Let's give maybe one or two more minutes for people to trickle in and then let's get going.
Hello, Angelo. Just checking the sound. Can you hear me?
All right. I think we can get started. Hello, everyone, again. My name is Angelo, and I am from the Cello Foundation. I'm part of Ecosystem Growth and Innovation.
And I'd like to welcome everyone to this Twitter space today that I'm sharing with Gabriela, a dear friend from Ethic Hub.
So today we wanted to chat about SOCAP 2023, the Impact Capital Conference that happened here in San Francisco just a couple of weeks ago.
And I think this is a good opportunity to reflect on Impact Capital investments in the impact space in general and its intersection with Web3 today.
So this is a short chat, and I'm very privileged. We're very privileged to be joined by Gabriela.
I will turn the floor to her now so that she could introduce herself and Ethic Hub.
Hello, Angelo. Thank you very much. As always, I'm very happy to be connected with the Cello community, which Ethic Hub feels like family because of the values so aligned.
I'm Gabriela Chang, co-founder of Ethic Hub. Ethic Hub, it's an enabler for anyone in the world to become an impact investor, investing into the projects of small agricultural communities that are unbanked, that are excluded from the financial system because they are too small.
And yet, if you put them together, they produce one-third of the world's food.
We're talking about this connection of three quarters of the world not knowing the harsh reality of the other quarter.
So by means of blockchain, we are connecting these two parts of the world, building an arbitrage that is dividing the difference of interest rates to benefit both parties, creating share value generation.
And also we provide collateral for the loans of these farmers.
We've been working for five years now. We are deployed on Cello blockchain.
So we are very happy to count on Cello's stablecoin as a means of transference for what we are building.
And I'm very happy to be here to share my experience in SockUp recently.
Yeah, thanks, Gabriela. And of course, I myself personally am a fan of Ethic Hub.
I feel that, or I believe that, you know, like as a company, as an organization, Ethic Hub is the perfect demonstration of the type of builders that we want to support in the Cello ecosystem.
Those that, you know, expand financial opportunity to those that have been traditionally marginalized.
Yeah, so let's start talking. I wanted to ask a series of questions about your experience at SockUp.
I myself was able to attend, but have been part of like, I would say, lobby conference, as well as like attending a few happy hours where other attendees were there.
And it's very interesting. And maybe let's let's begin first, like for the benefit of our listeners.
Would you like to share what SockUp is for those who are not familiar?
And why did Ethic Hub, why did you guys decide to attend?
Yes, the story started five years ago when we started attending one of the most important impact space events.
It's the second largest in Latin America, and it's in Yucatan in Merida.
It's the Impact Investing Forum for Latin America. It's called the FLEE.
And there we learned that the first one was SockUp.
That means social capital.
It's the biggest, the main gathering in the world where impact funds gather and change makers gather to see how to make business with purpose,
how to invest and to solve the biggest problems that there are.
So the biggest development agencies of the world are there.
It's amazing. It's a very inspiring environment, a very inspiring community.
And it is the first time that we attend because we were invited to host a panel to talk about blended finance and smart contracts.
So for us, it was so thrilling to be there in the mecca of impact investing, talking about WebTree and impact.
It's a change maker in this time that we used to think it was an oxymoron to talk about crypto and impact until recently.
Well, not recently, until we met Celo and we felt, as I said, as family and finding our place in this ecosystem that is so complicated.
And SockUp is the connection with the traditional world.
I always insist there is more capital in the development agencies aimed to solve the problems of the world than the whole amount of money in the WebTree industry right now.
So it's very important to tap on it and to connect it.
So it was an amazing opportunity to join these big players and let them know about what we are building on this side of the technology.
Yeah, I had an experience as well, attending a similar conference, GII and the Global Impact Investing Network.
And indeed, this is a community that's really nice to belong to, specifically because these are capital allocators, capital providers,
whose main motivation, if not like, you know, like, complementary motivation is really how to drive impact, how to, you know, empower, you know, businesses and entrepreneurs to create impact, to create, like, solutions that will address tricky problems.
And thank you for representing WebTree there, Gabriela.
And thank you also for representing the Celo community.
But I want to talk about your panel because I think it's very interesting.
You know, you said, like, it's a panel about blended finance.
Would you like to share to our audience what was it about, who were you with in the panel, and, like, just some, like, key insights that surfaced in the conversation?
For certain, I will describe what's blended finance because it's a term very well known within the development finances.
