Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: ESG, Financial Inclusion, Sustainable Finance
CCA Policy Proposal to Expand Investment Crowdfunding
Investment Crowdfunding | Oct 17, 2024
How Expanding Investment Crowdfunding Can Drive Economic Growth
Kudus to Crowdfund Capital Advisors (CCA) for their policy proposal to expand investment crowdfunding and boost economic growth in the U.S.. Their approach is built on years of experience and provides a practical way to create jobs and support small businesses across the United States. This proposal comes during the final stages of the 2024 election where the economy is a hot topic in political debates. One important piece that is often overlooked is the fact that small businesses and startups are the real drivers of job growth and innovation in the U.S.. A special shoutout to Sherwood Neiss, an advisor at the National Crowdfunding & Fintech Association (NCFA), whose guidance is helping make investment crowdfunding more accessible and beneficial for entrepreneurs everywhere.
Investment crowdfunding makes it easier for everyday Americans to invest in startups and small businesses through online platforms. Created under the JOBS Act of 2012, it helps removes obstacles that keeps small investors locked out from investing directly in private companies by letting businesses raise money directly from their community. So far, it has helped raise over $2.5 billion, providing startup and growth capital to support to a wide variety of businesses across the country.
Why Expand Investment Crowdfunding Now?
Expanding investment crowdfunding is a great way to boost the U.S. economy right away, offering several important benefits:
1. Improves Access to Capital
Many small businesses especially in rural areas or owned by women and minorities have a hard time getting traditional funding like bank loans or venture capital. Investment crowdfunding offers a simple and flexible way for these businesses to raise money directly from the public when they need it.
See: The Real Story of Access to Capital
This helps close the funding gap that often holds back promising startups from innovating, creating value, and propelling an economy forward with jobs and economic impact.
2. Aligns with Economic Priorities of All Campaigns
Vice President Harris has worked on promoting innovation and creating more opportunities for underrepresented entrepreneurs. Investment crowdfunding fits well with her goals because it provides a practical way to boost funding to women and minority-led startups who find it difficult to secure funding from the banks or traditional venture capital. Over 40% of capital raised on crowdfunding platforms to date has gone to underserved businesses, confirming that it’s a great way to support those who are often left out by traditional financing options. Compare this percentage with the statistic that with venture capital only 2% of funds go to underserved groups.
Investment crowdfunding also supports Trump’s focus on strengthening U.S. manufacturing, cutting taxes, and creating jobs. It can help direct money to manufacturing startups to help them grow faster and create more jobs.
3. Job Creation and Economic Strength
Small businesses make up 55% of all new jobs in the U.S. since 2013. Expanding investment crowdfunding can help these businesses keep growing and creating new jobs, especially in areas that often get overlooked, and strengthening local economies.
4. Building a Community of ‘Investomers™'
Investment crowdfunding creates a special situation where investors are also customers (or investomers™). These people have a strong interest in seeing the businesses they support succeed.
See: Fintech Fridays EP62: The Future of Investment Crowdfunding: Innovations, Data, and Opportunities
They provide more than just money. They also promote the business and stay loyal which is incredibly valuable for any startup looking to grow.
The Proposal
Investment crowdfunding has already made a big difference to local communities contributing over $19.7 billion (this figure represents the total impact). With more support from government, the impact of investment crowdfunding could more than double helping small businesses in both urban and rural areas to launch and thrive.
- CCA suggests creating two funds for the government to co-invest. $1 billion fund for equity and another $1 billion for loans. The government would use these funds to invest alongside entrepreneurs in businesses raising money through crowdfunding.
- The proposal also suggests giving tax breaks to people who invest in crowdfunding campaigns where they could write off 100% of their investment in the year they made it. This would encourage more people to invest, making it easier for small businesses to get the money they need.
See: Innovating Crowdfunding with Bitcoin’s Network
- Partner with venture funds using artificial intelligence to identify promising startups to ensure investment dollars go to businesses with the greatest chance of success to reduce the risk for both investors and the government.
Outlook
Investment crowdfunding is a great way to tackle the country’s economic challenges in a way that strikes a chord on both sides of the political aisle. It can create jobs, support diverse entrepreneurs, and give small businesses better access to the funding they need to succeed.
