All posts by Jonathon Narvey

CSE Issuer Stories, CSE Quarterly

Hello Pal harnesses language learning to connect people in a new way

This story was originally published at www.proactiveinvestors.com on Sep 7, 2016 and featured in The CSE Quarterly.

Learning languages isn’t fun, even though it should be. You take classes, study grammar from textbooks and painstakingly memorize vocabulary.

Finally, the big day comes. Your plane lands in an exotic capital. Maybe you manage to make yourself understood with the first people you meet. But maybe you embarrass yourself.

Maybe you never take the trip in the first place, because you don’t have the confidence. You give up. You might sulk and regret wasting your time – and now your world has become a smaller place.

Or, you could try Hello Pal.

Hello Pal international Inc. (CSE:HP) has a social language learning network that flips the language learning process on its head. You start connecting with real people right from the start, while learning and having fun.

With nearly 1 million members in a user base that’s still growing fast, the company has captured the imagination of investors. Starting with a share price of $0.12 in May of this year, the stock was sitting at $0.43 by mid-August.

To use Hello Pal, users download the app to their smartphone. Next, they connect with a pal on the network (Think ‘pen pal’ – since that’s what the Pal in Hello Pal comes from).

Choosing a language comes next. With the help of phrasebooks integrated into Hello Pal’s chat system, users click on a phrase and then click the audio button to hear a native speaker say it.

After that, they record themselves saying the phrase. They send it to their pal. When the pal responds, the chat system helps the listener understand. Now they’re both having a conversation in a foreign language, instantly.

The user-friendly app has a big idea behind it. “We want to bring the world closer by eliminating the language barrier and letting people communicate in a joyful way,” says KL Wong, the CEO and founder of the company.

Wong, who was born in Malaysia and now lives in Hangzhou, China, speaks several languages. Fluent in English, Mandarin and Cantonese, Wong also has a working knowledge of Malay and French. He is learning Japanese and Korean.

The hard experience of learning languages the traditional way partly influenced the development of Hello Pal, but this entrepreneurial journey was anything but a straight path.

Following successful careers in law and investment banking, Wong made the switch to entrepreneur shortly after the birth of his daughter, Felicity.

With her education in mind, Wong created a team in Hong Kong and built a company, BrillKids. The company sold software to parents to help them teach their young children to read.

Wong recognized early on that it was tough to keep parents motivated to teach if they were using the software in isolation. To make BrillKids more engaging, they attached a social network and forums into the BrillKids online store, where the parents would interact.

The company gained traction and international recognition. With the support of an early investor, Wong tried to bring the solution to China.

Then he ran into a cultural barrier to entry. Parents there didn’t want their preschool kids staring at computer screens. To adapt, Wong decided to use his existing language curricula and content and target Chinese children of an older age group where the computer screen issue was less acute, and to offer the content through apps.

The vision continued to evolve. One key factor to getting children’s engagement would be to connect them with kids from other countries. He was excited about the idea at first, but he soon realized having to get parental permission would be a huge barrier.

Then came the final pivot: instead of catering to kids, they would target adults.

Hello Pal incorporated the best ideas from his earlier experiments.

“Why do we learn languages?” Wong asks.  “Ultimately, to use it with real people. I started to see that beyond just helping people learn languages, I could actually play a role, however small, in helping people meet each other, communicate better and promote greater understanding around the world.”

He had a lofty goal, but at first not much of a business model for Hello Pal. “I just needed to get this product done, for the sake of many people to come,” Wong says. He put his team to work, to make this vision a reality.

When they launched in the spring of 2015, Wong had a last-minute case of nervousness, half-expecting Hello Pal to be a desert. Instead, the team’s efforts at leveraging the now-popular BrillKids community paid off with 1,000 signups on the first day alone.

They’ve seen a steady torrent of new users ever since. Today, the user base is over 1 million.

Wong still conveys that same boundless idealism of the original mission when he speaks. Still, it didn’t take long for the serial entrepreneur inside him to realize the value of what they had. He wasn’t alone.

Hello Pal’s early investor started talking with some other investors from Vancouver who were looking for their next big opportunity. They looked at the app, saw that Hello Pal was already at about 350,000 users and they were hooked.

A reverse merger and listing as Neoteck Solutions Inc. came next, before Hello Pal listed under its own name on the CSE in May 2016.

Growth followed. The company now has 18 employees in Hangzhou, consisting of a programming team that complements another team in Ukraine. International marketers and administrators work in Hong Kong. Three advisers operate out of Vancouver.

