Pitch Competition Natalie Karayaneva Propy | Blockchain: Out of the Labs

I'm especially proud of this last bit. This is my brainchild, baby, contribution to this event, so let's hope it goes well. Yeah, a little bit about me. My name is Brett Noyce, founder of Fund8 Ventures, early-stage fintech incubator located here in the Bay, looking to get some exciting fintech and especially blockchain companies coming through our next cohort here coming up in the fall. Yeah, we'll see some great presentations today. Other things you probably don't know about me. My nickname is— I go by outside of this room— Chardonnay Brett. So the companies that are presenting today are going to get— the top 3, they don't know this yet, but they're going to get 3 bottles of Chardonnay from my personal collection. And when I say personal collection, I mean things that I've personally collected recently since I have a just-in-time inventory on that. So anyways, if that doesn't tell you enough about me. With that said, I'm going to hand over the mic to our judges. We have an amazing panel, and I don't want to screw up the introductions. First of all, we have a real-life shark from South Africa, Shark Tank Vinnie. Could you just give us a little introduction of yourself?

Okay, that was a surprise. Hi everyone, I'm Vinnie. I do Shark Tank in South Africa and I'm into Bitcoin and crypto. There you go.

Tell us more about your company.

Okay, fine. Let's let the other guys, not us. Yeah, I'm doing decentralized identity using blockchain, so the idea is you could Store all your personal information on your phone, not on our servers, anywhere else, and they'll authenticate who you are, where you are, sometimes do KYC already.

Excellent. Nice to meet you guys. I'm a late-breaking addition, so I'm not on the list up there, but my name is John Calvo. I'm an investor with Coast to Coast Ventures. We're a seed and Series A fund in Palo Alto. So really looking forward to getting pitches today.

Will Bunker with GrowthX. We invest early stage focusing on the sales problem. Originally founded what became Match.com, and now I'm on the other side of the table.

Tim Draper, Draper Associates. I think you guys saw me this morning, most of you, and we're in the venture capital business, but we also have sort of driven this whole ecosystem. Thank you, thank you, Tim.

With that said, we're going to jump into our first presenting company. The name of the company is Propy, led by Natalie. And one second here. The format is going to be a 4-minute pitch followed by 4 minutes of Q&A from the judges. As far as the audience, we won't be doing any Q&A from the audience, but just sync up with the companies afterwards. I'm sure they'd love to, love to answer all your questions.

Thank you. My name is Natalia Koroyaneva, and I'm the founder of Propy, the company that simplifies the remote real estate sale. I am a serial entrepreneur currently living in Menlo Park, before in Russia, Bulgaria, Dubai, and Oxford. My 12 years of experience as a real estate developer gave me an opportunity to see the pain of the foreign real estate buyers. I've transacted more than 1,000 real estate purchases. John Wong and Andrei Samovsky and other team members have the expertise in cross-border disciplines in real estate, finance, and blockchain. Do you know that one-third of real estate trade— trading is cross-border today? In real estate. In the U.S. last year, Chinese alone invested $35 billion in real estate. Imagine you as a foreign investor would want to buy property in London or Paris. Where would you find a property? And imagine the headache of the purchase abroad. Today in the U.S., there are many cases of fraud in each step of the transaction in real estate. Propy is the unified property store that aggregates listings in global cities. It is— we provide a solution for deposit payment and paperwork via smart contract, and we culminate the purchase process Ownership transfer on blockchain ledger. This is the image of how risky is the process today. With Propy, the seller and the buyer have one point of communication, payment, and paperwork. The blockchain ledger serves as a secure backup ledger database for ownership transfers while we still get the final approval from the land registry on behalf of the client. We do the deposit payment, transaction payment, and we have developed the blockchain ownership ledger. The market size for cross-border transactions is $340 billion. We are acquiring our users from China and Middle East, and currently we cover the residential markets in these several cities in the US. We have developed a mobile application and a desktop version which we marketed to foreign homebuyers. After we have validated the interest with thousands of foreign homebuyers, We have developed the prototype for transacting tool that is illustrated here on the right side, and it consists of a smart contract for the purchase process and culminates with issuance of electronic title deed. Our vision is title deed in the future to become the primary source of evidence. Before that, this title deed together with a package of the documents we have collected serve as evidence for arbitrage court. This is our traction till today. The competition is very fragmented and none of them stepped into the transaction so far. We deliver benefits for buyers, brokers, and governments. We charge brokerages 0.2% from each transaction, which makes $2,000 from each $1 million home sale.

Thank you, Natalie.

Thank you.

So Natalie, these are Only for people from other countries buying real estate in countries they don't live.

Currently, we are focusing on Chinese buyers from the Zhu, Baidu, and Sina. We have partnerships with them buying properties in the U.S., but our model is suitable for Americans buying properties in Europe, for example. But we focus for now on one single channel.

But Chinese buying property here, they don't run into a lot of fraud because we have title insurance.

Yeah, unfortunately they do. There are many cases with escrow agents and with brokers. Brokers, uh, with fraud cases usually take the title deed on their behalf because they make the fraud in the purchase agreements. And then the escrow agents have the cases where the deposit payments are being stolen.

How big is that market?

For example, San Francisco— Like the fraud part of real estate? Yeah. Like escrow agents complain that they have the fraud cases each month for each office, at least 1 or 2 cases. Usually they succeed to discover it. But in San Francisco County, the recording office complained about 50 cases last year. And if we imagine that every house is $1 million cost, then it's like $50 million only for one city.

So how do you create the trust that's required for them to feel like you're going to do the job?

The trust is being supported by the technology blockchain. So currently we have negotiations with the recording offices, with escrow account offices, That the trust in blockchain technology. Once we show them that we hash each step of the transaction on blockchain, they have the evidence of the entire transaction. This is why they they trust us. And once we as the final step of the transaction provide the title deed from the local authority, clients to trust us. We don't explain to our customer what is customers what is blockchain. They just know that their money got into the account of the seller and they received the proper title deed.

Who pays who and who pays you and how much do you charge?

Brokers do pay us 0.2% from each commission, from each transaction.

And is it— so you're signing up brokers or are you signing up the end user?

Brokers.

Got it. Are you using public or private blockchains?

Public for now.

Which ones?

Ethereum.

Any other questions from our judges?

Yeah, why do you care about this? Are you the CEO?

I am the CEO. I've been a real estate developer for 12 years. I've been constructing multi-use residential developments in Bulgaria, and I have attracted countries as Russia, Latvia, and Great Britain to Bulgaria. I saw the pain of those investors willing to buy properties overseas, and we have been writing title deeds in-house. I had a team of lawyers, and we saw many problems across the payment title divisions. This is why I do care about it. I've been constructing many properties before that, but I'm a software engineer. So a couple of years ago, I thought that I wanted to create a global product. So I moved here and decided to do it.

So are you raising money?

Yeah, we do raise right now $1.5 million to accelerate the project.

How much has gone in so far?

Sorry?

How much has gone in so far?

We have commitments. Like for $1 million.

But no money's gone into the business yet?

Uh, we have raised the angel round before that, $300,000.

And, uh, is this up and running?

Yes, yes, yeah. Uh, you can download the mobile application, copy.

Thank you, Natalie.

Thank you, judges.

Thank you.