Why we invested in Maps.me

Introduction

Sino Global Capital is excited to announce our investment in MAPS.ME (https://maps.me/). In this investment thesis, we will share our thoughts on MAPS potential to bring huge traffic volume to the DeFi industry by building a DeFi ecosystem on their existing, widely used, infrastructure.

Tourism and Mobile Payments

Pre-COVID, tourism saw a steady rise, with the Chinese middle class increasing their share of global international tourism expenditure.

Tourism
Growing tourism expenditure pre-COVID
Mobile payments growth
Source: Capgemini World Payments Report 2020
POS
Point-of-sale payments increasing

DeFi ecosystem growth

The DeFi ecosystem has been growing exponentially over the past year, leading to gradual evolution and maturity of product offerings, platforms and protocols. The infrastructure necessary to disrupt the traditional financial landscape is being built before our eyes. We are seeing a huge surge of interest for new DeFi protocols in various industries such as lending, insurance, derivatives, DEXes etc.

Defi
Huge growth in DeFi
TVL
Growing TVL, trust in DeFI. Source: DeFi Pulse
DEX
Growing usage of DEXes

FinTech market

When framing the growth of DeFi, it is important to look at other forces disrupting traditional finance. Fintech companies are permeating throughout finance and new start-ups are entering the space to provide more effective and efficient financial solutions.

Source: Andrew Wong
  • Lowering the entry barrier to financial products and services — financial inclusion
  • Banking the unbanked
  • More transparency and accessibility to financial products and services
  • Providing the necessary alternatives to traditional finance

Fintech evolving

Some numbers from the Fintech landscape:

  • In 2018, roughly 3 billion users across the globe accessed retail banking services through PCs, smartwatches, tablets and smartphones.
  • As retail users are already familiar with accessing and utilizing financial services via their digital devices, there is a huge opportunity to onboard some of these existing Fintech users to DeFi.
  • Another noteworthy finding is that 46% of customers exclusively use digital channels for personal banking. Improvements in banking services on online platforms eliminate the need to visit brick and mortar branches.
  • Fintech applications are popular among the younger generation in particular, mainly due to the rise of mobile payment alternatives.
  • The consumer awareness of Fintech services is steadily developing with 96% of respondents to an EY survey being aware of Fintech solutions in money transfers and payments. What is remarkable is the high level of demand for insurance while savings and investments are also well-received:
Source: The Financial Brand
  • This report goes on to outline the changes in awareness over time for each category from 2017 to 2019, clearly illustrating increasing awareness and likely usage in each:
  • This shows how vital Fintech is becoming for mainstream users. By having this alternative, users have access to cheaper payment platforms, improved savings and investment strategies and diverse borrowing options.

MAPS.me

Why is MAPS important for increasing adoption of DeFi?

  • Earning interest. Participants can have their funds flow to a borrow-lending protocol on the Solana blockchain, generating 8% in passive income.
  • Efficient FX. The Maps.me wallet can both hold and convert money across 35 currencies at the best rates and in a transparent way. Travelers no longer need to pay substantial fees for FX.
  • Direct payments. Pay merchants, hotels and restaurants directly. Users have the ability to get the best deals for hotels and restaurants, as well as pay merchants directly, with no hidden fees, from the MAPS wallet.
  • Real-time transfer. Send money to friends without the sky-high fees of traditional alternatives.
  • Trading services. In the future, the Maps.me wallet will enable trading services and offer investment opportunities; giving access to global markets, all powered by Serum DEX and Solana blockchain.
MAPS wallet
Multifunctional MAPS wallet
  • Trust in the Maps.me brand with 47% of respondents open to using its mobile wallet and card when available.
  • Users are cognizant of high FX commissions with 49% willing to use a multi-currency virtual card with low FX fees.
  • Low competitive threat to existing users. 80% of the respondents are unfamiliar with traditional Fintech competitors like Revolut, Transferwise etc.
  • Current limited options for users. 53% have only one currency card from their home bank.
  • As of August 2020, Maps.me had over 140m installs, 1.4m daily active users as well as 27.3m unique mobile users in the previous 6 months alone.
Users
High number of stable users

Potential Risks

  • Regulatory uncertainties as backend is integrated with Solana blockchain and Serum DEX.
  • Incumbent users fail to transition to DeFi if travelers ignore investment opportunities after being introduced to blockchain.
  • High competition with existing BigTechs and new Fintech start-ups such as Revolut, Starling Bank, Robinhood, etc.

Opportunity & Future Thoughts

With the rise of the Maps.me wallet, users will be able to leverage an all-inclusive application serving both their travelling and financial needs. As Maps.me currently serves 140 million global users (with over 58% coming from Europe and 70% aged between 18 to 40) there is great potential for Maps to serve as a Fintech to DeFi gateway. The MAPS team has extensive financial expertise and experience from some of the world’s largest investment banks including Merrill Lynch and Goldman Sachs, as well as financial backing from Sam Bankman-Fried and FTX. We believe that MAPS, as a Fintech behemoth, will be able to boost the growth of DeFi by opening more decentralized financial products and services to both the banked and unbanked.

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Sino Global Capital

Sino Global Capital

A team of former consulting, Wall Street, private equity, government, and corporate veterans accelerating the blockchain revolution