Fintech Focus Roundup For October 3, 2020

CME Group Tackles Water Scarcity

What's Happened: In partnership with Nasdaq Inc, CME Group Inc, the world’s largest derivatives marketplace, formally announced it plans to launch a futures contract this year based on the Nasdaq Veles California Water Index (NQH20).

Water Scarcity And Futures: Water scarcity is an emerging challenge in the 21st century.

In farming — both a cause and casualty of water scarcity — the impact of challenges such as climate change, on freshwater resources, has created water price volatility, which in the past was difficult to hedge against.

“Water is a critical and vital resource,” said Tim McCourt, global head of equity index and alternative investment products at CME Group. “Around 2 billion people already live in geographies that are experiencing high water stress. If you look at some of the reports, just a few years out, by 2025, nearly two-thirds of the world’s population could be facing water shortages.”

The CME product based on the the Nasdaq Veles California Water Index comes at a time of concern regarding water price volatility, and on the heels of its push into sustainable investing with the launch of the E-mini S&P 500 ESG index future.

Its unit of measure represents the U.S. dollar price of the water needed to submerge an acre of land in 1 foot of the resource.

NQH20 futures will be cash-settled, allowing participants like crop producers to gain financial exposure to the value of 10 acre-feet of water.

“When you’re looking around the agricultural complex or commercial end-users, these folks and institutions have real needs around risk management and need access to water for consumption or as a raw input into their process.”

How MarketXLS Democratizes Investment Research

The Problem: Success in financial markets is very much dependent on an investor’s ability to analyze, plan and execute. Doing so, however, can be made difficult by high barriers to entry, such as data costs and financial literacy.

The Solution: MarketXLS is one fintech lowering the barriers to entry in investment research.

The company is a provider of market data analytics tools that plug into spreadsheet softwares such as Microsoft Excel, and allow market participants access to real-time and historical data on stocks, ETFs, options, currencies, mutual funds and indices.

Core Product: The company’s core product portfolio consists of the following products:

• Live and historical stock data.
• Portfolio optimization analysis.
• Inbuilt and custom indicators.
• Pre-made templates, models.
• Fundamental data and charts.
• Media and news integrations.

The company’s product shines in risk and volatility analytics, said founder and CEO Ankur Mohan: “Things like risk matrices, visualizations of return and volatility, as well as portfolio analytical functionalities can be accessed with very simple functions.”

How iownit Is Revolutionizing Private Markets

The Problem: Private placements allow companies to sell stock shares or bonds to investors, foregoing the regulatory obstacles IPOs present.

The problem with private markets? They’re opaque, costly and nontransparent.

The Solution: Founded in 2017, iownit is a fintech specializing in digital private securities. The company is a pioneer in the listing, investing and trading of private securities on distributed ledger technology.

“We use blockchain as an underlying technology because it works well for a variety of instruments and transaction types,” said Rashad Kurbanov, CEO and co-founder at iownit.

“We introduced our technology into the private securities markets in order to make the market more efficient, reduce transaction costs, and eliminate the complexity that exists today for investors, issuers, and all the intermediaries.”

Impactful Tools: “We are an actual broker dealer, alternative trading system, assisting companies, issuers, and sponsors in issuing their digital private placement securities,” the CEO said. “The secondary market transaction platform is where purchases and sales can happen, as well as provide a number of other technology and services around digital securities.”

The company’s core product portfolio removes the complexities associated with using blockchain technology for funding. The platform’s interface, according to Kurbanov, is similar to a brokerage account.

How It Works: On the back end, organizations seeking to raise capital come to iownit and complete pre-manufactured templates that get transferred into smart contracts encoded with compliance elements.

In as little as three minutes, front-end investors can open accounts and invest, also.

“From the issuer side it takes time. We’re focused very much on ensuring that we collect and provide the information required for somebody to make an investment decision."

How FindMarketPlays Simplifies Research

The Problem: Generally, brokerage trading platforms are packed with features that can inhibit overall functionality and ease of use. One company that successfully resolved this pain point is Robinhood, whose trading experience is intuitive and non-complex.

The Solution: FindMarketPlays is a fintech company that's following in Robinhood’s footsteps, simplifying the research process for active investors. In the simplest way possible: FindMarketPlays reduces information asymmetry and barriers to entry in financial markets for active investors.

“I made this platform to solve one of my own problems,” said founder and CEO Yannik Sood. “I’d go through Reddit to find ideas and research, then I would go to a different website to research some stocks, and then another to find unusual options.”

The company's core product portfolio consists of charting, fundamental data, unusual options activity, as well as custom watchlists.

Recent Developments: In light of increased engagement in financial wellness, FindMarketPlays honed in on product innovation, releasing a research tool that acts like a Tinder for stocks.

“Our algorithm presents you with companies,” Sood said. “You get a description of the company, a chart, and then, when you swipe left, you get rid of the company, or you swipe right, and you add it to your watchlist where you can see unusual options or an analysis of the stock.”

How CleanSpark Stores Solar In Tesla Batteries

The Problem: The larger, "macro-grid" has become antiquated, experiencing problems from generation, transmission, natural disasters and growth. Microgrids, which are collections of energy generation, storage and distribution assets, have become more prevalent of late. The challenges include the difficulties of integrating multiple brands of assets within a single ecosystem.

The Solution: Founded in 2014, CleanSpark is a microgrid software and services company that improves energy infrastructures using proprietary, data-driven technologies.

In the simplest way possible: CleanSpark enables energy users to obtain resiliency and economic optimization.

“Our core focus is data analytics, software, and intelligent controls,” said chairman Matthew Schultz. “According to a recent IBM white paper, they stated that 'We’re on the leading edge of the cutting edge.' Our approach puts the decisions and the control of the purchase and consumption of energy back into hands of the consumer."

Core Product: The company’s core product portfolio consists of two core products:

• Microgrid Value Stream Optimizer (mVSO): A Software as a Service (SaaS) energy platform used by developers to properly model microgrids for end-use customers.
• Distributed Energy Controls (mPulse): Technology agnostic energy management and supervisory control software that uses A.I.-honed principles to forecast and modify microgrid behavior.

Use Case, Recent Developments: CleanSpark recently commissioned software on a new solar plus storage microgrid project in Central America for Micro Technologies SA, an assembly and manufacturing company.

As part of the development, CleanSpark’s mPulse system will help the manufacturer cut costs and store solar power in Tesla Inc batteries.

“It allows them to generate power through solar and then store that power in the Tesla battery system controlled by our software,” Schultz noted.

“They can buy cheap power from the grid during off-peak times of the day and then use that stored solar energy later on in the day when utility rates have gone up, thereby avoiding those increased utility costs and saving that industrial equipment facility overall on their power bill for years to come.”