Download the 6 page PDF Crowdfunding Policy Proposal --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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The Role of Fintech in the Circular Economy
Circular Economy | Oct 8, 2024
Image: Freepik
Manufacturers and fintech firms are driving sustainability and circular economy innovations to reduce waste and boost efficiency
Many manufacturers and sellers have prioritized sustainability and circular economy concepts in response to environmental regulation, institutional pressure, and the need for more resource-efficient manufacturing.
A study published on ResearchGate, conducted by Abdul Gani, Neeraj Bhanot, Faisal Talib, and Mohammed Asjad, shows that small and medium-sized enterprises are the most important part of the global economy where sustainability practices are gaining worldwide attention. A prominent example of this would be Evergreen Solar (which specializes in designing and installing solar energy systems for residential and commercial customers in Canada.) and Tentree (a Canadian clothing brand that plants ten trees for each item sold and uses materials that are eco-friendly.)
See: Alternative forms of capital will be key to develop sustainable economic systems
However, large-scale industries are also following sustainable practices. Resolute Forest Products is an organization that is committed to sustainable forest management and is investing in renewable energy projects aimed to reduce carbon footprint.
Sustainability and the Circular Economy?
The Circular economy works upon three principles based on sustainability:
- Eliminating pollution and waste
- Circulating products and materials to maximize their value
- Regulating the environment
This model promotes the leasing, sharing, repairing, reusing, refurbishing and recycling of used products and materials for the longest time period possible. This way, the lifespan of goods and articles manufactured is prolonged. This also lowers waste production at a significant rate.
See: Sustainable Business and The Regenerative Future
By shifting to the circular economy, organizations can boost their productivity and profits at a significant rate. For example, Loop Industries has seen substantial profits and growth thanks to the high demand of its recycled polyester products.
How Technology is Powering the Circular Economy
Since the 70’s, technology has become the most important part of this economic model. This was the time when the first Earth Day was commemorated in April 1970. This is when the term “Recycling” was gaining momentum, with revolutionary processes and machinery that paved the way for material recovery.
By the 90’s, the term “Extended Producer Responsibility” was introduced, which ensured responsibility took the centre stage. It focuses on the responsibility of the producer for their product’s impact in the last stage of its life cycle and after consumption. It also encourages manufacturers to create products that significantly lower the impact on health and the environment.
EPR programs, often equipped with technology, incentivize manufacturers to create and manage their products in a responsible manner. They do so by identifying the impact of the life cycles of the products. This, on the other hand, promotes circularity through mindful designing and end-of-life planning.
See: CSA Backs New Sustainability Disclosure Standards
The introduction of blockchain technology in 2010 brought a revolutionary era in the circular economy altogether. This technology enabled manufacturers to tackle the long-standing issues in the transparency of the supply chain, addressing accountability and traceability- the most important elements for encouraging circularity by ensuring responsible and efficient sourcing and disposal of materials. Blockchain technology also helps customers make well-informed decisions and deem companies responsible for the practices followed by them.
However, the story doesn’t end with blockchain. Today, there are various other technological advancements that are energizing the circular economy, such as:
- Circular Economy Token Systems - Gamification and tokenized systems are used to promote sustainable choices by offering rewards and incentives to individuals and companies to increase green user engagement, thus contributing to the circular economy.
- Sorting Robots Powered by AI - There are various AI robots specializing in sorting. They are programmed in such a way as to improve the efficiency and accuracy of the recycling process of a material. By doing so, these robots are helpful in tackling global waste crisis in an impactful manner. These robots enhance the transparency of supply chains by providing real-time data on the quantity, quality, and value of any product. Fintech platforms can leverage this level of transparency to offer more transparent and accurate financial products. Furthermore, it also helps you reduce the financial risks associated with investing in recycled products, thus enabling manufacturers make data-driven decisions.
- Blockchain Traceability offers a decentralized ledger to record each transaction and movement within a supply chain. All the people participating in the supply chain, such as raw material suppliers, manufacturers, retailers, and customers, contribute to the blockchain data. This level of transparency helps in tracing the journey of any product with the utmost accuracy, encouraging sourcing and efficient recycling. There are many global organizations like IBM Food Trust and Provenance, that track the origin of products and ensure sustainability and ethical sourcing.
