We’re there.
We’ve finally moved forward from ‘you have ‘blockchain’ in your name, here’s $20m’ to ‘yes yes, blockchain, we get it – but what’s the business model?’ – and that’s a great thing.
The great blockchain reckoning is forcing companies to get serious about what they’re actually going to do to make money going forward, which is great for investors who don’t treat their portfolios like they’re a 2AM trip to the casino after the Kraken has run out.
We love blockchain but, for the 70th time, it’s not a sector. It’s a thing you use in other sectors to make those sectors run better. It’s as applicable to commercial fishing as it is to banking as it is to figuring out which Rocket League server has good ping and open slots at 9pm on a Thursday.
So, yeah. I play Rocket League. Come at me.
CUV Ventures (CUV.V) recently changed its name from Cuba Ventures, I’m guessing so that people will see them more as a global play than a strictly Cuban deal, and they’ve avoided sticking ‘blockchain’ in their name, even though that’s a cheap way to a stock pop.
What they are is tough to categorize because it’s not a simple one note proposition.
In essence, CUV Ventures is opening up Cuba’s financial industries to the world after a half century of sanctions and boycotts.
It started with a bunch of tourism websites that help people navigate how to travel to Cuba, where to stay, how to change money, etc. That was the trojan horse to get Cuba’s government on board and in a trusting state of mind.
Then they added a remittance payments deal attached to crypto ATMs, where people could avoid Western Union and send their US dough back home to mama. That’s a decent business, but it’s not enough, and Western Union has finally figured out it needs to compete and not just rip off customers to the nth degree so they’ll be fighting back at some point.
You don’t ‘only’ want to be in that business. You want to expand outwards from that base.
What CUV really wants is every business deal with Cuba, every paycheque sent back to relatives on the island, every box of cigars and every Cienfuegos Elefantes baseball jersey sold on eBay, every wealthy industrialist looking to purchase Cuban goods and services, and every Cuban entrepreneur looking for factoring financing as the economy opens up – to do that business through CUV.
Essentially, they want to be Cuba’s bank.
Again, no pressure.
I mean, to become Cuba’s bank, their financial intermediary, an organization that could open the door to government and industry and entrepreneurs and financing… to make that happen, you’d need like… to be registered as a FINTRAC Money Services Business, wouldn’t you?
CUV Ventures Corp. has signed a definitive agreement to acquire a 10-per-cent minority stake in Duales Inc.
Shareholders are advised that, with the minority acquisition of Duales and resulting equity partnership, deliveries of remittances through the blockchain-secured Revolupay app, into select Caribbean and South American markets, can be ensured as both standard financial deposit and personalized home delivery scenarios. Further, as Duales is a licensed FINTRAC MSB (money service business), Revolupay app users and the company will be afforded the utmost in financial safeguards.
Okay, but you’d need a banking license, wouldn’t you?
The company is in the final stages of incorporating the aforementioned wholly owned European subsidiary. Revolupay Europe will be headed by European resident, CUV Ventures director and veteran banking professional, Alfredo Manresa, who will act as director of the sister company. The subsidiaries function will be to handle the worldwide load, or inbound funds, onto app user’s wallets, in conjunction with licensed international correspondent banks and Revolupay Europe chosen banking partner Bankia. Revolupay Europe is to immediately pursue its own EDE (electronic money institution) European banking licence. Initially, until the said licence has been obtained, the company is in the closing stages of signing an agreement with one of Europe’s largest EDE licensed entities. Through this partner, wallet loading is already considerably lower in cost than the 2 per cent initially anticipated. Revolupay Europe has also opened its first bank account with Bankia, currently Spain’s fourth largest bank. The company has chosen Bankia because it is a major purveyor of bank emitted remittances into South American markets and promises to be a venerable partner with the non-home delivery remittances.
Okay then.
Maybe Cuba, while a great little market with significant barriers for others to enter, isn’t broad enough. If you’re going to spend the money putting all this together, you want economies of scale by being able to point that heavy machinery in multiple directions.
Maybe Mexico?
The company is in the early stages of incorporating the aforementioned wholly owned Mexican subsidiary and has received initial approval from the Mexican authorities. The Mexican remittance market is currently $26.8-billion annually. Revolupay Mexico will be headed by Mexican resident, CUV Ventures adviser and attorney Walfrido Quinones, who will act as director of the sister company. The subsidiaries function will be to handle the remittance disbursement, or outbound funds, from app users’ wallets in conjunction with licensed correspondent banks. Revolupay Mexico will act as an in-country co-ordinator between approved financial institutions, master franchisee and app users.
Not enough? CUV never sleeps.
Status of Revolupay world filings
- United States — preliminary approval;
- European community — applications approved;
- Canada — applications in final examination stage;
- Russian Federation — applications in final examination stage;
- China — applications in final examination stage.
Wait a second – weren’t they looking at crypto mining a while back? That sounded like maybe a sector play because crypto was hot for a minute, rather than real business, so what happened there?
Data mining
Management has begun exploratory research into crypto data mining. The findings are that the existing business model, where new mining rigs are purchased and/or where power costs are prohibitively high, necessarily renders this activity unprofitable. Consequently, management firmly identifies a synergy between possible future iterations of its CCU coin and a secondary supplementary revenue mining existing crytocurrencies. However, a business model which includes building, leasing or acquiring a data centre and subsequently purchasing mining rigs is considered economically unfavourable. Nevertheless, the company is analyzing two separate existing opportunities where powerful supercomputers or existing legacy data centres could be adapted to fulfill the crpytomining task with negligible financial outlay. The company will continue to investigate this opportunity and update shareholders with regard to the resulting viability and possible revenue yields forthwith.
Dammit, that’s some responsible stewardship right there. They’re doing the business of crypto functionality without riding the ‘we’re mining crypto and it’s going to be worth billions by itself’ bullshit.
So that’s a lot of stuff going on, admittedly. Clearly CUV are getting busy at the pointy end and putting things in place that could get them where they want to be, but there’s a massive stumbling block that they need to get past before any of this is real.
And, frankly, it’s a big one. It’s potentially the biggest one.
Before you start sending money around the world, you need a stack of money ready to send.
Have you ever tried to finance a bank? That’s what we’re talking about here.
I mean how could CUV ever get its hands on oh wait they did it.
CUV Ventures and Vesilen Investments are to launch a proprietary financing platform to facilitate short-to-medium-term loans and factoring for transactions, both private and international, with an initial capitalization of 40 million euros (approximately $63-million). All seed capital for loans is to be provided by partner Vesilen Investments.
Couldn’t possibly be a thing.
Highlights of the definitive agreement with Vesilen Investments:
- Up to 40 million euros ($63-million) financing;
- Annualized interest of 9.5 per cent to seed investor partners;
- Approximate annualized commercial loans at 14.5 per cent;
- Risk committee consisting of six members to vote on loan approvals;
- Three risk committee members from CUV Ventures;
- Three risk committee members from Vesilen Investments.
Alrighty then. $63m isn’t chickenscratch. That’s enough to get out there and start financing loans.
While they’re at it, CUV has bought into Cuba specialist travel agencies, taken a piece of a Cuban trade magazine that goes directly to US Senators and Congressmen charged with opening up Cuban-US trade, and their RevoluPay and RevoluFin platforms are nearing completion.
None of this would be possible without the CEO’s years long business track record with Cuba and good feels established with the country’s government but what’s really impressive is this company isn’t just doing things that necessitate a news release, they’re doing enough things that they’re having to put multiple news stories in a single release.
And these aren’t small things – getting access to $63m in loan financing, whenever they need it? That’s ridiculous for a company with $2m in the bank.
I’m going to leave you with one last thought on this: A lot of blockchain companies are hoping to one day build something that the financial world will incorporate, so they can get a piece of transactions that said banks get a piece of.
CUV is cutting out the middle man and just being that bank.
Cuba’s bank. I’m in.
— Chris Parry
FULL DISCLOSURE: CUV Ventures is an Equity.Guru marketing client, and the author has purchased stock in the company.
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.