“We’re truly a global company because we have to be to do what we’re doing,” Wong says. “Particularly when it comes to operating in China, you need people on your team who are international.”

“It’s very difficult, for example, for a US company to do something like this and do it well in China,” Wong adds. “Even when I was in Hong Kong, I didn’t feel prepared to tackle China. That’s why I moved here. You’ve got to have a real presence there to have a chance.”

Today, Hello Pal is free to download and the company is pre-revenue. “Right now, we’re focused on user growth and acquisition,” Wong explains. But that will change.

“We feel we’re actually spoiled for choice in terms of revenue models,” Wong says. The company aims to target three silos of customers: social people who just want to meet people from other countries, language learners who want to talk to native speakers and travelers who want to meet people from other countries before they go there.

These groups have some common interests, but Hello Pal ultimately aims to cater to them in different ways, leveraging the huge user base when they’re ready to go after revenue.

“Just looking at the social marketplace, there are a lot of tried-and-tested revenue models that have been highly successful,” Wong says. He points to the Chinese social network Momo, which was valued at $3 billion not long after it had its IPO on the NASDAQ.

He points out that in China, social networks become very profitable by charging for VIP systems, small gifts, digital stickers (like emoticons on steroids, Wong explains) and many other offerings. “These are things that are not necessarily popular in the West, but hugely popular in the East,” he adds.

Beyond that, there’s advertising, sponsorship, and more. “When it comes time, we’ll have lots of options.”

Learn more about Hello Pal International Inc. at http://www.hellopal.com/ and on the CSE website at http://thecse.com/en/listings/technology/hello-pal-international-inc

CSE Issuer Stories, CSE Quarterly

Peak Positioning builds bridge to success in Chinese marketplace

This story was originally published at www.proactiveinvestors.com on September 1, 2016 and featured in The CSE Quarterly.

For technology companies based in North America, the Chinese market is an enticing yet perplexing marketplace.

China’s vast population and the increasing wealth of its industrious citizens make it attractive to outside entrepreneurs and investors.

At the same time, there are unique challenges for foreign companies wanting to do business there: a relatively arcane regulatory regime, an uncertain commitment to intellectual property rights and a business culture very different from in the USA or Canada. Google, Apple, Uber and other tech titans have each stumbled on these various hurdles.

Peak Positioning Technologies Inc. (CSE:PKK), based in Montreal, has a straightforward strategy for avoiding these barriers to entry: buying innovative companies and finding strategic local partners.

Peak is an IT portfolio management company. Its mission is to deliver value to its shareholders by assembling a portfolio of high-growth-potential projects and companies in the e-commerce and fintech sectors in North America and China.

The company closed a major deal this year as it finalized a partnership with the owner of the Zhonghai Wanyue Group Enterprises conglomerate of 29 companies, Jiang Wang, who is based out of Shanghai.

Peak received a $4 million strategic investment from Wang this spring. The company used approximately $3 million of the investment proceeds to pay for the development of a fintech platform called Gold River, and to establish an operating subsidiary called Asia Synergy Technologies (AST) in Shanghai.

Gold River is a web-based platform operated by AST that digitizes the distribution process of petrochemical raw materials and certain other commodities in China. The platform allows AST to receive and process orders from its clients and offer value-added services associated with the orders, such as purchase order financing, loans and logistics.

Gold River is set to process $575 million in transactions over the next 18 months, including $100 million by the end of 2016, with an average profit margin of 5%, explains Peak’s CEO Johnson Joseph. “Those orders are legally binding commitments from clients that AST simply now has to fulfill by the end of 2017.”

In return for Wang’s investment, the conglomerate owner received a 51% ownership stake in Peak.

The companies in Zhonghai Wanyue, together worth an estimated $10 billion, offer financing and supply chain solutions for a wide range of industries, from plastics distribution, manufacturing and clean tech to metals trading, auto parts distribution and financial services.

AST and Gold River will also help companies in the Zhonghai Wanyue group to transition from traditional offline paper-based operations to connected, digitally driven businesses.

The company didn’t start out by acquiring and managing ventures, though. Back in 2010, Peak was a security software development company.

Peak’s leadership team took their first trip to China, prompted by an entrepreneurial colleague who played up all the success he was having in the country’s tech sector.

“We knew that as a publicly traded company, if we could give our shareholders access to this market, it would be a big value-add,” Joseph says.

