement. So, we are looking at creating active partnerships within the South African, African and global markets as well. We are very proud to say that Efficient Private Clients is our first partner on the Mesh platform and they are issuing assets and actively building the Mesh ecosystem with us. So, if anyone wants to reach out to us and come along with us on this journey – You’re more than welcome to.
On a mission to become the de facto standard and to help Africa to leapfrog into decentralised Financial Markets
Our dream is that Mesh can become the de facto standard decentralised Financial Markets platform. We all are hearing the whispers of the Web 3.0 revolution. So, we know blockchain and DLT is the future of this market. Not all of us know how that is going to look. So, at Mesh we’re trying to bridge that gap between traditional finance and the decentralised finance space. For the next couple of months and years, we will be putting all of our efforts into making sure that our product really solves the fundamental problems within this market and we will be starting to expand our business across geographies. We’re looking at the UK and EU markets specifically and making sure that we can also provide our services to some African countries as well, where we know that we can provide companies and banks the opportunity to leapfrog old infrastructure and to bring new technology and new market functions into that space as well.
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