- AI-enabled Circular Design is also helping in product designing and recycling processes. These tools use machine learning algorithms that recognize patterns and the correlation to the data. Furthermore, AI promotes the creation of products that are aligned with the principles of circular economy.
Fintech Poised to Grow the Circular Economy
- Market Growth - According to a recently MarkNtel Advisors study, fintech was valued at approximately US$553 billion in 2023 globally and is rising at a CAGR of 6.6% from 2023 to 2030.
See: Sustainability: A Must for Fintech Growth
- Investment - In recent years, investments in startups specializing in fintech have risen. A significant part of these investments have been allocated to areas that prioritize sustainability and circular economy solutions. A Canadian company that meets this definition is CoPower, a Toronto-based fintech firm focused on sustainable investing (purchased by Vancity Community Investment Bank). CoPower focuses in offering investment possibilities for clean energy and green infrastructure projects that adhere to the concepts of sustainability and circular economy. CoPower provides 'Green Bonds' to fund projects such as energy-efficient retrofits, solar energy, and geothermal installations, making it a pioneer in integrating financial solutions with a sustainable effect.
- Regulatory Promotions - Many governments across the world are introducing regulations that are supportive of fostering the growth of fintech in the circular economy. For example, The European Union has a Circular Economy Action Plan that promotes sustainable finance and investment for various circular economy projects. The United Kingdom also has a Green Finance Taskforce that promotes finance and investments for sustainable projects.
More Examples That Utilize Fintech in a Circular Economy
Below are a couple of Canada examples that have adopted fintech solutions to support a circular economy:
Loop Industries
Loop Industries is a chemical company based in Terrebonne, Canada. This company has developed a technology that recycles plastic waste into polyester fibre. This company has utilized fintech solutions to boost its supply chain, manage financial risks, and secure funds for its revolutionary recycling technology. Loop uses a technology that provides a sustainable and eco-friendly alternative to the traditional production of plastic. This technology contributes to a more circular economy as it encourages the reduction of waste and the conservation of resources.
CarbonCure Technologies
Based in Halifax, Nova Scotia, CarbonCure Technologies has developed a process that captures and stores carbon dioxide in concrete. This company has utilized fintech to attract investment and secure funds for carbon capture solutions. CarbonCure’s technology is helpful in lowering carbon emissions and making the construction more sustainable and eco-friendly, thus promoting sustainable economy.
Conclusion
Sustainable practices are impactful in lowering the carbon footprint and saving a lot of money. It enables people to discover and follow the best solutions that can be helpful in conserving resources. Technologies like AI, Blockchain and Fintech are advancing the development and impact of the circular economy by promoting the conservation of resources while streamlining transparent production process that reduce pollution and enable people to adopt sustainable practices.
About the Author
Amir Waheed is the co-founder & CEO of SEO Toronto Experts. He intends to bring a massive transformation to eCommerce SEO Services. His team of talented IT professionals knows the secret of getting huge conversions.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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The Financial Benefits of Investing in Smart Plumbing Technology for Commercial Properties
Oct 4, 2024
Image: Freepik/pvproductions
In today's fast-paced world, businesses constantly seek strategies to lower operational expenses while ensuring efficiency and sustainability. One area where innovative technology can significantly impact is plumbing. Smart plumbing technology has revolutionized how commercial properties manage water consumption, detect leaks, and optimize systems for long-term savings. This article explores the financial benefits of investing in smart plumbing technology for commercial properties and highlights why this is a prudent decision for business owners and property managers.
Reduced Water Consumption and Costs
One of the most direct financial benefits of implementing smart plumbing technology in commercial properties is reducing water usage. Traditional plumbing systems often lead to excessive water waste due to inefficiencies, outdated designs, or unnoticed leaks. Smart plumbing systems, however, are designed with advanced sensors and automation features that help monitor and control water usage more efficiently.
For example, automated faucets, low-flow toilets, and smart water meters can drastically reduce water consumption. Smart meters deliver real-time insights into water usage, allowing property managers to track patterns and adjust consumption as needed. Businesses can reduce their monthly water expenses by ensuring water is only used when necessary. Over time, these savings accumulate, making smart plumbing a cost-effective investment.
Preventive Maintenance and Cost Savings
One significant expense that commercial properties face is plumbing repairs and maintenance. Leaks, clogged pipes, and burst water lines can lead to costly repairs, property damage, and disruption of business operations. Traditional plumbing systems rely on periodic inspections, and issues are often only detected after they have escalated into major problems.
