Amit Mahajan, Entrepreneur, Co Founder & CCO at TAsset

Interview with Amit Mahajan, Co Founder & CCO at TAsset

Amit is a professional with 17+ experiences in Banking and Corporates. Prior to TAssets, Amit has held key management positions at RBL bank (last being Senior Vice President) and Yes Bank with wide exposure across asset and liability sides of the bank.

During his stint with RBL bank for 9 years, Amit has been instrumental in setting up Commercial banking business for the bank with the book size of more than INR 50 bn and subsequently also establishing New Age Economy vertical in the bank with focus on transactions across Fintech, Gaming, Logistics, Health Tech, B2B Commerce and Education space. 

Prior to RBL Bank, Amit has worked with organizations like Yes Bank, ICICI Bank, Monnet Ispat. He brings together deep understanding in Relationship Management, Team Management, Credit, Structured debt funding and corporate finance.

Amit is a Chartered Accountant and also holds post graduate degree in finance (MBA) from IMT Ghaziabad. He is also an avid reader and likes to keep abreast with upcoming technologies like Blockchain & DeFi.

Can you provide an overview of TAssets and explain what sets it apart as a leading Asset Tokenization as a Service (ATaaS) platform?

Amit Mahajan: TAssets is a Fintech which is solving for Working Capital Financing needs of the MSMEs and Large Corporates. TAssets has built an invoice tokenization product for which it has been granted patent by India Patent Office.

Founded by experienced founder team, TAssets is backed by Start-up India Fund Scheme, has been recognized as an innovative start-up under MEity (Ministry of Electronics and Information Technology) Samridh scheme. TAssets is also incubated by Amity Innovation Incubator and India Accelerator.

Invoice Tokenization enables various use cases like Deep Tier Financing, ESG Financing, Supply Chain Financing etc.

1. Invoice tokenization: TAssets helps businesses convert their unpaid invoices into cash by tokenizing them.
2. Supply chain financing: TAssets provides financing to businesses in the supply chain ecosystem, including suppliers, manufacturers, distributors, and retailers.
3. Deep Tier Finance: TAssets offers invoice financing to the Tier-2/ Tier 3 vendors of the OEMs predicated on the risk of the OEMs. This helps reduce credit risk of the Banks/ NBFCs and supports inclusive financing at the bottom tier of the pyramid.
4. ESG Financing: TAssets deep tier solution supports Large Corporates through ‘Green    Tokens’ to incentivise their Tier-2/3 suppliers to implement and meet ESG guidelines

Invoice tokenization and its use cases like Deep Tier Financing etc are new concepts which are still in their infancy. Only a handful startups are working on this concept like Nakad and Credable.

TAssets Tokenization solution is a patented solution built Hyper ledger Fabric which is a superior distributed ledger in terms of security and transparency. In addition to this, TAssets core team has a relevant banking and technology experience with cumulative experience in excess of 50+ yrs which gives it an edge in terms of understanding the market.

Kindly brief us about your company, its specialization, and the services that it offers

Amit Mahajan: TAssets is a Fintech which is solving for Working Capital Financing needs of the MSMEs and Large Corporates through its patented solution of Invoice Tokenization built on enterprise Blockchain.

Founders identified this problem statement of lack of financing options for Tier 2/3 vendors   during their Corporate Banking days.

They observed that all the financial institutions were willing to extend credit limits to only Large Corporates or their immediate Tier 1 suppliers.

However, the actual credit need was at the Deep Tier suppliers (Tier 2/3 suppliers) levels who were indirect suppliers (sub vendors) to the Large Corporates.

Deep Tier suppliers found it challenging to realise their cash flow because of following issues:

1. Invoices raised by Tier 2/Tier 3 suppliers were on Tier 1 supplier and not on large corporates. Financial Institutions found it difficult to discount these invoices as their risk of realisation on due date was on Tier 1 Buyer rather than Large Corporate.

• Lack of technology- No mechanism was available wherein payment confirmation of invoices raised on Large Corporates could be tricked down the value chain to Tier-2/3 suppliers which could provide payment comfort to the financial institutions.

To address the above problem statement, TAssets has built its first Patented Deep Tier financing solution using Invoice Tokenization.

Solution has been built on Hyperledger Fabric. Solution enables value chain finance wherein “MSME tokens” are issued on enterprise Blockchain.

These tokens move in a value chain against invoices, enabling Tier2/3 MSMEs in a supply chain avail credit against the rating of the largest member of the supply chain. 

This leads to:  

•  Low-cost finance for MSMEs in supply chain
•  Making sure MSMEs in supply chain are paid on time
•  Reduces supply chain cost
•  Reduces chances of supply chain disruption

TAssets is backed by Amity Innovation Incubation, India Accelerator and Few Angel Investors.

TAssets has recently gone live with its Supply Chain Financing solution and has already built upon early traction in terms of on boarding 5 financial institutions on its platform and providing sanctioned exposure of ~USD 7 mio to customers/ vendors.

What is your biggest USP?

Amit Mahajan: TAssets has built an  invoice tokenization product (patent granted by DIPP) which enables  credit to MSMEs which are Tier2/3 suppliers of Corporates.

Invoice tokenization has its biggest use case in Deep Tier Financing, ESG Financing and has the ability to democratise overall Supply Chain Financing space. Solution has the potential to enable participation from retail investor in Invoice Discounting which was earlier only available to Banks or NBFCs.

What motivated you to co-found TAssets and enter the asset tokenization industry?

Amit Mahajan: Idea of founding TAssets got germinated during the Corporate Banking days of its Founders.

They observed that all the financial institutions were willing to extend banking limits to only Large Corporates or their immediate Tier 1 suppliers.

However, the actual credit need was at the Deep Tier suppliers (Tier 2/3 suppliers) levels who were indirect suppliers (sub vendors) to the Large Corporates.

This need was not getting addressed:

1. Due to lack of comfort on MSME as their balance sheets were not healthy enough to support banking limits on standalone basis.

• Due to lack of technology which could ensure that the comfort of a Corporate could be drawn not just on the Tier 1 vendors raising the invoices but also on invoices raised by Tier 2/3 Vendors.

Having a deep understanding of the market, founders worked upon building the solution which could address the above-mentioned problem statements. Asset Tokenization provided the answer to the problem and hence TAssets came into being.

Asset tokenization is a relatively new concept. How do you educate potential clients about its benefits and potential impact on their business?

Amit Mahajan: Our propriety solution of Deep Tier Discounting using Invoice Tokenization helps MSMEs mitigate their cash flow problems and enables them to avail credit on lower ROI as financial institutions are financing the MSMEs based upon credit worthiness of Anchors.

Our product solves problems at all levels of supply chain ecosystem:

• Deep Tier MSMEs(tier 2 & tier 3 vendors) : Provides them access to credit at lower ROI.
• Anchors/ Tier 1 Vendors: Lower procurement cost, Option of part acceptance of invoice and stickiness of MSMEs.

• Financial Institutions: Low financing risk as comfort derived on creditworthiness of Anchor, Access to large base of MSMEs and Priority Sector Lending book.

Thus while on boarding customers /partners we are educating them with above benefits of invoice tokenization. Further, we have made tokenization a very smooth journey, via plug and play model. Thus enabling tokenization without any operational inconvenience.

Could you explain the process of asset tokenization and how TAssets facilitates it for businesses?

Amit Mahajan: In our 1st model of Invoice Tokenization, Tier 1 Vendor raises an invoice onto it’s Buyer which is generally a Large/ Mid Corporate.

Once the Corporate accepts the invoice on TAssets platform, invoices are recorded on Blockchain ledger. System tokenises these invoices into multiple tokens and stored in tier-1 vendor accounts.

When the Tier 2 vendor raises an invoice onto Tier 1 vendor, Tier 1 vendor accepts the invoice and it has an option to f transfer the existing set of tokens down the value chain to Tier 2 Vendor.

These tokens can further be moved to the Financier/ investor who decides to buy/discount these invoices.

What types of assets can be tokenized using the TAssests platform, and what are the advantages of tokenizing assets?

Amit Mahajan: We have gone live with Tokenization of Invoice as our first use case. India’s appraised supply chain finance market is estimated to be around at INR 18 lakh crore whereas only INR 75,000 crore market as been addressed. Hence, there is huge potential in this asset class to grow.

Another use case which is seeing prominence is use of Tokenization in Deep Tier sustainable Financing.

At TAssets, we are working on developing deep tier solution which supports Large Corporates through issuance of ‘Green Tokens’.

These tokens are used by Large Corporates to incentivise their Tier-2/3 suppliers to implement and meet ESG guidelines; this helps large Corporates to meet relevant compliance under Scope 3 guidelines.

Some of the benefits of Tokenization are:

1. Fractionalization: The underlying asset can be split into smaller units which promotes wider access to audience.
2. Immutability: Since solution is built on Blockchain wherein data is stored on multiple nodes, tampering with data
3. Operational and cost efficiency: Breaking the bigger chunk into smaller pieces provides for granularity and operational efficiency.
4. Incentivization: Green credits/incentives can be transferred downward in value chain.
5. As a cofounder in the asset tokenization space, what advice would you give to businesses considering tokenizing their assets?

Asset tokenisation is becoming one of the prominent use-cases of Blockchain Technology for assets like Invoices, green bonds, commodities (gold) and other non-financial assets (real estate).

As per BCG report, tokenisation of global illiquid assets could become a $16 trillion industry by 2030 

Supply Chain Financing which is just one of the use case of Asset Tokenization has a market size of ~INR 18 Lakh Crores of which we have barely scratched the surface at 5% through traditional financing means. Hence, there is enough TAM for new entrants to come and innovate in this space.

Indian Ecosystem needs more players into Asset Tokenization space to enable new use cases. This will also help promote education amongst various stake holders be it consumers, financiers, regulators and Fintech.

What are your success tips for young and aspiring entrepreneurs?

Amit Mahajan: Asset Tokenization as a concept is still in its infancy. It has various potential use cases be it Invoice Tokenization, Real Estate Tokenization, Incentivising for ESG Compliances etc.

My advise to any aspiring entrepreneur would be to read the market, understand the TAM, identify the problem statement and accordingly build a MVP.

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