In the exclusive feature, Dinesh Patel, CEO, and the Diamante team provided insights into the company’s unique vision, mission, and approach, and why distributed ledger technology (DLT) is so important for the diamond and luxury goods sectors.
PayCircle’s Proof of Concept saw the participation of bankers and ten heavyweight corporates worldwide, successfully conducting multiple B2B transactions with lightning speed. PayCircle offers a suite of blockchain-based payment solutions designed to make global transactions faster, cheaper, traceable, and more secure.
Diamante Blockchain wins big at the DCB Bank Innovation Carnival, held during the International Banking Expo IBEX INDIA 2020. Diamante Blockchain claimed the winner’s position at Innovation Carnival by showcasing its revolutionary blockchain ecosystem in front of the jury members.
Diamante Consortium, the global diamond consortium powered by blockchain technology is ready to launch with our native asset, DIAM, to bring trade-in diamonds one step closer to encrypted digitization with an aim to mitigate some of the challenges afflicting the diamond industry.
Diamante’s newest payment solution, PayCircle, aims to address the friction associated with cross-border wire transfers, the traditional payment method upon which industry players rely. The B2B and B2C payments tools wield blockchain to facilitate cross-border transactions in real-time while reducing transaction costs and addressing security and fraud threats.
Diamante Blockchain provides a B2B payments network for cross-border diamond transactions that seek to address cost challenges and reduce charges between chain participants.
Diamante Blockchain’s (Diamante’s) mission is to leverage blockchain technology to create a dedicated, universal ecosystem ensuring full security and establishing concrete trust in trade, payments, financing, and controls.
Dinesh Patel and Chirag Jetani both come from families who lived and breathed gems and jewelry business for generations.
They’ve experienced firsthand how antiquated technology, manual processes, and a lack of information make global trade more challenging and costly. It’s currently to identify that international businesses must adopt technological innovations to survive, thrive, and grow in the long run.
Blockchain and DLT are pioneering new technologies that offer global trade solutions from initial contact right through to post-purchase experience
Problem 1: Existing Payment Mechanisms are Inefficient
Increasing costs of doing business and depressing consumption growth, which has not been strong enough to absorb excess production, are forcing smaller players throughout the supply chain out of the market. International payment solutions offered by banks and other payment service providers are delayed and expensive in terms of operational and transaction costs. The small and medium scale companies are charged interest either by the counter companies or private financial institutions that only confirm the payment within 48-72 hours. For the big corporates, it’s the same case as the interest is levied by traditional financial institutions like banks.
Solution 1: Corporate Payments Platform (“PayCircle”)
PayCircle is a decentralized payment application for individuals and businesses. PayCircle allows individuals & businesses to Custody, Send & Receive multi-currency (USD/AUD/CAD/EUR/JPY) Fiat and Digital assets (BTC, ETH, ERC20) based tokens and stable coins like USDT) 24*7 and 365 days. Utilizing blockchain as a technological infrastructure PayCircle allows relatively speedy and low-cost transaction settlements. PayCircle ensures enhanced security of the financial contracts and facilitates contract automation utilizing blockchain immutability. PayCircle forges a bond of reliability through advanced visibility of the transactions while guaranteeing zero payment failure. PayCircle users remain in absolute control of their assets without any interference from any intermediary through complete possession of their private keys within the PayCircle ecosystem.
Problem 2: Lack of Access to Financing
According to the World Federation of Diamond Bourses (WFDB), financing by banks to the global diamond industry shrank by US$3 billion from 2017 to 2018 as banks started to demand greater transparency, higher collateral security, and extensive documentation. Lack of capital leads to reduced cash flow, which is a major problem facing the diamond industry, particularly for diamond traders who must have the capability to hold a large stock of diamonds. The entire diamond pipeline is being compelled to adjust their mode of business and operations as billions of dollars are removed from the industry.
Solution 2: Corporate Finance Platform (“CreditCircle”)
CreditCircle is a DeFi finance product on Diamante Net. It’s a decentralized finance application where individuals and businesses can opt for receiving loans and credit at a relatively low-interest rate compared to traditional financing.
Users can escrow their stocks, bonds, luxury commodities, and digital assets to avail of financing. CreditCircle enables peer-to-peer (p2p) lending, where individuals and financing institutions from around the world can get access to a large number of customers globally.
One of the biggest problems threatening the diamond industry is the lack of access to financing, which is forcing several players, especially smaller producers, manufacturers, and traders, to adjust their mode of business and operations in order to compete. To solve this, the Diamante platform will offer its members the opportunity to obtain a line credit once approved by the consortium.
The Diamante consortium platform will allow members to access credit in a number of ways. In the first instance, consortium members will be able to apply for a credit facility directly from Diamante. In addition to Diamante providing credit to consortium members, traditional lenders and credit providers such as banks will be able to access the Diamante platform by paying a platform fee, which will, in turn, allow them to access data and connect with potential borrowers directly.
Diamante would have two financing options, one being a peer-to-peer (p2p) lending platform, and the other is asset-backed financing.
Members’ credit ratings will be mapped using high-end technical and financial algorithms that will assist the consortium in approving the line of credit to its members. Before issuing the line of credit to the specific consortium member, diamonds would be used as a means of collateral, which would be secured from the individuals seeking the credit.
Diamante has a concept of asset-backed financing where diamonds would be used as an asset that would act as collateral. For example, if a company is in a cash crunch and requires a credit of $1 million, the company would place $2 million worth of diamonds on to a 3rd party safe deposit vault, which would be valued by the Diamante appraisal team. All these transactions would be recorded via smart contracts on to the Diamantes network, i.e., Diamante Net.
Market opportunity Diamante:
Diamante has identified the diamond industry as the ripest candidate for disruption and as such, and building on the team’s knowledge and histories, decide to target this area first before expanding to other luxury goods. In addition, the founders of Diamante hail from the diamond industry, and therefore the initial application of the already proven technology would be implemented in the diamond industry.
Once successfully implemented in the diamond industry, Diamante will expand its operations into multiple industries such as precious metals, commodities, pharmaceuticals, textiles, and other luxury goods with a huge potential to scale its business and revenue streams.
Market opportunity PayCircle:
Diamond industry moves funds globally in various corridors in a total of $150-180 billion annually.
Diamante is currently working alongside banks to integrate its already proven payments technology. Diamante is currently integrating its workflow system, document transfer system and payment system with the banking and financial institutions. Once successfully implemented within the diamond industry, Diamante would expand its verticals in multiple industries.
Market opportunity CreditCircle:
More than 90% of Diamonds are cut and polished in India. India being not so lucrative market to get cheaper financing makes the cost of capital higher. Also, private financing within the industry comes at a higher expense. Diamante, with its global platform, would give access to all its consortium members a cheaper financing solution that would in turn help cover the majority of the $80-100 billion industry.
Diamante is headquartered in the United States, with a global operations team in key market centers, including New York (business development), Mumbai (industry relationships), and Kolkata (technology).
The total addressable market for the PayCircle is approximately $150-180 billion as a short-term goal before aligning our vision to serve the global remittance market worth approx. $ 2 trillion.
Team Diamante has developed a fintech-driven payment solution (www.PayCircle.io) that applies to multiple industries. We have identified the luxury goods and service industry as the ripest for disruption, considering the team’s expertise, knowledge, and history with the industry. We will therefore target this area first before expanding into other verticals. In the next 5 years, we expect to capture 25% of overall diamond corporate payments globally.
We successfully conducted POC of PayCircle our Defi payments application with Diamond, Textile, Oil, and Pharmaceutical giants. Diamante has collaborated with one of the leading financial service providers and is currently integrating the payment platform’s technology stakes. The first payment on the platform occurs in the 1st quarter of 2021, before going live in the production phase. The Native Digital Asset of Diamante ‘DIAM’ is a utility-based token which has received a no-action letter from Swiss financial market authority FINMA. Negotiating terms of the integration with multiple institutions have taken time and coordination. This delay is our biggest challenge.
Yes, Diamante owns 100% of this valuable intellectual property asset. Diamante has developed a proprietary DLT network called Diamante Net, which hosts PayCircle, among other things.
As the Diamond industry is very closed-looped and majorly operated by family, it makes it easier to penetrate and achieve high growth. The management team’s experience, relationships and connections helped Diamante Blockchain achieve traction quickly: for example, approximately 400 companies signed up for the Diamante Consortium immediately upon launch – these Consortium members represent approximately 8-10 Billion USD in total annual revenue.
Complying with regulations such as KYC, and Kimberly Certified Norms ensures that the trade participants are trustworthy, and the diamonds they trade in are ethically sourced. Diamante also keeps to AML, FINCEN, and FINRA regulations to prevent money laundering and maintain fairness in trade practices.
Diamante follows the USA Patriot Act is to identify, disrupt, and prevent terrorist acts and money laundering activities by encouraging further cooperation among law enforcement, regulators, and financial institutions to share information. The Diamante consortium will be fully compliant with the Act.
Diamante has received a no-action letter from FINMA, swiss financial market supervisory authority stating DIAM (Native Digital Asset on Diamante Net) as a utility token exempted from security.
To ensure that Diamante is fully compliant with these and other relevant regulations, the company will develop and operationalize the compliance program according to the following phases:
The Diamante team of executives and advisors is made up of experts with significant regulatory, technical, strategic and operational experience in both the diamond and blockchain industries.
DIAM is the native digital asset of the Diamante network. It’s baseline functionality, which will develop over time, is to provide the holder with the ability to become a member of the Diamante Consortium. Diamante has received a no-action letter from FINMA, swiss financial market supervisory authority stating DIAM (Native Digital Asset on Diamante Net) as a utility token exempted from security.
DIAM is not currently being traded on secondary markets. Diamante Blockchain’s current strategic plan is to have the DIAM be available in the secondary market. In a first step towards providing liquidity to the market, Diamante will focus on listing DIAM on multiple regulated exchanges globally. Within the next five years, Diamante aims to list DIAM on a total of 15 regulated global exchanges. In addition, Diamante will allocate funds towards developing its own exchange platform on which DIAMs can be publicly traded.
The Native Digital Asset of Diamante ‘DIAM’ is a utility-based token which has received a no-action letter from FINMA. According to the FINMA guidelines, payment tokens are tokens that are actually or intentionally accepted by the organizer as a means of payment for the purchase of goods or services and/or for the transfer of money and values. The purpose of the means of payment must be the main function of the tokens and not merely an ancillary service to the usage function (see Art. 2 para. 2 letter a no. 3 Money Laundering Ordinance [MLO; SR 955.01], FINMA-Circ. 2011/1 “Financial Intermediation under the AML” margin no. 13 ff.).
According to your specifications, the DIAM Token serves as a means of payment within the Diamond Net protocol and therefore qualifies as a payment token. The payment means function of the DIAM Token is the main focus. There are no apparent reasons why the issue of DIAM Tokens would be accessory to a usage function or other main activity. The issuance of payment tokens, which can be technically transferred on a blockchain infrastructure, represents an issuance of means of payment that is subject to subordination, from a money laundering perspective.
In this case, the DIAM tokens are already transferable on the Diamante Net protocol from the ICO phase, which is why their issuance is subject to the MLA. Diamante CH must therefore join a recognized self-regulating organization according to Art. 24 AML or call/ involve a financial intermediary authorized in Switzerland under the MLA for the receipt of the funds and the fulfilment of the due diligence obligations.
Since the DIAM Token does not give the impression of a debt right with capital market character and the Diamante Net protocol is functional at the time of token issuance, a qualification as investment token is not possible. This assessment is based on the understanding that the functions announced on the website www.diamanteblockchain.com and based on the protocol are also functional at the time of token issuance.
The DIAM Token does not entitle the purchaser to a refund from Diamante CH as issuer of the token. The issuance of the token does not fall under the definition of a deposit and therefore there is no authorization requirement according to the Banking Act (BankG; SR 952.0). Since the funds received within the framework of the ICO are not intended to be managed by third parties, the applicability of the Collective Investment Schemes Act (CISA; SR 951.31) is also not considered.
Funds raised will be allocated in the following way:
In order to arrive at a valuation for Diamante Blockchain, a Discounted Cash Flow (“DCF”) analysis, as well as a forward revenue, multiple analyses have been conducted.
The forward revenue multiple approach gives a range of $12,500,000 – $19,000,000, with a midpoint of approximately $15,700,000, which supports the company’s current valuation of $12,500,000.
The DCF approach (outlined below), which is based on projected earnings of both the corporate payments platform and the lending platform expected to be launched later this year, yields a valuation of $30,900,000. Given the anticipated growth in the next twelve months, Diamante expects that additional capital in the future will be raised at a valuation within a reasonable range of this value.
This anticipated increase in value over the next twelve months is likely understated, as it does not take into account additional value generated by the launch and sale of the company’s native digital asset, DIAM. Diamante has already initiated the token-issuing process, which is expected to take 4-6 months, following which the token will be listed and launched on multiple reputable regulated exchanges globally.
Diamante Blockchain is currently seeking to raise approximately $2.3 million in capital by undertaking a private placement of equity ownership interests in Diamante Blockchain LLC (“Diamante Equity Securities”), the top-tier holding company of the Diamante Blockchain corporate group. The Diamante Equity Securities are being offered to (i) U.S. accredited investors under SEC Regulation D and (ii) non-U.S. persons under SEC Regulation S.
In addition, Diamante Blockchain is selling rights to receive certain amounts of DIAM, Diamante Blockchain’s native digital asset (“DIAM Rights”). Investors may purchase Diamante Equity Securities that contain DIAM Rights.
An accredited investor who invested $1 million in cash would receive Diamante Equity Securities equivalent to 8% of the total shares of the Company (reflecting an implied pre-money valuation of $12.5 million).
Diamante is currently valued at $12.5 million.
Yes, Diamante has raised a total of $783,000 in equity capital to date. Out of the total raise, the founder’s contribution was $190,000 and $593,000 was raised at a pre-money valuation of $12.5 million.
The previous raise was done at a total valuation of $12.5 million
Diamante has already signed up more than 400 companies on to the consortium since its soft launch a couple of months back. The total revenue of the companies that have signed up for the consortium is between USD 8-10 Billion.
The Diamante project is majorly backed by investors from the diamond industry.
The desired pre-money valuation of the company is approx. $12.5 million.
The Diamante team remains focused on taking advantage of the growing market opportunity and building a robust business in order to drive maximum returns for investors in the long term. Building a company for the long term, measured by a number of near-term milestones that will track our growth and progress, will give us options in our exit strategy. By focusing on building a company that is an attractive, robust investment target to potential acquirers in the future, we will maximize flexibility and optionality so that, at the right time, we can pursue the exit strategy that achieves the highest returns for investors at the time.
With respect to the Equity Financing, prospective investors should be prepared to hold the Diamante Equity Securities for a period of at least 5 -8 years. In terms of exit, Diamante hopes to be in a position to execute a variety of potential exit strategies, including being acquired through a merger, acquisition or similar transaction, and/or execution of an initial public offering.
Diamante will be an attractive investment target for large competitors in the financial services space (e.g., banks, payment processors, and credit providers). The company will also be a strategic investment for large technology companies with complementary service offerings
(e.g., IBM’s complementary service, TrustChain, which uses blockchain technology to track diamonds through the supply chain). Finally, the company will also be an attractive investment target for large players in the diamond industry (e.g., De Beers Group, which has also launched a diamond supply chain product, Tracr, powered by blockchain technology).
The Diamante Consortium is a first-of-its kind consortium of diamond supply chain participants, facilitated through a secure, decentralized blockchain network. The network will be an open system with an independent governance structure that creates and retains additional value within the industry and represents the interests of all participants.
Any single user or a particular organization will not own or supervise the network, rather, it will be an open system with an independent governance structure that creates and retains additional value within the industry and represents the interests of all participants. The long-term governance structure of the consortium will be established collaboratively through ongoing discussions with industry stakeholders and representatives.