Smart plumbing technology enables proactive maintenance by detecting issues early. Leak detection sensors, for instance, can alert property managers of leaks before they cause significant damage. These systems can be integrated with building management software to continuously monitor the plumbing infrastructure, enabling real-time responses to potential problems.
Smart plumbing systems can save commercial properties thousands of dollars annually by preventing minor issues from turning into costly repairs. Moreover, early detection reduces the risk of water damage to the building structure, which can be expensive and time-consuming.
Enhanced Energy Efficiency
In addition to saving water, smart plumbing systems contribute to greater energy efficiency, which translates into further cost savings. Heating water can be a significant expense for commercial properties, especially for businesses such as hotels, restaurants, and healthcare facilities that rely on large amounts of hot water every day. Smart water heaters and systems with energy-saving features can optimize heating by adjusting temperatures based on usage patterns and peak demand times.
For example, a smart water heater can be set to heat water during off-peak times when energy rates are lower, helping to reduce overall utility costs. In some cases, these systems can even recycle heat from wastewater, providing a sustainable solution for energy conservation. Lowering energy usage reduces utility expenses and helps businesses reach their sustainability targets, potentially resulting in added financial benefits like tax credits or rebates.
Increased Property Value
Investing in smart plumbing technology can significantly increase the value of a commercial property. Prospective buyers and tenants are increasingly looking for properties equipped with modern, sustainable infrastructure that aligns with their operational goals and environmental concerns.
Smart plumbing systems are especially appealing in markets prioritizing energy efficiency and sustainability.
A property with smart plumbing technology will likely command higher rent or sale prices due to its long-term savings and operational efficiency. Moreover, many commercial businesses must meet specific environmental standards, and properties with smart plumbing systems can help meet or exceed these standards, making them more appealing to eco-conscious businesses.
Compliance with Regulations and Sustainability Goals
Government regulations concerning water usage and sustainability are becoming more stringent, particularly for commercial properties. Smart plumbing technology can help businesses comply with these regulations more easily. Many cities and municipalities have introduced fines or penalties for excessive water usage, and non-compliance with environmental standards can lead to additional business costs.
By implementing smart plumbing solutions, commercial properties can avoid these fines while also contributing to broader sustainability goals. Some governments even offer incentives for businesses that invest in water-saving technologies, such as grants, tax deductions, or rebates.
Utilizing these incentives can further improve the cost-effectiveness of implementing smart plumbing systems.
Long-Term Investment with High ROI
While the initial investment in smart plumbing technology may be higher than traditional systems, the long-term financial advantages significantly surpass the upfront costs. Smart plumbing technology is designed to last longer, require less frequent repairs, and improve overall efficiency in both water and energy usage.
These elements lead to a strong return on investment (ROI) throughout the system's lifespan.
For instance, a commercial building that installs smart plumbing technology may see reduced utility costs, fewer repairs, and increased property value within just a few years of implementation. In the long run, the savings generated by efficient water management and energy use can substantially reduce operational costs.
Additionally, with the growing emphasis on sustainability in business operations and property management, properties that invest in smart plumbing technology will likely remain competitive in the market. As more businesses prioritize environmental responsibility, having a commercial property equipped with smart plumbing technology will become increasingly advantageous.
Improved Tenant Satisfaction and Retention
For commercial property owners and managers, ensuring tenant satisfaction is key to maintaining long-term leases and reducing turnover. Smart plumbing technology can enhance the overall experience of tenants by providing reliable, efficient, and uninterrupted plumbing services. With real-time monitoring and automated systems, plumbing issues such as leaks, water pressure problems, or inconsistent hot water supply can be addressed promptly—often before tenants know the problem.
This proactive approach to plumbing service not only reduces complaints and downtime but also demonstrates a commitment to providing high-quality infrastructure for tenants. Satisfied tenants are more likely to renew leases, which can significantly reduce vacancy rates and the costs associated with finding new tenants. Additionally, commercial properties that offer smart plumbing services may be able to command premium rental rates, as tenants value the convenience and efficiency these systems provide.
