Xinova and Arc Introduce Arcnet: The Next-Generation Investment Infrastructure
Innovation experts and top-tier financial engineers join forces and launch an online platform where ideas can openly compete for capital
SEATTLE and NEW YORK, February 12, 2019 – Xinova, a global market network of over 12,000 innovators, and Arc, a team of asset managers with decades of capital markets experience, today announced Arcnet, an online capital marketplace that allows investors to find and directly invest in innovation projects and alternative assets. Ultimately, Arcnet will use innovations in cryptography, like blockchain and distributed ledgers, to empower individuals to compete for investment based on the merits of their idea.
Today, qualified investors can now go to www.arcnet.com to view initial investment opportunities. The company will spend much of 2019 developing the platform with a launch of the first version slated for 2020.
Two key distinctions of Arcnet will be the ability for companies to seek capital for early-stage innovation projects and cross-border trading of alternative assets; when an investment opportunity is listed in Arcnet, it’s instantly available to all investors who can capitalize on the up-side of the project, or asset, and invest without the traditional challenges of issuing corporate securities, such as stock or bonds. This regulatory-compliant network will be a win for all involved because it greatly improves the speed of capital delivery for innovation projects and alternative assets and opens the door to more sources of capital no matter where any one stakeholder is located around the world.
Arcnet will simplify the existing capital exchange markets by encoding operations, regulation and distribution onto one network platform that automates manual processes such as authentication, compliance and accounting through a distributed ledger, thereby reducing fees and increasing speed.
For example, 60 percent of today’s investment fees go to overhead rather than to the actual management of assets. In the United States alone, this represents a $47 billion opportunity annually. Today’s financial systems are burdened by out-of-date rules, fees, and systems that limit the ability of capital to flow freely, including what assets are investable. Most of these rules are intended to create a trusted environment where capital can be fairly exchanged globally, but the reality is they create unnecessary complexity.
“It is inevitable that the old financial networks, predicated on physical exchanges, will be replaced by an online platform where ideas can openly compete for capital,” said Bryan Wisk, Co-Founder of Arcnet and CIO of Arc. “Arcnet will be the online platform that reimagines capital markets as a place where anyone can invest or compete for investment based on the merits of their ideas, rather than by proximity to a physical place, like Wall Street or Silicon Valley. The true power of cryptography is to enable open exchange in a way that is trusted by all. This technology has the potential to be the great leveler for humanity, unlocking the never before realized power of human collaboration on a global scale.”
By creating a neutral meeting ground with encoded compliance, participants in a project (e.g. operators, manufacturers, investors, etc.) will be able to interact directly and transparently. Assets and records will be held in cryptographically-secured databases visible to all participants in order to inspire trust.
The initial Arcnet platform will launch with a pipeline of over 100 past concept development projects, that will be listed for investment over time. Examples include a kitchen orchestration software startup, food quality and safety technology and products, and a smart transdermal drug delivery system for minimally regulated substances. These projects are a result of Xinova’s innovation network and are ready for commercialization. Xinova and Arc plan for dozens of new concept development projects are generated annually, providing an already healthy flow of new opportunities for the platform. Innovation project investments range from $50,000 to $100 million per project.
For example, one of the earliest listed projects is a joint venture that invests in fleets of zero-emission buses and related infrastructure to replace the existing fleet of diesel buses throughout Latin America. In the initial stages, Arcnet is pursuing small pilot projects to replace diesel buses with electric buses in Cali and Bogota, Colombia; Lima, Peru; and Såo Paulo, Brazil. In the future, this will be expanded to larger fleets of buses and trucks.
“Due to the region’s heavy reliance on Bus Rapid Transit (BRT) systems for public transit there is an immediate need to convert those fleets to zero-emission vehicles. However, upfront costs and fragmentation across stakeholders have prohibited these solutions from scaling to major population centers,” according to Adam Sherman, partner at Arc. “Even though citizens and government alike see immense value from a zero-emission solution, no individual stakeholder could solve the problem alone. So, we built a consortium of electric vehicle stakeholders spanning four continents to assemble the fleet and related infrastructure.”
Arcnet’s distributed ledger will enable a multilateral consortium between stakeholders, technology suppliers, manufacturers, investors and others to come together under a long-term, shared-cost savings model to deliver solutions and share in the up-side of the project. This gives the resulting consortium a significant market advantage to capitalize on the opportunity as quickly as possible and deploy solutions, in contrast to those trying to solve similar problems on their own.
“Preserving ownership and keeping track of value creation across multiple, normally competitive stakeholders, has traditionally been very challenging. Arcnet changes that,” said Brad Roberts, Co-Founder of Arcnet and Head of Network Platform at Xinova. “For every opportunity, Arcnet will create a new ledger entry that is a permanent record of the economic incentives of each stakeholder. That record will then be secured by the network itself, without being slowed down by the red-tape and inefficiencies of multiple third-party intermediaries that normally exist in securities markets. This enables risk to be shared across many different investors globally and will dramatically increase the rate of knowledge discovery by increasing the number and diversity of ideas that receive funding.”
Arcnet is co-founded by Bryan Wisk and Brad Roberts. Advisors include Edward Jung, CEO at Xinova, and James Gatheral, Presidential Professor of Mathematics at Baruch College, CUNY.
We believe problems are a good thing. There’s a fundamental misalignment of the four key pillars of innovation—technology, talent, demand and capital—resulting in an uneven risk-reward equation for enterprises and innovators alike. We leverage the power of our global network to connect the toughest problems with the smartest minds and best resources. This opens up the path to end-to-end innovation that moves companies from idea to product on-shelf faster and with more return. Xinova changes the risk-reward equation. Xinova is headquartered in Seattle with offices in Bangalore, Beijing, Helsinki, Seoul, Singapore, Sydney, Tel Aviv, Tokyo, and Vienna. www.xinova.com
Arc provides institutions and individual investors with direct access to alternative investments. The team has over 50 years in collective experience in the financial services industry at large financial institutions and now brings that expertise directly to investors. Arc uses the best technology to enable its managers to focus exclusively on generating the highest returns for its clients. https://arcglobal.fund
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