Forex vc-pitch

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Forex.co.ke is a localised bank2business foreign exchange transactions platform.

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Forex vc-pitch

  1. 1. Forex.co.ke Smart Money Bargains
  2. 2. Shopping for foreign exchange is a pain.
  3. 3. Forex.co.ke takes that pain away.
  4. 4. What is the problem?• Getting quotes is a pain.• Negotiating a rate is a pain.• Providing statutory KYC documentation is a pain.• Settling an agreed transaction is a pain.BUYING FOREIGN EXCHANGE IS A PAIN!
  5. 5. What is the solution?• Digitise quotation requests• Digitise bargain discovery• Digitise KYC documentation retention• Digitise settlement data exchangeBUYING FOREIGN EXCHANGE WITH FOREX.CO.KE IS A PLEASURE!
  6. 6. Demo www.forex.co.ke [BASIC]We can demonstrate the full un-deployed system. [COMPREHENSIVE]
  7. 7. How big is the market?• 100M$ a day is traded in Kenya domestically• 1Bn$ a month is remitted to Kenya from the Kenyan diaspora• All this money requires conversion, all conversion requires a quote• Official CBK statistics The market for foreign exchange in Kenya is 3BN$ a month.
  8. 8. What is our business model?• B2B – link banks to businesses• Charge businesses flat monthly subscription fee to access the system e.g. • Small – 1$ pm • Medium – 10$ pm • Large – 100$ pm• Charge banks a percentage fee of every transaction closed via our system e.g. • 0.05% per transaction.
  9. 9. What are our competitive advantages?• Patent pending• Powerful online brand – forex.co.ke • Concise • Relevant • Memorable • Inimitable • Appealing• Regulatory approval head start• Software development head start• Marketplace awareness head start – already talking to banks
  10. 10. What is our competition?• Reuters & Bloomberg terminals• Old habits die hard • Better the devil you know• The big five banks have some marketplace monopolies e.g. • UNEP will only deal with Citibank • Many government companies will only trade with government banks• Potential imitators• Online banking applications with existing banks • Reduce hassle but are logically excluded from providing quotes from other banks!
  11. 11. Why are we better than the competition?• We cost orders of magnitude less than Reuters or Bloomberg• We link local banks with local businesses• We give you quotes from many banks• We give them to you quickly• We give them to you cheaply• We enable you to accept and close digitally• We are a neutral third party
  12. 12. What is your marketing plan?• The big 4 banks control 80 – 85% of the market,• 43 licensed banks in Kenya• Remaining 39 banks want a slice!• Will persuade them to join our platform to • Increase their market share, • Cost-effectively, • Measurably• Target the small and medium sized banks• Connect them to Kenyan businesses
  13. 13. What is your sales plan?• To enjoin banks • Have signed up industry talent to sign up banks • Incentivized with stock options• To enjoin businesses • Resellers program • Incentivized with revenue share
  14. 14. Who is your team?• Amoroso Gombe – Microelectronics, Liverpool, 10+ years Kenyan financial IT sector• Mohammad Ehtesham – Computer science, MBA, 5+ years Kenyan IT sector, UNEP• William Todd – Computer science, Cambridge, 20+ years global financial IT sector• Hinal Godvinji – Enterprise, 10+ years Kenyan foreign exchange sector
  15. 15. How much money do you need & why?• Key staff – 14M • General Manager, Technical Manager, Support Manager, Business Development Manager – Banks, Channel Manager - Resellers • Accountant • 24/7 support staff 3 – Bank side, 3 – Client side (8 Hour shifts)• Operating infrastructure 4.2M • EC2 cloud hosting • Office for 8 + computer hardware & software licenses• Sales &Marketing – 6M • Advertising & marketing events, media & resellers collateral• Total – KES 25M / ~ 300K USD
  16. 16. What is your break-even point?• Assume 0.05% transaction fees• Assume no fees from business customers• Assume 25% of gross revenue goes to the resellers• Assume exchange rate of KES 85 = 1 USDB/E -> 25M <= 85*{0.05% (X)} – 85*{25%[0.05% (X)]} -> 25m <= 31,875,000 – 25,000,000 WHERE X = 1BnBrokering 1Bn$ p.a. is our break even transactions volume
  17. 17. Do you have an exchange rate risk?• Yes, our revenues are earned in dollars and our costs are in shillings• A shilling depreciation improves our revenue position • (Vis-à-vis our Kenyan currency cost base)• A shilling appreciation hurts our revenue position • Can be hedged against with a forward contract • Not likely
  18. 18. What have you accomplished so far?• A stabilized product definition • After years of marketplace iteration• A working platform• Preliminary regulatory approval• Initial engagement with banks & customers
  19. 19. How much equity are you offering? Let’s negotiate!
  20. 20. Thank you!Thank you for giving us the time to present our pitch to you.

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