Conclusion
The financial benefits of investing in smart plumbing technology for commercial properties are multifaceted and compelling. From reducing water and energy consumption to preventing costly repairs and increasing property value, smart plumbing systems offer a high return on investment. Moreover, the ability to comply with regulations, take advantage of government incentives, and contribute to sustainability goals makes smart plumbing technology an essential component for any forward-thinking commercial property.
See: Eco-Friendly Plumbing Innovations for Sustainable Living
As businesses continue to seek ways to optimize operations and reduce costs, smart plumbing technology presents a viable solution that not only benefits the bottom line but also supports a sustainable future. Investing in smart plumbing is not just a short-term fix; it is a long-term strategy that pays off in both financial savings and environmental impact.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Will Nuclear Fuel the Data-Driven Future?
AI Energy | Sep 30, 2024
Freepik AI
AI Data Centers' Growing Power Needs and the Rise of Nuclear Energy
According to the International Energy Agency (IEA), data centre workloads climbed by 340% between 2015 and 2022 as giant tech companies like Amazon, Google, and Microsoft doubled their power usage between 2017 and 2021, reaching 72 TWh. Artificial intelligence (AI) is growing at an exponential rate because AI operations require more large and complex data centres, resulting in unprecedented energy demands and a renaissance in nuclear power that can deliver continuous, low-carbon electricity. In Ireland, data centres consumed 18% of all electricity in 2022; if power generating capacity doesn't increase, that percentage might rise to 28% by 2031.
Globally, financial institutions have acknowledged the importance of nuclear power, with 14 major banks agreeing to assist the COP28 climate objective of doubling nuclear energy capacity by 2050.
See: Rising AI Energy Use: A Call for Sustainable Innovation
The Department of Energy (DOE) in the U.S. recently approved a $1.5 billion loan to reactivate the Holtec Palisades nuclear reactor in Michigan. Similarily, Microsoft and Constellation Energy announced that they will be resuming the reactor at Three Mile Island in Pennsylvania by 2028 through a $1.6 billion power purchase deal.
OpenAI proposed building 5 gigawatt data centres throughout the United States with each requiring the power supplied by 5 nuclear power plants. Google is now looking at nuclear power possibilities.
Small Modular Reactors (SMRs)
Startups are innovating too. SMRs are transformative because they provide greater flexibility, scalability, and faster deployment than conventional reactors. As reported by Axios, there are several prominent initiatives on the go:
- TerraPower is building a fast reactor in Wyoming that uses sodium cooling (with Bill Gate's support)
- X-energy plans to use SMRs to power a Texas Dow industrial facility by 2030.
- Oklo is a small nuclear reactor development project backed by OpenAI CEO Sam Altmam with plans for deployment in Idaho.
By supplying data centres and industrial sites with localized electricity, these SMRs can increase productivity and satisfy rising demand.
AI Efficiency and Grid Management
Despite AI consuming tons of energy, it can be used to optimize the energy efficiency of complicated power networks with improved AI forecasting models that balance supply and demand, especially with fluctuating renewable energy sources like solar and wind.
See: AI Leaders and White House Discuss Energy Infrastructure
As an example, Google's neural network model for wind forecasting has increased output accuracy by up to 36 hours ahead of schedule, resulting in a 20% increase in the wind power's financial worth. These kinds of advancements allow energy suppliers to maximize computational loads, sell electricity ahead of time, and encourage more investment in renewable energy sources.
Investor Opportunities
The convergence of AI, data center growth, and nuclear power opens multiple avenues for investors:
- The return of nuclear energy and innovations like SMRs is creating energy infrastructure investment opportunities consistent with Environmental, Social, and Governance (ESG) principles, promoting environmental sustainability and dependable energy supply. However there are regulatory challenges, high starting costs and examples of past project delays (i.e., the Vogtle plant) all pose hazards. Investors must carefully evaluate policy and cost structures.
- Investing in solutions that increase data centre energy efficiency (or AI capabilities) is interesting. Companies that provide AI solutions for energy management, predictive maintenance, and smart grid operations will benefit from the need to improve data centre energy use.
See: How Carbon Pricing Impacts Fintech and Investment Strategies
- Carbon markets and sustainable finance instruments like green bonds and renewable energy certificates are becoming more and more important as the world moves closer to net-zero emissions. These developments are supported by the low carbon footprint of nuclear energy, which presents potential for investments in carbon credits and environmentally friendly financing options.
