IBS Journal April 2018
45
Even a $50 loan could enable someone to make improvements to their home, cover a medical emergency, or start their own business. To get access to Airfox loans, users must opt-in to the program and agree to share information like GPS, call history and app usage with Airfox. Airfox analyses this information with its proprietary algorithm to determine whether that person should get a loan, and also identify the proper loan size and repayment terms.
On the other side of this transaction are the lenders. The Airfox lending platform enables lenders to send loans to Airfox app users easily. This fast, secure and inexpensive transfer of capital is facilitated by AirTokens (AIR), an ERC-20 token built on the Ethereum blockchain. Owners of AirTokens can use Airfox’s lending platform to loan money to individuals in the emerging markets with less friction than there is with traditional lending institutions.
Airfox app users are segmented into low risk or high-risk tranches based on their trustworthiness score (which is identified by Airfox’s proprietary algorithm), where lenders and advertisers can choose to sponsor AirTokens loans to the risk level of their choosing. Loan recipients can quickly pay back lenders by opting-in to sponsored ads within the Mobile Wallet and earning AirTokens by interacting with these ads. Loans are settled in AirTokens or mobile airtime converted into AirTokens by Airfox and returned to lenders. Airfox manages the transfer from token to fiat and back again for loan repayment.
What is your business model?
Because Airfox’s platform is built on the blockchain, the company can offer affordable rates, reduced transfer fees and transparent loan terms. In essence, Airfox provides consumers in emerging markets with much- needed access to financial services and additional capital through its microloans program.
The Airfox lending platform enables anyone in the world to become a lender. A smart contract allows holders to lend their AirTokens to users, who can then exchange the tokens for mobile data, pay essential bills, and purchase physical and digital goods. By incorporating blockchain technology into mobile phone-based money transferring, Airfox is adding a level of financing, security and reliability previously unachievable.
Airfox generates revenue from multiple sources, including advertising and microloans. Users of the Airfox app can opt-in and allow ads to be shown on their device. An ecosystem of advertisers is built on top of the AirToken smart contract, so each user gets a share of the ad revenue for their awareness. Airfox also takes a portion of advertising revenue to keep its operation running and growing. As a double bottom line company, it’s Airfox’s priority to provide users in emerging markets with the capital they need to partake in the economy and better their lives.
What sets you apart from the competition?
Aside from targeting vastly different markets, the major differentiator between the Airfox app and other mobile wallets like Venmo or Square Cash is that users do not need a bank account or credit card to use Airfox. Instead, users deposit cash into the app at 40,000+ Boleto
Victor Santos with Airfox co-founder Sarah Choi
Bancario locations countrywide in Brazil and establish their credit score within the app. This credit score grants previously unbanked individuals access to the benefits of a bank from their smartphone, allowing them to secure a loan and efficiently manage their accounts.
What was your smartest move?
My smartest move was getting early stage start-up experience as a 19-year-old. Had I not taken an internship with iWorldServices in Berkeley, I wouldn’t have had the opportunity to take a full-time position with the company as a business development manager for Brazil, and it is likely that I would never have started Airfox. I fell in love with technology and working with emerging markets at iWorldServices. I was also fortunate to see how early stage start-ups work and both the good and the bad decisions coming from management. I observed a lot and took the entire process seriously even as an intern. Believe it or not, I was timid and not confident as a kid. When I went from being a marketing intern to full-time sales as a business development manager, I was terrified. From a career standpoint that was the best thing that happened to me – the job not only helped me learn sales but also taught me a lot about the inner workings of an early stage company.
Where did things get tough – what was your biggest setback?
My biggest setback was when my old company failed. Afterwards, I had the choice of either getting a job or restarting with Airfox. With no money and no savings, I jumped right back into start-up land, but this time as CEO and founder. At my previous company, even though I was a founder, I did not have much control outside of my functional domain. The first 18 months of 2015 were brutal, with the company almost shutting down twice due to lack of funding. During that time I lived off credit cards and remained hopeful. Thankfully, in 2016, we got accepted to the TechStars program in Boston and everything changed.
Where do you want to be in five years’ time?
We hope Airfox will be the go-to solution for unbanked individuals in emerging markets around the world. Our goal is to help the poor incrementally build wealth to help break the cycle of poverty and we want to bring that mission to as many people as possible.
www.ibsintelligence.com
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