Nuno Cortesão, Ceo & Co-Founder of Zharta
[FH]: What is Zharta, and what motivated you to create the company?
[NC]: Zharta is the most forward-friendly solution in the NFT space. What does this mean? We are building a way to unlock liquidity for the metaverse and for digital assets, so we are somewhere between a pond shop, a bank, and the new type of credit that is not common in the real world. We operate in a fully decentralized way, and we allow users to request loans in instant time, and unbounded – you can get $1, $10, or $1 million in it by ensuring that we have strong digital assets that work as collateral or a guarantee for your loan.
As to what motivated us to build Zharta, I think it’s aligned with the vision that the world is digital now, and it will be 10 times more in the near future. Kids nowadays play 10 hours of Roblox per day, and no one owns digital property almost in the digital world at the moment. And we believe that in the very near future, the mass market will wake up to these trends and they will realize that there is an opportunity to have digital assets, and we are trying to be at the forefront of innovation by creating a solution that can create liquidity and financial infrastructure for this trillion assets industry that’s being built at the moment. So this is a very big dream: a new capital market is being created and we are one of the key players in the space, and we want to take leverage of the fact that we are first movers, and we are present there at the moment.
[FH]: Zharta is acting in a very competitive market, how have you positioned yourself to have a strong value proposition?
[NC]: It is indeed a very competitive market. Startups are already operating with very aggressive competition, and we have like 10 times more – every day a new lending protocol appears. And what we have been trying to do is to focus a lot, we operate in a decentralized way, we are in a synchronous marketplace, and we ensure that everything that we are building has one north star. We focus on being borrow-friendly and creating a solution that is fair for the players in this space. At that same time, we are creating a fair opportunity for the lender side, but we tried to focus the majority of decisions and deadlocks to be unlocked by having this common vision. Because with this in hand, we ensure that we are short-cutting and building faster, and shipping faster because it’s easier on the decision-making process.
We also have the technological capability and the value proposition, so we build complex appraisal mechanisms, leveraging machine learning to do NFT price discovery. And so with this, we are able to provide very good quotes, we also build risk models for the space, we build simulators to match all the past history, and so with this in hand, and with a very solid Web3 protocol that is composable and that can grow in a very lean way, we are able to be one of the key players in space. We just crossed $1 million in loans last week and we provided one of the biggest loans in the world against Generative Art, more than $258K against a Fidenza, a very specific piece of art, a similar one to the one that was sold by Sotheby’s for $1 million.
[FH] Building partnerships in the Web3/Crypto landscape is one of Zharta’s goals. How did you approach forming partnerships and how did you build your value proposition?
[NC]: That’s a very interesting question. Working on this Web3 space, where the majority of protocols are open source, at least transparent, everything roots on the community that you are able to build, that you are able to foster, and that you are able to provide the tools so that they can leverage and potentially their health. We have been working closely on identifying partners that speak to our own audience. This is critical, as everyone can be a partner, and everyone can be a player, but when you are on a startup, in a niche space, you need to be very tailored on the communication that you are doing. We started with more broad relationships with bigger players and with some key players around so that we could have good partnerships and good ties. But in the last month, we have been focusing a lot on finding the ones that are operating in the same space that we are so that you can identify the Blue Ocean space that we can occupy by also providing tools for the partners that are working with us so that we can provide value to them, and they can provide value to us.
A good example is we are closing a collaboration with an option protocol and sometimes we use that protocol to edge and reduce risk on our protocol, and sometimes they use our protocol because that helps them to leverage their own offer, so creating this kind of synergies is good at the business level. Then, we also focus on creating a wider ecosystem that aligns with this vision of if we want the world to be more digital, if we believe that the world will be there, we need to partner with players in this space. We have a partnership with Metagame Up Down that is working a lot on the Meta Verse space and that was doing initiatives to create carbon-neutral positioning for players. So these are the kind of things that we identify with or things that are very highly aligned with the niche and with the business itself. And also things that compound into the vision that we want to achieve.
