Upon launch, company aims to bridge US$15 trillion gap in sustainable infrastructure development with blockchain-backed investments
US$4.7 million raised to date from strategic backers in the UAE, Saudi Arabia, Bahrain, Kuwait, and Singapore
Fasset, a UK-headquartered fintech company, has launched the world’s first comprehensive operating system dedicated to the ethical financing of sustainable infrastructure on the Ethereum blockchain. Inspired by the UN’s Sustainable Development Goals (SDGs), Fasset hopes to expedite the construction of sustainable infrastructure while providing safe, secure, and yielding investments to a broader investor base. This is in response to increasingly pronounced climate degradation and a clear lack of capital entering the sustainable infrastructure sector—estimated by the World Economic Forum to be moving towards a US$15 trillion deficit by 2040.
Founded in early 2019, Fasset has already amassed more than US$4.7 million raised from strategic backers in the UAE, Saudi Arabia, Bahrain, Kuwait and Singapore. The company aims to bridge the physical, financial, and digital worlds to create and offer a new asset class to all types of investors—“Hard Asset Tokens”, which are digital representations of infrastructure assets, such as solar farms or fiber optic networks. The platform uses blockchain technology to fractionalise these large, previously illiquid assets, representing these “pieces” digitally—similar to traditional stocks in a company representing fractional ownership. As a result, these previously unavailable and unlisted assets become highly liquid, more accessible, and easily tradable—allowing retail and institutional investors seeking to diversify their digital portfolios to invest in a low-risk, highly-resilient, yielding and liquid asset class.
Mohammad Raafi Hossain, Fasset Chief Executive Officer and former Technology Advisor to the UAE Prime Minister’s Office, says: “With climate change expected to cost the world economy US$7.9 trillion by 2050, impacting lives and communities, the need for sustainable infrastructure has never been more urgent. In addition, the COVID-19 pandemic has placed the global economy at a standstill with massive job losses and markets tumbling around the world. The most direct and effective way to accelerate the production of large-scale sustainable infrastructure projects—and in turn, create sustainable jobs for the global economy—is through hard asset tokenisation and the democratising access to these investments. We believe that there is, today, an unprecedented opportunity to equalise the global economy while creating sustainable jobs and fighting climate change—and the time to seize it is now.”
This need for sustainable infrastructure funding is global—while emerging markets are looking to keep pace with urbanisation, developed markets must upgrade deteriorating infrastructure. Meanwhile, as of the end of 2019, US$11 trillion in negative yielding bonds are being held. This gross mismatch in capital creates a unique opportunity for the private sector in its desperate search of high quality assets. However, private sector investors face a cumbersome and inefficient process in financing infrastructure, with issues such as:
Low Levels of Liquidity: Though private infrastructure funds exist, investors have limited exit options and are unable to construct portfolios with optionality;
Large Ticket Sizes: Only the largest investors can access infrastructure investment opportunities due to the magnitude of the investment;
Lack Of Optionality: The nature of illiquidity inhibits optimal portfolio construction, limiting asset diversification opportunities;
High Costs and Fees: Layers of intermediation and a lack of direct investment opportunities lead to higher costs and fees for investors.
To address these issues, which have ultimately limited capital inflows to sustainable infrastructure projects on a global level, Fasset introduces the first of its two flagship products—the Fasset Enterprise Platform (FEP)—aimed at providing tokenisation services to any hard asset owners looking to tokenise their assets for fundraising purposes. By moving the entire sustainable infrastructure financing process to the blockchain, Fasset enables a wider investor audience to get exposure to assets that were previously illiquid, inaccessible, and had high barriers to entry. At the same time, asset owners can bypass costly middlemen to directly list their assets on an exchange, gain faster access to liquidity and court a wider base of like-minded investors. Fasset will also be launching a regulated exchange for hard assets in the near future.
“It’s a well-known fact that infrastructure projects provide dividends for an economy long after the project is finished,” continues Hossain. “In fact, for each $1 billion of construction work, there are 6,000 man-years of employment. In today’s economic situation and with record job shortages worldwide, this is very powerful. Fasset wants to create an ecosystem for the efficient financing of sustainable infrastructure by providing tokenisation services to any infrastructure asset owners looking to digitise and fractionalise equity of their assets. Fasset is just one small effort among a larger and more coordinated global effort needed, but we hope to work towards meeting one of the most urgent needs of our time.”
Jean-Louis Ekra, Board Member for the Africa Economic Research Consortium (AERC) and African power generation developer Globeleq, former President and Chairman of the African Export-Import Bank, and Fasset Advisor, notes: “With the growing threat of climate change and the unpredictable impact of COVID-19, our global economy is becoming increasingly fragile, threatening livelihoods and impacting the most vulnerable communities across the world. It is up to the next generation of business leaders and innovators, such as Fasset, to create greater equitability amongst markets and economies. By merging traditional assets that are the backbones of any healthy economy with emerging financial technology, Fasset is laying strong foundations for sustainable investments, paving the way for a more ethical and sustainable future for generations to come.”
“Cryptoassets and decentralised finance have shown great potential and have secured their place in the global fintech evolution,” adds Lawrence Wintermeyer, Co-Chair of the digital asset members organisation Global Digital Finance with industry-leading patron and advisory council members such as Coinbase, DLA Piper, Huobi, R3, and Hogan Lovells. “DeFi solutions are evolving at a lightning pace and the innovations being built at Fasset will help develop structural fundamentals and financial stability into a space that is traditionally very volatile. As a GDF member, Fasset is aligned to GDF’s mission to further the advancement of the next generation of financial technologies and we’re excited to welcome Mohammad and his team in the community as they realise the future of sustainable investing.”
According to a McKinsey report, a total of US$2 to 2.5 trillion is invested into sustainable infrastructure annually. By taking into account Fasset’s initial geographic focus on emerging markets and in energy and power based assets, the immediately addressable market totals US$135 billion. While there are many players looking to tokenise hard assets, Fasset will be the only full-service platform offering tokenisation
of hard assets with a fully-functioning exchange.
Fasset is the operating system for financing sustainable infrastructure built on the Ethereum blockchain. Fasset offers a platform for the ethical financing of sustainable infrastructure, creating a new class of assets for investors built on blockchain and rooted in real-world, physical investments. This allows for a never-before-possible level of portfolio diversification that enhances people’s lives.