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Supply@ME Capital
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== What's the business strategy of the company? == === Product development === The price of the finance (i.e. the finance cost) is a key factor in the demand of the finance (and, therefore, the profitability of Supply@Me Capital). In other words, the lower the finance cost, the higher the finance demand, and vice versa. Consequently, we expect product development to be focused on just that (i.e. lowering the finance cost), as well as improving the accessibility of finance, in particular via the following main areas, in order of importance (from highest to lowest): ==== A suitably large inventory-related database and machine learning ==== A key ingredient to lowering the finance cost is inventory-related data. That is to say, the more inventory-related data to which an inventory-finance provider has access, the lower the finance cost (and, ultimately, the higher the finance demand). Accordingly, we believe that building a suitably large database of inventory-related data is key for the success of a company in the inventory-finance space, and, therefore, thatβs where Supply@Me Capital needs to focus its energy. Indeed, a study by the International Monetary Fund (IMF) detailed that "the absence of comprehensive trade finance data posed a significant hurdle ... to make informed, timely decisions".<ref name=":2">https://www.imf.org/-/media/Files/Publications/WP/2019/wpiea2019165-print-pdf.ashx</ref> For us, therefore, a key milestone is the hiring of a chief technology officer (CFO) and senior data scientist (i.e. someone who has around five years experience with Python or another similar programming language), which we estimate will cost the company around >Β£100,000 per year each. ==== Internet of things ==== One key way to gather lots of useful information about inventory is to add sensors to the inventory and track the inventory over a communication network, such as the internet [i.e. via the Internet of things (IoT)<ref>The Internet of things (IoT) describes physical objects (or groups of such objects) with sensors, processing ability, software and other technologies that connect and exchange data with other devices and systems over the Internet or other communications networks.</ref>]. Indeed, the aforementioned IMF paper mentioned that the IoT will allow the real-time tracking of goods, which could become an important source of (big) data.<ref name=":2" /> ==== Smart Contracts ==== Another way to lower the finance cost is to execute events (and actions) according to the terms of a contract (or an agreement) automatically, via something called Smart Contracts<ref>A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement. The objectives of smart contracts are the reduction of need for trusted intermediators, arbitration costs, and fraud losses, as well as the reduction of malicious and accidental exceptions.</ref>. ==== Distributed ledger technology ==== Evidence suggests that recording inventory-related information (i.e. inventory finance transactions) on a distributed ledger<ref>A distributed ledger (also called a shared ledger or distributed ledger technology or DLT) is the consensus of replicated, shared, and synchronized digital data that is geographically spread (distributed) across many sites, countries, or institutions. In contrast to a centralized database, a distributed ledger does not require a central administrator, and consequently does not have a single (central) point-of-failure.</ref>, such as blockchain, will result in inventory-intensive companies financing their inventory much more efficiently<ref name=":2" /><ref name=":4">https://www2.deloitte.com/content/dam/Deloitte/sg/Documents/finance-transformation/sea-ft-crunch-time-iv-blockchain.pdf</ref>, ultimately leading the companies to improve/maximise their profits<ref name=":3" />. Accordingly, for us, the implementation of distributed ledger technology is a key milestone. ==== Other types of finance ==== We expect that once the company has captured a large enough share of the inventory-related finance market (say 10%), the company will then move to other, broader areas of finance, such as non-inventory-related assets (such as accounts receivables) and the business as whole (i.e. business loans and equity). === Sales and marketing === As touched upon earlier in this report, we expect Supply@ME Capital to initially target Italy-incorporated, early-stage inventory-intensive companies. The company has developed one of the first Shariah-compliant inventory finance platform, and, it, therefore, makes sense to target people who follow Shariah (i.e. Muslims). According to the 2016 World Islamic Banking Competitiveness Report, Saudi Arabia, Malaysia, United Arab Emirates, Kuwait, Qatar, and Turkey represented over 87% of the international Islamic banking assets.<ref>World Islamic Banking Competitiveness Report 2013β14 EY Global Centre of Excellence, Bahrain.</ref> Accordingly, we imagine that once the company has captured a large enough share of its initial market (say 10%), the company will then move to other geographically markets (i.e. Saudi Arabia) and target audiences (i.e. Islamic inventory-intensive companies), with the aim of going global.
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