Peak learned the hard way about the challenges of running a new venture in China as they tried to develop security applications, a complicated business even under ideal conditions.

Differences in language, time zones and business culture played havoc with development timelines.

The company’s leadership team understood that there was still a huge opportunity in China’s tech sector, but after months of hitting a wall they had to change their strategy.

Around 2014, the company made a hard pivot. “We completely abandoned app development to become an asset management company, acquiring applications in China and Canada and delivering value to shareholders that way,” Joseph says.

While Peak is scaling the heights of success today, their leadership team is still realistic about the challenges of doing business in China. They have a healthy sense of caution and a desire to learn how to operate effectively in this environment.

“The biggest challenge is just learning about Chinese business practices in general, because there are a number of things we take for granted in how business is done,” Joseph says. “Just getting this transaction done with Zhonghai Wanyue was a challenge. In a situation like that, you usually just write a cheque.” The process took much longer than anticipated.

The Chinese government’s control of the Internet is another very direct challenge for technology companies. “Here, we take it for granted that if you want to put up a website, you just do it,” Joseph explains.

“In China, you need to have a license. Just look at Google, which is blocked and not allowed to operate in China. There are a number of things like this that we’ve learned and are still learning.” AST received its license to operate Gold River in mid-August, clearing the way to begin processing payments on their tested platform.

Aside from government bureaucracy, it is also common for business contracts in China to include verbal agreements on the side, in contrast to simply spelling all essential obligations out in writing.

To deal with these culture gaps, Peak has agreements in place between all of the parties it does business with to ensure that its subsidiaries and partners operate according to international business norms.

“We’re training them to be part of a public company that has the highest reporting standards and they are cooperating 100%,” Joseph says. “At the same time, we have to respect how our partners in China do business as well. If something doesn’t affect us negatively, we may be willing to accept it, but they also do what we need them to do to protect all of our interests.”

Being willing to adapt to unforeseen circumstances has helped the company get to where it is today. “Peak started out as something different, but we adjusted to be a portfolio management company. Then our first transaction didn’t work out because of circumstances beyond our control, but we did manage to get it done and that has turned into the best thing for our shareholders.”

With the revenue stream coming online from the partnership, Peak will continue seeking out new opportunities in China’s dynamic marketplace, Joseph adds. “We’re now in the process of building a solid foundation, which hopefully will allow us to build on a track record of success.”

Learn more about Peak Positioning Technologies Inc. at http://www.peakpositioning.com/ and on the CSE website at http://thecse.com/en/listings/technology/peak-positioning-technologies-inc

CSE Issuer Stories, CSE Quarterly

BitRush blockchain-based payment platform shows users how to get paid

This story was originally published at www.proactiveinvestors.com on Sep 02, 2016 and featured in The CSE Quarterly.

“Nothing makes money like money.” It’s a mantra from the world of finance. In today’s frenzied fintech sector, we might soon say that nothing makes money like companies that move value, in any form it takes.

Funders poured nearly $5 billion into American fintech companies in the first quarter of 2016. It’s why VC funding for bitcoin and blockchain (the technology that bitcoin and other cryptocurrencies are based around) companies topped $474 million in 2015. Companies in this sector are fired up to put out the payment solutions that can be the currencies of the future.

You might think humans already solved the problem of how to pay for stuff. But cash gets stolen. Credit card fees are punitive. Fraud associated with the plastic in your wallet costs American merchants alone $35 billion a year. The currency exchange fee at the airport and with credit cards will put you off travel for good.

That’s why fintech upstarts are getting so much attention. Enter BitRush Corp. (CSE:BRH), with its patent pending blockchain-based universal payment system ANOON (www.anoon.co). It integrates cryptocurrency systems and fiat currency money systems into an easy to use digital means of payment. The company aims to help everyone tap into a mobile peer-to-peer economy that solves some of our biggest pain points around payment.

Launching in 2014, the Toronto-based company invested in a portfolio of promising cryptographic solutions from North America and Europe.

The platform relaunched in June, incorporating features requested by customers. BitRush partnered with Wave Crest, another payments solution company, in the first half of 2016, which gave them access to the Visa and MasterCard networks.

A zero-balance ANOON Visa debit card usable anywhere Visa is accepted from point of sale to ATMs worldwide came out this summer as well.

The company keeps adding new functionality, such as its recent integration with PayPal. The debit cards are directly connected with the user’s ANOON wallets and don’t need to be preloaded. As long as the user has funds in his wallets (in whatever currency) he can spend them using his debit card.