Blended finance is concessional capital that third parties that an investor, a concessional,
an investor is willing to put, to absorb first losses and attract more investing.
That is, other investors come because there is someone that accepted to take the first losses if they were.
So what we built in Ethic Hub with our crowd collateral that runs on Celo is that third parties can stake collateral on behalf of the loans of the farmers,
which don't have a valid collateral because they are too small and their lands are of no commercial interest.
So that's the description of the subject we were talking about.
And, but it was focused on how we use smart contracts, how we use Web3 to implement a liquid collateral, a liquid blended finance.
And I was thrilled to be sharing the space with one of our investors, which is Cerulean Ventures.
And on the other side, it was the representative of Hafer Labs or partners in, now for financing and reaching the farmers we're working with, the communities.
On the side of Cerulean, they say there are blue ocean and green forests.
It's a beautiful description of this impact investment fund.
That is a Web3 impact fund.
And on the other side, Hafer is the biggest and maybe the oldest NGO working on agriculture.
They work with thousands of farmers in hundreds of countries.
So they are like the most powerful partner we can count on because they come from the traditional world and they understood what we were doing with the technology.
So I think this is a very powerful alliance.
We just launched a pilot with almost half a million dollars to reach their communities through our platform.
So this conversation was very instructive.
And I was like, I was in doubt that it was going to be appealing to such a conservative audience because it was so technical and because it was the first talk after lunch.
And I was very happy because it was full.
People was very interested into what we were doing.
And adding this credibility by a traditional entity as Hafer there made the highlight of the day.
I was very, very happy about this.
Yeah, that's very interesting, Gabriella, because in my own experience, when I attended an impact capital conference at JIN, that was actually even with Rene, our co-founder.
I share your insight there that most people in the impact capital space are very conservative.
And so I think you were a trailblazer here, just sustaining these conversations, these relationships with partners, for them to start believing and also to trust that it's actually possible to drive impact via Web3.
But maybe this is something that our audience will be very interested about.
So your partnership with Cerulean as well as Hafer, Hafer Labs, as you mentioned, these are investors and foundations that wouldn't pick up Web3 right away.
I think I'm curious, what has been the approach of Ethic Hub so far?
How do you sustain these relationships?
How do you come in front of these partners to kind of convince them to support you?
Well, records, work, proof, facts, it was a long way.
Building credibility, it's something that takes time.
We've been in the space since 2017.
So I think we earned this trust by hand, almost building small communities one by one, attending all these events for five years and developing this trust relationship.
No, you need time to develop those.
It's not something that comes out of a magic wand.
You need to meet the people to let them see you in different events and building trust, building credibility.
And especially what I love most about one of the features I love most about Web3 is the saying that don't trust, verify.
So relaying on the technology, on the ledger, we could prove the money we said we placed, it was placed.
The people that is acting, participating was there.
So it was like building up on top of layers of layers of trust.
And I said, this is an entry barrier because it's not easy to gain the confidence of these entities, but it's worth it.
And I think we are being, we are opening, how I said in English, crack open the nut.
And I think this will be like arrowhead to let other projects to come behind us by this route that we are opening because it's so important to connect Web2 with Web3.
We don't need to start all over from scratch.
It's very important to create these synergies.
And I think Ethic Hub is doing an amazing job on opening these paths, these ways to connect both worlds.
And now because of this type of events, when we are there in the first line or like in the fleet, that we were in the main stage talking about blockchain and blended finance and all this stuff.
We are making it aware for these traditional communities of investors that there's a whole new world being birthed and that it's worth to take a look at it and to give an opportunity to listen to other players also, to add credibility to the whole Web3 ecosystem.
Because in such an early stage, we all know we have to deal with the bad press of the little things that goes wrong and it all splashes all around.
But it's about community, about building trust as a whole, as a collective, I think.
And in that regard, Celo is also doing an amazing job being everywhere talking about Web3 until people get familiar with it.
Yeah, thank you for that, Gabriela.
And I feel I agree with you.
Like you're opening the doors wide open for other builders in the Celo ecosystem as well as like those, anyone, like, you know,
entrepreneurs in the Web3 space who are focused on impact to establish these relationships with impact capital.
And, like, I remember last year, the statistics was the estimate of GIN was that there's 1.1 billion or trillion, actually, of assets under management by impact capital providers and allocators.
And, you know, just like thinking about even 1% or 2% of that being allocated in Web3 can be very powerful, you know, like to support like the entrepreneurs, the builders, the talent that are really developing solutions to solve the world's most urgent problems.
