LeapRate interview… Harish D. Gupta is CEO and Co-Founder of Polybird, a global exchange for tokenized securities. On the exchange, global issuers such as financial institutions, governments, and companies can raise capital (equity or debt) via issuing digital tokens or can list tokenized assets (currencies, commodities, commercial real estate).
Harish D. Gupta
Prior to Polybird, Gupta was on the Asia Pacific Economics team at Barclays Investment Bank. He joins LeapRate today to talk about his Polybird exchange and the next big trends in ensuring liquidity and getting rid of the “dry powder” in private equity.
LR: Please describe Polybird – when it was started, what are the major product listings that the company offers, management team experience, anything else relevant in terms of the company’s structure, customer base, raised funds, etc.?
Harish: Polybird was launched in January 2018 by Harish D. Gupta, Abhijit Kumar and James McDowall, shortly after the burst of the ICO bubble in December 2017. The founding team concluded that the failure of the ICO model didn’t necessarily mean a final failure of the industry, but a phase in the evolution of the space to something that was more regulated, more credible and safer for everyone involved.
The founding team envisioned that the future of blockchain-based capital markets was Securities Tokens Offerings (STOs) and the United States being the largest securities markets in the world, would be a great place to start an “STO marketplace.” Over time, Polybird evolved into a company that was right at the intersection of traditional financial markets and the crypto space.
Today, Polybird is a global marketplace for tokenized securities. It enables direct offering on the platform to raise capital and then allow trading of those securities post the holding period. Issuers can also apply to list existing securities to provide liquidity to their shareholders. Global issuers such as financial institutions, governments, and companies can raise capital via listing tokenized securities (post-minting) and/or listing tokenized securities to provide liquidity.
Polybird offers listings of both national and international securities tokens such as revenue-share agreements, LP shares (hedge funds, private equity, venture capital), real estate, infrastructure, private company shares, and private debt, among others. Within the United States, we are mostly targeting accredited investors and institutional buyers, and internationally, we have similar interests but more open to who we accept when compared with the US markets.
LR: Could you please describe the process through which a client of yours goes through to have their product traded through Polybird and are there any specific details around the process?
Harish: Any client that is looking to get listed on Polybird goes through a Know Your Business due diligence. The client is expected to meet certain listing requirements that we currently have which are listed here: https://polybird.io/listing.
LR: While realizing the advantage of blockchain in Polybird’s business model, how do you think Polybird will sustain its competitive advantages and what are these in particular? Are there any existing competitors that are trying to offer their clients liquidity in the private markets (in terms of tokenized assets and raising capital through them?)
Harish: We have thought long and deep about our business moat for many months. Initially we thought that our technology would be our moat, but technology is something that’s easily replicable so it’s not necessarily a moat. It only takes the market a matter of time to copy it.
Finally, we came to the conclusion that our biggest moat would be the eyeballs, the brand name, and simply, how fast our platform can achieve “liquidity” in any asset.
That is, the faster our platform can add value to any illiquid asset, STO, or product, is what determines our value addition to clients, which is our moat. And things like brand name, liquidity, and getting the right eyeballs are extremely hard and time/resource intensive to get.
But the good thing about that is, which is also the thumb rule of business moat and competitiveness: whatever is hard to achieve, is hard to lose, and easy to achieve, is easy to lose.
LR: While there is a lot of interest from clients to raise equity and debt through the issuance of digital tokens, do you think potential clients are still in two minds about the risks and opportunities for going off the traditional path of raising capital? Do you see any challenges in acquiring clients and raising capital in that sense?
Harish: What we have seen in the markets is that many issuers do not mind at all to issue tokens to raise capital. In fact, many leading companies and brand names have stepped forward to go that route.
It’s the buy side, the investors, who are more cautious to buy tokens, instead of the traditional paper-based agreements.
We think that it’s a matter of time that investors would overcome that cautiousness and buying tokens would become a standard and paper-based agreement—a thing of the past.
LR: In terms of the private vs. public market growth and opportunities, and considering the investors’ appetite in terms of access to more private capital, what do you believe are the next big developments/trends in ensuring liquidity and getting rid of the “dry powder” in private equity? Any other thoughts on the private market?
Harish: We think the next big trend in the private markets is going to be direct listings, via which last phase of shareholders in any asset would be able to “get out” and new phase of shareholders (dry powder) would be able to “get in”—all while remaining private.