On Monday Farooq Siddiqi, former Global Head of Trade Finance at Standard Chartered, joined blockchain startup dltledgers as co-CEO alongside founder Samir Neji. After departing the bank, Siddiqi spent a year with inventory management startup Falcon and has also been an adviser to dltledgers for around a year.
While the major bank-backed trade finance consortia are still getting going, this scrappy startup, with only $2.5 million in funding to date, has managed to process more than SGD 3 billion ($2.22 billion) in trade transactions in its short life. We spoke to Siddiqi, who noted that dltledgers “has been able to punch above its weight significantly.”
However, the SGD 3 billion figure is lower than the numbers previously reported. More on that later. Having someone like Siddiqi at the top will help to professionalize these sorts of processes. Although sharing the CEO role with a startup founder is not a path for the faint-hearted.
We asked how dltledgers will compete against the big bank solutions such as komgo, we.trade, Marco Polo and Contour. While he wished them well, Siddiqi was blunt: “How many of them can claim to actually have ongoing live business on the platform?” he asked. “How many of them can claim that they’ve moved out of a pure PoC (proof of concept) environment into something which is running, has revenues, etcetera coming in?”
He also noted that several have quite focused verticals. While some might view that specialism as a good thing, Siddiqi sees a benefit in targeting a broader market.
Dltledgers’ location in the major Singapore trading hub is also an advantage and the fact that the government is pushing blockchain. That’s something dltledgers has benefited from directly as the operator of the recently launched government-backed Trade Registry to reduce trade finance fraud. And other countries are interested in a similar solution.
Another big differentiator is that dltledgers’ primary focus is on corporate challenges rather than bank issues. “I think that’s where the key lies in unlocking the value,” said Siddiqi. He recalled from his bank days that “a lot of thinking is shaped around how does it help the bank?”
The other new trade finance competitor is Ant Group and its Trusple solution. While Siddiqi acknowledges that Ant is potentially a serious competitor, he noted that the SME market is huge and has space for more than one player. He also observed that Ant’s payment disruption background is often a domestic space, whereas dltledgers’ focus has always been international.
Inconsistencies in figures
At the end of March this year during a Hyperledger event, a senior dltledgers executive shared figures of transactions processed to the tune of $3.3 billion. It was an online international event and a dollar sign was used on the presentation slide, not SGD (Singapore dollars). And a figure of $3 billion was also mentioned in corporate announcements. It’s currently reporting SGD 3 billion ($2.22 billion).
Given the passage of time, even if it should have been SGD3.3 billion (US$2.45 billion) in March, it would be closer to SGD 4 billion now.
After this week’s interview with Siddiqi, we noted the discrepancy and asked dltledgers to clarify. Permissioned blockchain platforms don’t get the data first hand because it is encrypted. Instead they rely on partners reporting figures. We had a follow up chat with a dltledgers spokesperson. Here’s what she had to say:
“We have the third party data that is coming in and they give it to us in multiple currencies. So obviously we made a mistake somewhere, we don’t know where,” she said.
“We believe our reporting methods were flawed.”
She continued: “Some partners were reporting trades that were entered into the platform including draft and in progress transactions that were not yet completed. And we know this was wrong and now we’ve corrected it.”
Meanwhile, dltledgers is in the middle of doing a funding round, and having a seasoned executive such as Siddiqi onboard can’t do it any harm, which Siddiqi acknowledged. He also said the funding was imminent but didn’t disclose further details.