And maybe that's my next question to you in the crypto space.
I mean, there's an uptick recently, but the bear market has been a little bit prolonged.
And, you know, the fundraising environment is still difficult.
I wanted to, like, ask you how is it so far?
How are you guys approaching impact capital, these capital allocators?
How are you, you know, managing that conversation?
And, again, like, I think this is interesting to a lot of, like, builders out there looking for support to continue or, like, to even scale their product.
Would you like to share some of your thoughts here?
We are facing a very harsh environment.
Crypto investment fall by 90%.
It's a very difficult scenario.
That's why it's so important to have purpose into your solution, into your project.
Because, in our case, being in the intersection of crypto and impact has been the main challenge.
Because it's like talking to carnivores and vegans.
Sometimes it's one community doesn't trust the other.
But it's also where the great opportunity remains.
And because of this, during the crypto winters, we said we migrated to the impact space.
And we started from zero there in 2018 for the first crypto winter.
And we were able to build a community.
So, I insist, there is so much need of connection.
There is so much need of 10 bridges between this impact investment capital and the Web3 technology for impact community.
Because this is a way of resilience also.
Because our model is based on real-world activity.
Because it is focused on the productivity of the farmers on the ground, on the field.
You know, they were laughing about, we offer 8% annual return to the impact investors, to the lenders.
And some of the crypto guys were laughing at this rate.
And we say, wait until the crypto winter comes.
Our model is resilient, precisely because it is based on both worlds, not only one.
So, when crypto winter comes, we still have the impact investors face.
And when the crypto world goes up again, we will go up with it, leveraging, obviously, on the bull round when it is.
And to keep a combined model that connects the real world, where the productivity doesn't come from financial derivatives.
When the productivity, the yield doesn't come from other crypto assets.
But it comes from the people working in the real world.
And in that way, I would, what we did, it's bootstrapping, tightening our belts in order to reach break-even.
And then we don't have any more of the pressure of consuming capital to keep alive.
We built a model that is working, that is sustainable, even in a small scale.
And that will allow us to scale globally as we aim since the beginning, step by step.
But it's very, very important to secure the basic expenses of your project in order to keep it alive through the harsh times.
Because it's not only crypto winters.
We have black swan events.
We have COVID, and then we have the war of Ukraine, and now the war in Israel and Palestina.
It's a very challenging environment.
And it will be like that.
We don't, as entrepreneurs, we cannot wait for the time when everything is flat and even and easy.
That won't be like that anymore.
So we need to build the solutions to bring that stability back to the world.
That's precisely part of the problem.
So we need to build resilience and to add purpose to what we are building.
I really like what you're saying, Gabriela.
I think you guys are firing from both cylinders.
And I feel that this is also the distinguishing factor in most of the projects that are building on Celo.
We do explore and maximize and push the frontier of what's possible in Web3 without forgetting, of course, the other important piece, which is purpose and impact.
And I very much agree with you, especially in these times, it's like impact and purpose that will drive sustainability.
And it will also help us establish a base to continue or to survive these cycles.
And I feel like when you approach like sources of funds, this is like the evidence that they look at.
And this is where you also base, you know, the trust and reputation that's useful.
So thank you for sharing that.
I want to talk about SOCAP again from the conference.
Any interesting conversation or person that you met that's also worth highlighting?
I'm still doing the follow-up on the conversations we had.
A lot of people approached us after the conference, after the panel.
And then because it was a three-day event and we also attended the Celo event, more connections came out of there.
I'm still tracking the conversations.
It's amazing because it's a huge community, but it's like the same players, the main players that we met five years already in FLE, in Yucatan.
So it's like very nice to meet old friends and to make good friends, new friends there and to exchange what is happening.
Like, for example, from our side, some of them were not aware of the advance of the regulation regarding the biodiversity tracking of the impact on the supply chains.
That has to be reported within seven years, but it was signed two years ago.
So it's like an exchange of information of the people that is working in the most leading and most innovative things and connect all that information to create synergies.
So I was connecting the people I know from the Web3 space, working on biodiversity, for example, records and that, to the people that is looking for similar solutions.
It's like you don't need to build them.
And especially getting back in touch with all the people we met last year and building these trust relations.
I don't know if I would highlight one particular, because there were so many, you know, the spirit of collaboration that there is.
I think that's what I would highlight.
The people is open to connect, is willing, is looking for meaningful connections, and that makes it very easy, like, simpler to join a group of people talking and realize that you can add information to them and get valuable information from them and get updates for everyone.
This amazing connectivity, synergic connectivity, I would say, is the highlight that I would say from this event.
I would recommend it to anyone willing to attend something that is related to impact.
We also had the privilege of, like, co-hosting a happy hour with you together with other partners, such as Action Venture Lab.
As well as, like, other builders, you know, GlowDollar, Cred Protocol, Valora, and Impact Market.
And we did draw interesting people from, you know, other impact capital investors, other builders.
And I agree with you again here.
I think the conversation has changed, no?
Like, amidst the bad press that crypto and Web3 got from last year, there's more willingness, there's more curiosity from other players, other stakeholders to find out what we're doing.
And the fact that builders like you at Ethic Hub continue to stay and build and, like, really just focus on delivering impact, I think, you know, creates more content, as well as, like, points of conversation to really convince them that this is worth checking out and worth supporting.
But, like, we've been talking about impact for the past, like, 20 or so minutes.
I wanted to ask you here as well, how has the industry been thinking about impact or, like, any interesting tidbits, new developments or insights from the conference that you can share?
Well, the conference is totally focused on impact, no?
The name is Social Capital.
Actually, they are not that much focused on technology.
There are some funds that invest into technology, health tech and agrotech and all this stuff.
But I would wonder that, I would ask that question to our peers in the Web3 space.
How are you considering impact within your models?
Because, as I say, this is the maker of the impact investing, San Francisco and this SOCAP event.
So, evidently, this is, like, the first point into everything they are doing.
There were models to make sure impact investment, impact, to make sure impact indicators and all things to make, you know, to avoid the greenwashing and to prove, to separate the good work from just the smoke joke, sorry, the smoke work.
So, I would revert these questions to our Web3 audience.
How are you dealing with impact within your projects?
And I would love to think that we arrive to that point of adoption, that everything is going to be easier.
But I don't, I'm not that naive.
I think we still need to build.
We still need to prove ourselves.
We need to have this amazing success for the normal people to look, to decide and start more actively investing because this is still difficult.
I want to send a message of hope and good, good expectations of things because if we keep building, we're going to make it.
But, of course, we would wish to make it sooner than later because it's very, very exhausting for the teams.
I know the people who is listening that has been working on these last years.
It's very harsh, but you have to keep the passion to do what you believe in because time will come, but I don't think it will come in three months, for example.
No, it's so we need to keep building resilience, as I said at the beginning, and thinking that impact is resilience because it's not a trend.
It's not a fashion, it's the next trend.
Sustainability and regeneration are what the world is demanding.
So it's a huge business opportunity to solve problems in those areas, I think.
And I think this is also where we draw strength from the community, you know, like from where I sit at CELO Foundation.
I feel that, you know, maintaining these connections with builders who are focused on impact, as well as like, you know, providing avenues for new stakeholders to have these conversations and dialogue about like the intersection of Web3 and impact capital or impact in general is something that we continue to put resources on and like put efforts.
Because I think it's really, you know, it will pay the dividends in the long run.
And it's worth it, given also like the power and the potential of the technology to really make a dent.
Yeah, we're close to time.
But maybe like as a last question, I wanted to ask you what is next for Ethic Hub?
What's in store for you towards the end of 2023 and the beginning of 2024?
We are super happy to say that we are bound to launch by the end of the year.
We are working on a technical sprint to combine our two platforms, the lending and the collateral one, to make it more user-friendly.
So any one of you that is listening that is highly educated on Web3, or if you are not, you will be able to use it also.
There's been a huge effort from all the team to improve this usability and to merge it into one.
So we call it refactoring.
And we are very excited about how it will reflect in the adoption of the users in our platform.
We are also very happy that we just deployed almost half of the funds that Hafer invested in us.
So this first pilot has been very successful, and we are going to launch a second one with them.
And so getting more countries and getting more users.
And especially, well, and there's also a surprise regarding the Ethics Odyssey.
So stay tuned because we are going to release more information about that very soon.
Follow us in our Telegram channel that is very active, most the Spanish one, but you can use a translator or get into the English one also.
And just join us and see what is being cooked in these days.
Yeah, and with that, thank you so much, Gabriela.
This has been a very rich conversation.
As Gabriela mentioned, you can follow them on their social media as well as their Telegram groups.
And yeah, again, appreciate your ideas as well as your insights today.
And thank you to our audience for joining us.
And see you again next time.
Thank you, Angelo, for inviting me.