The Achieve Podcast - Sanjeev Birari (Zoniqx)

Welcome to the Achieve Podcast, the show where we highlight the leaders, creators, and entrepreneurs who are building meaningful businesses and shaping their industries. I'm your host, Stephen Bunker, and today we're excited to learn from Sanjeev, co-founder and CBO, Chief Business Officer, with Zonix. So Sanjeev, for those getting to know you, can you give us the quick backstory of the business?

Um, sure, um, so thank you so much for having me here. Um, yeah, it's a, you know, it's been, uh, quite a good ride since 2017 we've been in this space. So what we do is actually, um, if at all, if you have heard about digital assets, in digital assets there is, uh, you know, one particular application which is the institutions and most of the, uh, enterprises are actually in in demand and getting that particular thing adoption very high is actually about real-world asset tokenization. What it does is, is actually any ownership of any real-world assets, it actually puts that ownership on blockchain so that you get the advantage of, you know, fractionalize that particular asset or, you know, trade that asset like T0 settlement or, you know, 365 days. You can actually trade that asset as a security. So these are all securities governed by the regulation and the compliance of the regulations which you operate in that particular jurisdiction. So that's what we've been doing since past 2017 till now.

That's fascinating. And at this stage, like, what would you say is actually driving growth for you currently?

See, honestly, the adoption has actually started, you know, really at the inflection point only since past, you know, uh, 1.5 years. The reason being because the, the current administration has, you know, uh, kind of more, uh, giving, uh, the regulators and compliance more leniency in the digital asset space. So, uh, what we've been seeing, the regulators are no more kind of like blockers, they are more enablers. So, you know, it has changed like literally 180-degree change over the last 1, 1.5 years. And then that's one of the reasons that the And then of course, the Clarity Act, you know, the Stablecoin Act, Genius Act is actually, you know, kind of increasing the digital assets adoption over the years quite significantly high over the last 1.5 years.

Okay, so it's probably been a pretty wild ride at this point, just with the growth and all the change. Can you tell me, like, looking back for you personally, like, what are the turning points, both positive and negative, that have changed how you think about running this organization?

Um, it's actually, um, you know, if you see, uh, the— what we have been— what we actually have learned over the years is, uh, because this is highly regulated in a compliance space, right? So, um, these are not like NFTs or meme coins or Bitcoin. This is— we're using blockchain for, for an enterprise and institution-grade adoption, right? Where Literally, this is gonna be the future of finance. Like most of the Wall Street actually are, say DTCC is doing the settlement, are gonna be doing the settlement of almost trillions of dollars of transactions on blockchain. They already applied it with SEC. So I think if you see, this is a significant transition from what the traditional finance used to do and what exactly is going to happen over the, over the short, you know, probably next, uh, 3, 4 quarters from now. So what we've been seeing is, and this is a major, you know, kind of upgrade for Wall Street, you know, 2.0, right, is what we've been seeing. So, and it is because it's regulated and compliant, it's actually, uh, it took the, the adoption sometime and the market sometime, but I think it's, it's happening right now. So We've experienced and we are fortunate to experience this particular drive over the years. The adoption right now is happening pretty, pretty fast with the lightning speed, just like what AI is doing, right? I mean, AI agents are actually end up literally moving with the lightning speed every day. And most of the industries are actually having that AI agent's impact in near future. That's exactly how Blockchain is actually, you know, moving fast as well with the regulators and compliance, you know, notifying this whole change.

So as you're trying to grow and expand, like, what's been the biggest bottleneck or obstacle that keeps showing up and like getting in the way?

Yeah, I mean, the— as I said, you know, it's a regulated and a compliant space. The adoption always takes— the technology adoption always takes time for this space. And, you know, the— over the last 1.5 years, because of these, uh, the, the recent acts, uh, you know, from the, uh, the regulatory and compliance, uh, side of it, I think the adoption is moving pretty fast. But that was not the case, you know, just one— just previously, uh, 1.5 years back, it was growing very, very slow, uh, even though they know that there is a benefit to it. It's actually— it was not, uh it was not going that fast, but now it's actually going fast. So I think that was something which was our worry. But now, but we still see that, you know, the digital asset adoption is still not there, you know, even more than 50%, because, uh, the Clarity Act or the Stablecoin Act is actually going to get passed, and then it'll take some time, uh, you know, to reach to the common people to actually have a wallet and then, you know, trade that wallet and any additional asset, you know, securities in the US.

Yeah. So when it comes to the messaging and outreach and communication of those changes, like communicating with regulators, communicating with your buyers, like what's been working well to kind of drive that adoption?