[FH]: Having achieved all of this, what is the biggest advice you would give to a startup that is now taking its first steps into the fintech market?
[NC]: Find clients and talk to them very closely. Don’t be afraid. Don’t be shy about going the extra mile. If you find someone that loves what you are doing, be their best friend, and ask the questions that you have. People will tell you what they need, and if you start building for that, people will start to use your product, they will be your word-of-mouth provider, and that reflects on a quote that inspired us a lot in Zarta and that we learned the hard way: “Winners know why people buy. Losers never do.” And when we launched, we weren’t able to find any loaners in the first two months, and it’s a very complex situation when you are launching a product and you don’t have clients. And we went into this quest of why we didn’t have clients. Is it the preposition, the marking, or the conditions? Is it the look and feel, is it the safety? So we went into all of this to find out and the way that we did find out was by talking with real clients. And then we started to fine-tune, fine-tune, fine-tune, and with that in hand, we have been growing 80 % month over month. So summing up, I think finding clients and building something that creates value is the biggest advice I can give.
[FH] How is the Fintech House playing a part in Zharta’s growth?
[NC]: The Fintech house has a very relevant role. We have an office here and the Fintech house helped us with different players. We had a chance to be featured in the Fintech report at a very early stage – We had a very complex, crazy, business proposition that was relevant and they took us as one of the new kids in the block, which was relevant for us in the early stage to start getting some attention. And then we kind of matured the relationship. We got an office here because we realized that there were several opportunities for networking, building good relationships with other founders, and finding people that are having the same struggles that we are, and that are facing challenges like ours. And today, we have the opportunity to talk to them, to share some experience, and to drink some lateral ideas from other industries that we can then embed in our product. So the conditions are very good.
And the Fintech House Team is marvelous. They give us very strong support, it’s a very good relationship between work time and community time. So I think the overall experience is very, very positive and I would advise anyone to join the Fintech house.
[FH]: In your opinion, what are the most promising fintech trends that are likely to gain traction in the Portuguese market over the next year?
[NC]: So the first is AI, that’s the hype of the moment. And that’s also a very big piece of advice, you have to build for the narratives, that’s critical in any industry, and AI crossed a very good challenge with Chat GPT – it became clear how to leverage AI on the day-to-day usage, and now we will see a summer of new applications leveraging these because it became obvious and it will power lots of time-consuming, complex, repetitive work if you are creative and use these tools on your service.
The Portuguese market is a very complex market. We don’t have the size of the international market, so when you are building through the Portuguese market, I would advise for B2B space with very big pain points. And I can give an example, Coverflex tackled a time-consuming, problematic industry that was not facing any disruption. And so on the Portuguese market, it’s a good niche for founders to address if they have some expertise or knowledge in some specific industry like banking, insurance, etc. So things that are not having any new players trying to tackle because it’s not a sexy business – those ones are very powerful tools for finding clients and then to building a sustainable and very repeatable business. I think that’s a trend that sometimes people tend to overlook and I think that’s very relevant.
Third, I would go with digital assets. Not for the Portuguese market because the Portuguese market has some delays to the international market. With the unicorn factory, with Startup Portugal, Startup Lisbon, The Fintech House, and some other key players here, we see that that delay is being compressed – we are starting to be more and more on the verge of innovation, but digital assets have a very big potential because the penetration usage of these assets – cryptocurrencies or things like NFTs or real applications of all of these – is very low, 1, 2, 3 % in the majority of the population.
The market is a complete blue ocean for everyone that can simplify the experience. I see problems of UX and UI on digital assets are a nightmare and are key for industries like mine to grow, because people don’t have any access, or it’s very cumbersome to achieve the first level of usage. It’s hard for scaling because no one uses the internet nowadays, they use TCPP, and people use it to send emails to the other side of the world or to see social media.
To sum up: AI, not-sexy industries as a good bootstrapping space, and digital assets not in Portugal, but from here to the world.