The Role of Fintech in the Energy Transition
Fintech will play a key role in overhauling the energy landscape by offering innovation solutions for funding, managing, and optimizing clean energy investments.
- By facilitating investments in green finance products, fintech platforms will help institutional and individual investors fund nuclear and renewable energy projects more easily and align capital flows with ESG objectives.
- Blockchain is being evaluated for grid management and transparent energy trading. Peer-to-peer energy trading and real-time renewable tracking is being made possible by fintech solutions which will plug into AI managed data services looking for optimization.
See: Sustainable Business and The Regenerative Future
- Crowdfunding and DeFI platforms are providing sustainable energy finance, for tech like SMRs, democratizing both funding and access to sustainable energy projects and solutions.
Outlook
The intersection of AI, nuclear power, and sustainable finance can help meet the world's rising energy demands while also meeting it's climate and sustainability goals. With AI driving energy efficiency and nuclear delivering constant, clean electricity, investors and fintech can have a key role in transitioning towards a sustainable and lucrative energy future.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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The Rise of Private Markets and Opportunities for Fintechs
Private Markets Report | Sep 23, 2024
Image: F2 Staying Private for Longer (Mackenzie Investments & Northleaf)
Fintechs and Investors Will Benefit from Private Market's Growing Influence
The growth of private markets is changing the investment landscape providing fintechs, investors, and founders with new opportunities for expansion and diversification. The inaugural Private Market Investing Report from Mackenzie Investments and Northleaf Capital Partners highlights that although the value of private markets has increased to $16 trillion USD they still only account for 5% of all the capital in the world. For investors looking to benefit from uncorrelated, high returning assets, private markets are becoming increasingly important as access to infrastructure, financing, and private equity grows. Fintech companies have a unique opportunity to capitalize on the growth of private markets and provide creative financial solutions.
Key Trends and Opportunities
1. Shift to Private Markets
While growth capital has historically mostly come from public companies, more and more organizations are choosing to remain private. More than 90% of businesses in the United States are privately held, and from 2006 to 2023, the number of companies supported by private equity has increased 180% while the number of publicly traded firms decreased by 49%.
See: Fintech Opportunities in Barter and Trade Marketplaces
This change of accessing growth capital from private equity markets is allowing business owners to focus on growth rather than running their operations to meet the requirements of being a publicly traded company. In addition to capital, private equity backers provide strategic guidance that can be a major difference maker in their success and sustained growth.
2. Private Equity and Credit Growth
Global assets under management (AUM) for private equity increased from $2.6 trillion in 2013 to over $10.5 trillion in 2023. The Mackenzie Investments and Northleaf report anticipate AUM for private credit will increase from $1.7 trillion in 2023 to $2.7 trillion by 2028. What's fuelling the growth? These institutions are seeking alternative investments that offer more stability and higher returns than public bonds and stocks.
Fintechs that provide alternative lending platforms can connect private borrowers with private lenders while offering a range of flexible and innovative credit solutions. These platforms can help mid-market businesses obtain development and growth capital, especially if supported by private equity.
See: For Digital Assets, Private Markets Offer the Greatest Opportunities
Also, fintech platforms that facilitate fractional ownership, crowdfunding, or digital investments in credit and private equity can capture a growing segment of individual investors looking for liquidity options including secondary markets.
3. Resilience and Stability in Volatile Markets
The private market investment report talks about the strength and resilience of private markets (vs public markets). For instance, private equity performed better than public markets during the 2022 inflation shock, declining only -3.3% as opposed to -20.9% for public stocks. For investors looking for protection against economic uncertainty, private markets have been an attractive option.
Fintech opportunities include asset management or private market investing distribution platforms.
4. Infrastructure Investment and ESG Trends
Investment in private infrastructure is rising especially in some sectors like ESG (Environmental, Social, and Governance) initiatives. According to the analysis, the yearly cost of global infrastructure is expected to reach $3.3 trillion USD by 2030, with a substantial amount going towards sustainable development.
See: AI Leaders and White House Discuss Energy Infrastructure
Fintech companies have the ability to create platforms that link investors to environmentally friendly projects, such carbon offsets, renewable energy, and sustainable infrastructure. Fintechs can also look to capitalize on the increasing demand for ethical investments by providing investment options in green bonds, climate-tech funds, and sustainable infrastructure.
5. Growing Access for Individual Investors
In the past institutional investors were the only ones who could access private market deals. Today, individual investors can now access these markets more easily thanks to new fund formats and policy changes. According to the research, fintech platforms that aim to democratize private investment are finding new opportunities as a result of individual investors' increased access to infrastructure, financing, and private equity.
Outlook
Private markets are a great source of scale-up capital for growing companies while investors benefit by acquiring assets with strong returns and low correlation that are resilient to the volatile fluctuations of pubic markets.
See: United Efforts to Expand Access to Private Markets
As more and more companies choose to remain private for longer and investment infrastructure demands increase, fintech providers are in a great position to bridge the gap with (private) investors.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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AI Leaders and White House Discuss Energy Infrastructure
AI | Sep 13, 2024
Image: Freepik
AI Tech Leaders and U.S. officials discuss expanding energy needs and infrastructure solutions to support rapid growth
Yesterday, top executives from Nvidia, OpenAI, Anthropic, Google, and other tech giants met senior U.S government officials at the White House to discuss the energy infrastructure requirements to support the quickly expanding AI industry. New large scale data centres are needed along with updating the energy infrastructure to ensure energy demands are inline with supply.
See:
Post meeting, the White House announced the formation of an interagency task group to simplify data centre expansion across the United States and accelerate licensing procedures. The Energy Department also plans to produce a study later this year to evaluate the impact of data centre energy use and provide suggestions to meet the rising electricity demand.
Nvidia’s Call for Collaboration
Nvidia CEO Jensen Huang highlighted the significance of public-private cooperation to meet the enormous energy demands and that the development of AI was akin to a new industrial revolution which would require new energy solutions. The need for AI processing capacity is still growing, especially now that Nvidia's Blackwell processor is going into mass production.
OpenAI’s Infrastructure Strategy
OpenAI announced plans to spend tens of billions of dollars in U.S. data centre infrastructure with up to 40,000 jobs may be created by these investments. The business underlined the risk of lagging behind other countries like China, which is also making significant investments in AI infrastructure, and stressed the significance of these investments in order to preserve American leadership in AI.
OpenAI released in a statement:
“OpenAI believes infrastructure is destiny and that building additional infrastructure in the US is critical to the country’s industrial policy and economic future”.
Renewable Energy and National Security
A major theme at the meeting was the national security risk of falling behind with inadequate energy infrastructure, thus limiting important AI breakthroughs. Renewable energy sources, such as solar and wind power are critical solutions that can help meet energy needs while addressing environmental concerns. The Energy Department wants to support data centre operators with loans, grants, and tax credits to promote sustainable and dependable energy sources.
See: Bitcoin’s Energy Blueprint for the AI Revolution
Closing Outlook
In a bifurcating world, the importance of increased cooperation between government and AI executives is more important than ever, if the United States wants to remain at the forefront of AI innovation without sacrificing national security and environmental concerns. Next up will be moving talks into practical action plans to advance AI and energy infrastructure development in the U.S.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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KOHO Gives Renters a Boost with Cash Back and Credit Help
Product Launch | Release | Aug 27, 2024
KOHO’s new rent reporting, cash back, and insurance empower Canadian renters financially
With the introduction of three new tailored services for renters, fintech pioneer KOHO is once again revolutionizing the financial environment for Canadians. Through its platform, KOHO has introduced Rent Reporting, Tenant Insurance, and Cash Back on Rent, giving tenants an easier way to build credit, safeguard their housing, and get incentives.
1. Credit Building for Renters
With roughly 33% of Canadians renting, KOHO seeks to fill a longstanding gap in the credit system where traditional mortgage payments contribute to building credit, while rent payments do not. KOHO is now making it easier for renters to have their rent payments recognized by credit bureaus, allowing them to build credit histories just like homeowners.
See: KOHO’s Strategic Push Towards A Banking License
KOHO members who pay rent using the site will have their payments recorded at the credit bureau improving their credit ratings over time. KOHO not only reports current rent payments, but it also reports prior rent payments, allowing renters to improve their credit records retrospectively.
Daniel Eberhard, CEO and founder of KOHO:
“The idea that paying a mortgage counts towards building credit, but paying rent doesn’t, is an outdated view of the world. We’re thrilled to bring Rent Reporting to our users. More than that, we’re adding Tenant Insurance and the first cash back on rent program in Canadian history. Newcomers, younger Canadians, and all renters deserve equal opportunities at building wealth. We’re excited to play a small role in that.”
2. Affordable Tenant Insurance
Renters frequently choose not to get insurance due to the high expense of living and growing insurance rates, which puts them at risk of financial difficulty in an emergency. Renters can afford to be protected by KOHO's Tenant Insurance, which makes sure they can meet unforeseen expenses without going over budget.
See: Banking Consolidation as Canadian Western Bank is Acquired
To solve this, KOHO has teamed up with Walnut Insurance to offer renters in Alberta, British Columbia, Manitoba, Nova Scotia, and Ontario reasonably priced Tenant Insurance. It's one of the most affordable solutions in Canada, with monthly costs as low as $22.
3. Cash Back on Rent in Canada
KOHO has also launched Canada's first rent cashback incentive. Rent payments made using the KOHO app can earn eligible users of the Everything plan with Tenant Insurance coverage 0.25% cash back. This program is a part of KOHO's larger goal of empowering Canadians with money by providing tools that enable them to earn, save, and accumulate wealth.
Conclusion
For renters, the innovative trifecta of Rent Reporting, Cash Back on Rent, and Tenant Insurance is a one-stop package towards strengthening financial health. Learn more about how KOHO is revolutionizing financial freedom.
NCFA Interview with Daniel Eberhard, CEO of KOHO on these Exciting New Products
KOHO CEO, Daniel Eberhard
Q1. Rent payments are often overlooked when it comes to building credit. Why do you believe it’s critical to bring rent reporting into the financial system now, and how do you think it will reshape how renters build credit in Canada?
Daniel Eberhard: The traditional entry point of 18-22% unsecured debt via credit card and then graduated to a mortgage is an obviously flawed path, and increasingly out of reach for younger Canadians, and those new to the country, etc.
We really believe all natural behaviours, like rent payments, utilities, cell phones, etc should all one day be part of someone’s credit score. 40% of Canadians rent today. If you look at Canadians below 35 or new to the country, it’s probably 60%. We need a financial system which recognizes and treats these people fairly.
Q2. How does KOHO’s rent reporting compare to mortgage reporting in terms of its impact on credit scores?
Daniel Eberhard: We don’t know yet but likely less impactful to start. All new forms of credit history require a big data set to be built. The bigger the data set, the easier it is to correlate payments with good credit behaviour. I would expect rent reporting to be less impactful today but hopefully in the future, they are equal.
Q3. Can you explain how historical rent payment reporting works? How far back can renters report past payments, and how does KOHO verify them?
Daniel Eberhard: With KOHO’s Rent Reporting launch, we are helping KOHO members build their credit history for free with the rent payments that they already make every month. KOHO reports current and future rent payments made through KOHO by Rent Reporting subscribers to the credit bureau, Equifax, on subscribers’ behalf.
Crucially, for Canadians living paycheque to paycheque, other providers charge for their rent reporting features. FrontLobby costs $4/month and Borrowell is $8/month. And even though Chexy provides their rent reporting feature for free, it is paywalled behind a 1.75% surcharge on rent payments – at the average Canadian rent in August 2024 of $2,201 according to Rentals.ca, that costs users $39 a month!
Canadians can get KOHO Essential for $0 through Qualifying Actions, including transferring at least $1,000 a month into KOHO to pay rent or setting up Direct Deposit, meaning many Canadians can get Rent Reporting for free through KOHO!
See: KOHO’s Strategic Push Towards A Banking License
Historical rent payment reporting is a little different – it enables users to build their credit history using up to 2 years of past rent payments. This can be done by collecting evidence that the past payments were in fact made, and then reporting them to the credit bureau, Equifax. KOHO does not offer historical rent payment reporting today, but is considering it for the future.
Q4. Beyond rent reporting, what other fintech products is KOHO considering to help underserved groups build credit? How does this fit into KOHO’s long-term vision?
Daniel Eberhard: This, along with our credit building products, free credit reports, and cash-advance “cover” and Pay Later products are all incremental steps in KOHO’s broader goal of democratizing wealth creation in Canada. There are more innovative products to come.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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