We are, we are quite, you know, engaged in the roundtable which SEC does or the regulators does. So we, we do go contribute there. And that is something which is, you know, with the current, you know, administration, we've been seeing that that's quite a big, you know, growth or the, you know, the way for us to, you know, kind of contribute. Like, we as innovators in the technology space, we would love to contribute because that's what our experience is. So I think that— but there are definitely, you know, bottlenecks as well that we cannot reach out to everyone and say, hey, this is something which you should be doing it. So, you know, Thanks to you guys. I mean, you know, you guys been doing this podcast would actually, you know, this is a good medium for us to reach out, you know, multiple, you know, avenues for us to, you know, kind of tell the actual real, you know, the advantages of blockchain and where, you know, the future of finance is heading. So I think that this always helps.

Who do you feel like your primary customer is like? Is it just the end user of your software or?

Our— so we— what we have actually developed is it asset agnostic, you know, uh, private label and a white label solution. So asset manager, family offices, pension funds, endowment funds, sovereign funds, um, whoever would want to actually, you know, get into the digital asset space, uh, by actually converting their, you know, real, real-world asset ownership into a digital asset, which is by doing real-world asset tokenization, we offer that compliant and regulated way. So Our primary, our primary clients are actually, you know, the asset managers and family offices. Yeah.

So primarily, and then with the family offices, the pitch is basically like, hey, take your assets that are currently like physical or hard to monetize and actually turn it into a digital asset that can like—

okay. Yeah. Because what we see is, you know, I mean, this is not a bold statement, but then you know, most of the assets are going to be on blockchain because of the, the benefits, right? I mean, you actually create liquidity. The LPs are not, you know, always dependent on GP to get an exit because now their LP interest is, uh, just like, uh, any regular share which can be, you know, kind of transacted on any exchange in the world, you know. Of course, wherever the Uh, the securities are actually— can be traded as per the regulation and the compliance of that particular—

oh, that's really fascinating. So like, if someone sets up a fund, do you think this would actually give people who are not like accredited investors the ability to potentially invest some assets more easily?

Yeah, I mean, we right now, we all— what we're doing is only the accredited investors because these are certain private placements offerings of certain exemptions like Reg D-506(c), Reg D-506(b). This actually only targets the accredited investors, but we've been seeing that, you know, even the regulators are actually knowing the criteria. They are actually talking about more lenient on coming up with, you know, the criteria for accredited investors, right? So I think if that happens, you could probably see more retail investors could probably you know, access these kind of securities, and to— and that would actually generate a lot of liquidity in the market, right? So that's, that's what we've been seeing. Uh, so, but yeah, I mean, at this point of time, this is only for accredited investors.

Okay, kind of a side tangent here, but with all the buzz around AI and automation, have you guys found ways to utilize that within your business?

Oh yeah, I mean, we've been— in fact, when we started the company, it was blockchain and AI focused only. In fact, the— we are, we are probably the only, uh, you know, company in digital asset space where we are actually, you know, kind of— we created an operating system. It's the world's first AI, you know, operating system where you can actually, uh, you know, have deployed AI agents. Like, we have— we already have like almost 11 AI agents which actually can easily, you know, uh, get the onboarding compliance, uh, you know, and the distribution done of these securities in a compliant and a regulated manner. So as I said, AI is rapidly moving, and we would actually want to, you know, kind of why we're using AI, the reason being because of course performance. The second is, you know, the, the AI agents would actually literally simplify those things which we which human would probably take, you know, more hours, right? And now with all of these, you know, things are happening parallelly, we've been seeing— we, we really wanted to be more curious and cautious about because it gives the security. So, you know, financial securities have a regulation and compliance, so we have to, you know, kind of catch up with that mode. So that's one of the reasons that we We recently launched, uh, you know, our more kind of like AI-focused, uh, operating system, which is, you know, uh, which is— this is going to be kind of the first, you know, uh, tokenization infrastructure, because we feel tokenization infrastructure must be intelligent and not just compliant. So Zonix is like, you know, building the first AI-native operating system for tokenized real-world assets. So that's basically what we've been focusing on.

How do you feel like that impacts the customer as far as like differentiating yourself?

Yeah, I mean, it's, it's, it's in fact, you know, we are going to be deploying these agents with the actual live use cases which we already have. So see, the AI has moved pretty rapidly over the last, you know, uh, probably 1.5 years, uh, more significantly over the last, you know, 3, 4 months. So I think we've been seeing a huge adoption, and, you know, the common person would like to actually use AI, and because they know the benefits, right? So when we are actually deploying these agents, which actually can simplify, you know, their work, see, uh, or workflows, or probably, you know, their performances are getting more different skills, actually It is a challenge for them to, you know, easily adopt these, you know, technology because it's moving pretty fast. But I see, you know, it's just a matter of time. You know, humans would get adjusted to the AI agents pretty fast is what I see is happening in the near future.

So when you think about just the next stage of your business, what are you most excited about?

I mean, we are super, super excited about, you know, the future of finance because we see there's a lot of, you know, the liquidity is being tapped and we, we can get that access by actually putting this, you know, converting them to our digital assets. And we are so much excited about, you know, getting all of these private credits, you know, uh, private capital markets, private equity, venture capital, you know, invoice factoring. There are a lot of these use cases like we are working on one of the, uh, you know, uh, a basketball team, the ownership of basketball team, uh, it's actually going to be on chain. So you can own that team by paying like whatever that token price is. So it's quite exciting, right? I mean, though, so this is something where you actually can see the benefits. Like you're a fan of one particular team, right? You can actually own that team now instead of only owning those merchandise, right? You can actually own that team. Right, so that's actually quite fascinating for, you know, different, different types of, you know, kind of, uh, the industry sectors. This is more sports-driven, but there is private equity. You can now own, you know, um, uh, probably, uh, uh, something which is where we are working on it, uh, a US, you know, uh, federal contracts which is giving, you know, uh, a 6% of returns, and you can own those contracts by putting like $10,000 a token. and the token holders are going to be getting directly paid by the Department of Defense because they are— there's a, you know, contractual, uh, relationship of, you know, they paying directly to the token owners like 6% returns, right? So such kind of like really, uh, you know, very innovative, uh, you know, use cases are actually getting tokenized and digitized on blockchain.

That's fascinating. Um, so when you do convert and make these assets more liquid, how does that affect people from like a tax and liability standpoint?

Yeah, I mean, so, you know, we are, we are not tax experts, but we, because we are, we are a technology infrastructure company, so when we structure those things, I mean, these are securities, so of course we are not going to be— you have to abide by what, you know, the, the, the tax, uh, implications are going to be, uh, and those are— you cannot avoid that because that's something which, you know, it has always, uh You know, so these are securities, are the standards what we have as per what, you know, the tax liability for any of these, you know, financial instruments would anyways eventually be there for these assets as well.

So, uh, yeah, my main question was just like, I'm mostly just genuine curiosity, but like, let's say you have an asset that's like a real estate asset, but then you tokenize it. Like, what kind of— like, does that recategorize the asset? Like, does it become a security rather than real estate from a tax perspective, or how does that work?

Yeah, I mean, it is a security because when you are doing a private placement, it actually comes under the, you know, security exemptions. So yeah, because the ownership is into the SPV, and that SPV rights, you're going to be tokenizing it under certain exemptions, right? So it is a security. So Yeah, yeah. And then it, it would always have the, uh, you know, the, the, uh, the tax liabilities, what, whatever, you know, the, that particular asset would have. So it's not—

yeah, that's interesting. So when you look at your own journey of the wins and the mistakes, like, what lessons have stood out to you on this journey?

Um, I mean, it's, um, it's, it's a 9-year journey for us, so we, we, we've learned a lot. It's, uh, when we had this idea, we thought, oh, this is so easy. I mean, you know, tokenizing the, you know, the interest of an LP and, uh, trade it on a, you know, any exchange, it is so fascinating, right? But then when we got into this, we realized that this is— these are securities. So securities has got certain exemptions. You need to embed those exemptions. And this is something which is— and that's one of the reasons that we built a regulated and a compliant, uh, you know, operating system which for digital assets, which actually can give you, uh, you know, in 48 hours you can issue those securities provided you have been— you have the structure ready from your legal, uh, to issue those securities under certain exemptions. So it's a— it's kind of like a— we're still learning. I mean, you know, it's— it's— we— the learning would never stop. I mean, so You know, I must say this, that's, it's a, but it's a fascinating space and an exciting journey for us so far.

Do you have any final thoughts or advice you give other leaders or entrepreneurs who are on a similar journey?

This is the best time to be an entrepreneur because you have everything, you know, from, from AI to, you know, the globally what's happening in in the technology space. So I think, you know, and digital asset space is growing. There's a lot to be done, a lot of exciting, you know, features to be added in, you know, the digital asset space. So I must say, this is, this is one of the best times to be an entrepreneur.

Thank you, Sanjeev. Thank you for sharing your story and insights with us today, especially how you're navigating all this change, especially with the blockchain and tokenization. I think that's fascinating. And this has been a fantastic conversation. To learn more about Zonex, visit zonex.com. I got that correct, right? And that wraps up today's episode of the Achieve Podcast. And big thank you to our sponsors, Achieve Fractional, which provides fractional leadership for growing businesses, as well as Achieve Bootcamps, where entrepreneurs learn hands-on how to build their own marketing systems, automations, and tools. If you enjoyed today's conversation, follow the show and share it with another business owner who'd find value. Thank you for listening, and we'll see you on the next episode of the Achieve Podcast.