All quotes and information not sourced have been derived from Traxia’s whitepaper.This is not investment advice and not an endorsement. Always do your own research before investing. My personal opinion comes at the end, feel free to dismiss.
Overview
Traxia’s business strategy is simple, start small and build up. Focus on one niche market, execute, and then move on to others — growing at an exponential rate. They use the term ‘bowling pin strategy’. The whitepaper primarily takes about their first niche market.
They break down their overall strategy into 3 stages.
supply side
educate the client base
broader market adoption
1) The Supply Side
Traxia is first aiming their sights on the import/export market between Europe and China. They plan to establish ‘partnerships with distributors, importers and exporters — focusing on the FMCG (Fast Moving Consumer Goods) market segment.
They claim to be in ‘positive talks’ with a team that belongs to Intermarche, which in ‘2016 had a turnover that surpassed $30bn USD’. Though no official partnership has been announced with the French supermarket brand.
They will use the Loan Warehousing Facility as a strategic advantage over competitors ‘to make it possible to streamline the process form originating of the debt to the bundling and securitization aspect’.
The Loan Warehouse will purchase invoices from Sellers if they are not picked up by investors. It is a way for Traxia to self sustain its ecosystem as they build it up. They fear that without a Warehouse, there could be an initial bottle neck of the service. If a company wants to sell their invoice, there needs to be a buyer, Traxia will use a portion of the funds raised (64%)to buy invoices at the beginning stage of the project.
The Warehouse is an entry strategy and will be replaced by independent banks and Investors at later stages to the development of a fully decentralized market.
2) Educate the Initial Client Base
There is not a lot of information on this segment, but they do say there will be a referral program. It seems as though they will be providing more information in the future. (see opinion at the bottom)
3) Broader Market Adoption
This is where education really helps. Traxia needs to show investors ‘how they can tap into a new market of standardized trade assets based on immutable smart contract’. They believe they can target global investors and hedge funds to move over to a recognized as a reliable ecosystem. Again, there is not much information outlined for this as they are focused on ‘one niche market’ to begin.
Opinion —
It may seem like this plan is incomplete because there is a not a ton of information on educating the client base and broader market adoption. I personally believe that a detailed plan is not 100% necessary right now. It would be nice to read, but this is a start up company. They don’t know how the ecosystem will grow and adopt over the next year.
The import/export market seems like a great place to start for this project. The market is already used to invoice factoring. If Traxia can make the process hassle free and cheaper, its a logical progression for these companies to move towards Traxia. But, this heavily depends on how easy the transition is going to be for them. From my research into the Loan Warehouse and the Issuing Provider, it seems like the main goal is to make this transition easy. Time will tell if they can complete this monumental task.