As ANOON is a multi-currency system users can hold funds in many currencies at the same time and easily transfer funds between different currency wallets. The currency conversion is done in real time deploying a smart conversion algorithm and bitcoin as a clearing currency. Users can fund their wallets using bitcoins (and other cryptocurrencies in the near future), PayPal, credit cards and bank accounts.

When BitRush’s founders started out, they asked one key question: where could blockchain have an advantage over the legacy payment systems in place today?

“We designed ANOON to match, or in some cases, go beyond the core capabilities of the biggest payment systems out there, combined,” says BitRush President Karsten Arend.

The platform offers instant and secure transactions, ease of access to funds, intuitive controls and privacy. Arend says that as far as they know, BitRush is further along with their offering than any of their competitors, including some who have raised tens of millions and in a few cases, more than $100 million.

“The system has been running just fine,” Arend says. “It’s robust. It’s tested. We’ve created a system that people can use how they want to use it. They never have to deal with cryptocurrencies if they don’t want to. They can just use fiat currencies. It’s universal.”

How does he know the system is so robust? BitRush is already processing up to 50 million micro and nano transactions per month. The company tested their proposition the hard way, by reaching out to their target markets at the same time that they built ecosystems in which ANOON could flourish.

Those transactions add up to a highly scalable business with attractive margins. Using its private blockchain, payment transactions between ANOON wallets can be cleared on a real-time basis with nearly zero costs.

ANOON has implemented free basic wallets as well as premium wallets available for a fixed monthly fee. Recurring revenues from the fixed fees constitute a main source of revenue.

They also created viable businesses that have a competitive advantage by using ANOON, just to show other companies what they could do with it.

BitRush runs the AdBit advertising network (www.adbit.co), a platform with more than 10 million unique visitors and 1.8 billion delivered ad impressions per month. It lets website publishers auction ad space to advertisers via a smart-bid system. AdBit is deploying BitRush’s ANOON to process payment transactions.

The hyper-efficient ad broker uses bitcoins as a clearing currency that pays website owners in real time. That means no more waiting weeks or up to a month for cheques from Google or other ad networks. The system also provides more useful data for advertisers and publishers, letting them target ads better.

Meanwhile, BitRush also owns Start-It, a publisher of cryptographic games, along with a Player vs Player gaming portal, WaggaWagga. Start-It’s cryptocurrency-based gaming sites already have 7 million unique users per month from more than 180 countries.

The need for some kind of cryptographic payments solution in gaming is intuitive: people often don’t feel comfortable giving their private information or depositing funds with a gambling site. That leads to a huge drop-off in potential users and a commensurate reduction in potential revenue.

From the gambling site operator’s perspective, trust is also a problem: it’s not uncommon for online gamblers who lose to claim their information was stolen and then demand a refund. That’s just not good for business.

By simply integrating ANOON with the gaming site, a player will be able to start gambling instantly, without giving away private information to a stranger or depositing funds on a site they just discovered a few minutes before.

AdBit and gaming are essentially proofs of concept, since BitRush’s business model, at the core, isn’t about dominating advertising or gaming.

“We only built those businesses to show other companies that they would have a competitive advantage by using our ANOON payment system,” Arend says. “Instead of telling them how they might use it, we show them the advantages it has with our functional growing businesses.” Gaming companies and website publishers aren’t BitRush’s competition: they’re the customers.

For a company that’s developed a universal payment platform, it seems to fit that BitRush has a very international profile. BitRush is listed on the CSE as well as the Frankfurt Stock Exchange.

They also have stakeholders and executive board members who hail from eight cities on three continents, including Toronto, London, Vienna, Hong Kong, Singapore and other centers of commerce and innovation. “We’re Canadian, but we’re also global,” Arend says.

The success they’ve had so far has come from listening to their customers. “I know that’s nothing new, but we started out by speaking with our customers about what they didn’t like and built a solution to solve for that.”

“When we showed it to them, they started jumping up and down,” he adds. “It was a good thing. Sometimes you can solve the problem with greater ease than expected.”

Founders in any sector also need to follow success, Arend says. “What I mean by that is if you design your business to do one thing and find you’re getting great traction in a slightly different direction, find out why that’s happening. That might be the direction you need to go in. Don’t ignore it.”

Learn more about BitRush Corp. at http://bitrush.co/ and on the CSE website at http://thecse.com/en/listings/technology/bitrush-corp. Watch Karsten Arend’s presentation from the recent CSE Day in Toronto below: