Archive for the ‘Technology Related Articles’ Category

Prop-Tech, one of the innovative technology in Real Estate Brokerage industry in the 21st century

Friday, August 21st, 2020

Canadian property techs are in danger of dying from data starvation


Haider-Moranis: These startups represent the future of real estate and should be encouraged, not thwarted


The combination of artificial intelligence and big data is transforming businesses across the economy.  

In real estate, it has led to the emergence of so-called prop-tech, a class of technologies that address all different aspects of the real estate buying and selling process. While prop-tech is thriving in the U.S., it has not caught on to the same degree in Canada. The problem isn’t a lack of innovative algorithms — it’s access to data. 

A 2018 report by McKinsey Global Institute estimated that neural networks-based deep learning algorithms have the potential to “enable the creation of between $3.5 trillion and $5.8 trillion in value annually.” But such value creation is possible when the sophistication of algorithms is matched by the richness of the available data.

For Canadian prop-tech to be a part of that trillion-dollar value generation, real estate transaction data must be available to those who have the technical know-how to create products and services to enable informed and efficient decisions. 


Recently, the Toronto Regional Real Estate Board (TRREB) has cut off a data feed to a company called Bungol Inc., which operates a prop-tech business, for violating the “Authorized User Agreement.” With no new data, Bungol will struggle to survive as its user base shifts to other channels.

Bungol started operating as a Virtual Office Website (VOW) in 2018.Jack Zhang, a tech-savvy young entrepreneur, established the firm when the Competition Tribunal instructed TRREB (then known as Toronto Real Estate Board or TREB) to allow brokerages to share listings and sold data with prospects who have signed in and registered with a password-protected VOW. 


Before the Competition Tribunal ruling, brokerages were restricted from sharing sold data online with their clients. Brokerages could only show listings online. A federal court ruled in favour of the Competition Bureau against TREB that enabled brokerages to put sold data to good use.

Several innovative firms of various sizes and scope benefited from the ruling and launched innovative real estate businesses. We have written in this space about, which is also a VOW that enables a digital marketplace for buyers, sellers and real estate agents to find each other.

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Bungol is similar to Nobul. These businesses represent the future of real estate in Canada and are helping to redefine what a real estate brokerage can be in the twenty-first century. To understand the new model, let’s first look at the old model.

The traditional brokerage model involves a broker of record who established a physical office. For many years, fax machines were the instrument of choice in sharing documents. Buyers and sellers had to sign the print copies of contracts to be legally binding. Agents would drive back and forth between buyers, sellers, lawyers and financial institutions to finalize a deal.

Over the years, accommodations were made to accept digital signatures in place of physical signatures on paper so that contract documents could be signed and transferred electronically. Though other small improvements were made to benefit from the advances in technology, not much was accomplished for more intensive use of real estate data.

Instead, real estate boards in Canada have considered data as proprietary, and the user agreements specify howbrokerages may or may not use it. In an earlier directive, TREB cautioned members that its “data cannot be scraped, mined, sold, resold, licensed, reorganized or monetized in any way, including through the sale of derivative products or marketing reports.”

Bungol is a millennial-run brokerage that understands how smartphone obsessed millennials are likely to interact with the real estate sector.

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Bungol has no agents working in the office. It finds prospects and refers them to short-listed agents in other brokerages for a referral fee. It uses data to help buyers and sellers find each other with the help of a real estate agent. It is innovative while adhering to the traditional real estate model.

Technology is expediting the growth of innovative business models. It enables businesses to reach scale in just a few years. Before the use of information technology became ubiquitous, such growth took decades, if not more.

Bungol and others like it are struggling tech startups in the prop-tech domain in Canada. These startups will not survive if they are denied data. Their innovative algorithms and business models will die due to data starvation. Such an outcome will not be in the interest of the real estate industry that should embrace technology as others have.



© 2020 Financial Post

Important Tips: Adding Live Stream Open House to listing

Thursday, April 16th, 2020

Everything you need to know about adding a live stream open house to your listing

Nabil Imani

Please note: various jurisdictions have offered differing health and safety guidelines about showing property. REALTORS® should put safety first, follow health advice and only use the live stream feature when permitted.

We know the COVID-19 pandemic is severely impacting the way REALTORS® normally do business. That’s why we’re making it a priority to adapt with the ever-changing guidelines and rules set by government officials and healthcare professionals, so REALTORS® have the tools they need.

We recently added the ability to advertise live stream open houses on listings.


As virtual showcases and livestreaming open houses on social media become the new normal replacing real-life open houses, we encourage REALTORS® to take advantage of this new feature.

We know change can be difficult and we want to make it easier for you to adopt this new feature. We’ve answered nine of your frequently asked livestreaming questions to help you become a pro. Ready? Set. Action.  

  • What can I use livestreaming for?

You can use livestreaming services to showcase your listings and engage with buyers remotely and in real-time. You can tour the home, walk through the property and neighbourhood, and answer questions directly with buyers. 

  • What streaming platforms does support? supports all streaming platforms.

  • I am new to livestreaming; how do I get started?

Below are some guides that explain how to set up livestreaming on popular platforms. Note, platforms may change their set-up process over time. You can also do a Google search, “How to schedule a live stream on…” to find additional resources.


Tips and guides on livestreaming from the platform

Scheduling live streams/broadcasts


Live stream on YouTube

Introduction to live streaming


How to Use Facebook Live

Live Producer


Instagram Live: A Step-By-Step Guide




How to broadcast on Periscope


How to stream on Twitch



YouNow 101



How Do I Use the Livestream Mobile App?

How Do I Use the Livestream Mobile App?


Joining & Starting

Scheduling A Meeting



Live stream a Google Hangouts meeting

  • What URL do I use to schedule my live stream on

While setting up your live stream on your chosen streaming platform (Facebook, Instagram, etc.), you will be given a direct URL. You must use that direct URL on to link to your live stream on



  • How do I know if my board or association is sending my live stream information to

Please check with your board or association to see whether they will send your live stream information to However, if your board or association allows you to input your live stream information at the MLS® system level, and allows CREA visibility to this information, you will see your live stream information on the Listing Input page.

  • Can buyers watch my live stream on

No, your live stream will not be hosted on; therefore, buyers will not be able to watch your live stream on Buyers will be re-directed to the streaming platform of your choice to watch and access your live stream.

  • How will my scheduled live stream look on

A link to your live stream will be prominently displayed on your listing. On desktop, your live stream link will be displayed under the Description section. On mobile, your live stream link will be displayed above the Description section for higher visibility. We cannot control how the live stream option will display on DDF® listings as it is up to the discretion of the partner.

  • Can I schedule a private live stream for just my clients?

Some live stream platforms allow you to schedule private sessions, however, you should not link private live stream sessions on your listings.

  • Can I use pre-recorded videos?

While some platforms allow you to save previously recorded sessions, it’s not recommended to schedule these as live streams on as you cannot interact with your audience in real-time. You can add previously recorded videos and virtual tours to your listing. (Please note: MLS® System fields may vary by board or association).

Do you have tips for filming a live stream open house? Share them in the Comments below.




Copyright @CREA2020

Dust off your cybersecurity toolkit

Thursday, April 9th, 2020

Last Pass…


Dust off your cybersecurity toolkit

With an increased amount of time being spent online, it’s more important than ever to get up to speed on the cybersecurity routines that will keep you and your family secure. So let’s freshen up on some best practices that should be top of mind throughout every step of your day-to-day digital life.





Protect yourself from email phishing scams by asking yourself some important questions before interacting with a new email, such as: Was I expecting this email? Do I know the sender? Is there a sense of urgency for my attention? Are there links and attachments in the email? Never click or open an email until you can verify that it is legitimate.





Stop hitting that snooze button when your computer prompts you to update your software. Many times software is updated to protect against security flaws. So, if you don’t update, your device may remain vulnerable. Update your browsers, extensions, computer OS, mobile apps – do a full check to make sure you’re up-to-date and protected.





You probably will accumulate a lot of cookies and other tracking in your browser as time goes on. It’s a good idea to periodically clear your browser cache for “all time,” giving yourself a fresh start. And if you’re concerned about adware, consider an extension like AdBlock Plus to help cut down on your exposure.





You may be surprised how many sites and passwords you’ve accumulated in your LastPass account. Take a stroll through your vault, and start shutting down accounts that you just don’t use anymore – for example, one-time registrations or sign-ups for one-off purchases. The fewer credentials you have, the fewer credentials you need to protect.





As a LastPass user, you’re probably familiar with the power of the Security Challenge. But it’s important to take it regularly to see where your weak or reused passwords are, especially as your passwords age. Once you can see your weaknesses, LastPass can help you generate new passwords that are unique and secure.


Mastercard to open $510M cyber-security centre in Vancouver

Thursday, January 23rd, 2020

Investment follows a $49 million incentive from the federal government to entice the financial giant to B.C.

Tyler Orton
Western Investor

Ottawa is putting up nearly $50 million to boost the presence of Mastercard Inc. in Vancouver with the launch of a $510 million cyber security centre.

The credit card company announced Thursday (January 23) that the West Coast city would be the home of its sixth global technology centre — one focused on developing technologies to thwart cyber attacks in the payments arena.

In a bid to entice the financial giant to B.C., the federal government dipped into its Strategic Innovation Fund to the tune of $49 million.

A February 2019 analysis from The Logic revealed just over half the fund’s recipients were foreign firms, at the time the story was published.

Mastercard CEO Ajay Banga said in a statement, “The Vancouver centre will help us meet the growing demand for technology solutions to reduce the cost of cyber-attacks, enable today’s connected devices to become tomorrow’s secure payment devices and address the growing vulnerabilities associated with the Internet of Things.”

Mastercard’s new Intelligence and Cyber Centre will be based at The Exchange office tower on Howe Street, which counts Inc. among its tenants.

The Mastercard office houses Vancouver-founded cyber security firm NuData Security Inc., which Mastercard acquired in 2017.

Mastercard said in a statement the new centre will be “creating and maintaining” a total of 380 jobs, while the federal government estimated the new sit would create 100 new co-op positions.

NuData already employs about 100 workers in its downtown office, leaving Mastercard to hire about 300 more workers to meet the needs of the cyber centre.

Jill Tipping, CEO of the B.C. Tech Association, told Business in Vancouver Mastercard was clearly enticed by access to talent and the city’s connections with key markets around the world.

“I’m thrilled that they’re recognizing Vancouver as a great place to launch, but it makes it even more important that we put the investment into supporting our local homegrown companies,” she said.

“We’re going to continue to be attractive to major multinationals making foreign direct investments and that’s a good thing — but only if we make the investments to ensure that we have a balanced tech ecosystem.”

Tipping added that one of the other benefits of bringing in a company like Mastercard will be its ability to cultivate local talent.

“When major multinationals come to town and set up shop tackling big global problems, one of the things they do is they basically provide learning and growth opportunities on how to tackle scale-up problems, how to run a global business [and] how things happen at the multinational level.”

Mastercard is the most recent international company to show an interest in Vancouver.

Earlier this week, Silicon Valley-based fintech company Tipalti Inc. announced it was opening an office in the city next month, while fellow California tech firm Grammarly Inc. opened a 3,000-square-foot site in Gastown last fall.

Copyright © Western Investor

How Blockchain Technology Could Disrupt Real Estate

Tuesday, January 21st, 2020

The real estate industry is undergoing a digital transformation


Blockchain technology could have a major effect on the real estate industry, from property purchasing to due diligence to title management. We identify the early adopters and potential impact.

The real estate industry is undergoing a digital transformation.

While historically a “pen and pencil” business — often relying on inefficient and archaic methods for doing business and keeping records — technology has begun to help reshape the expanding global market.

Blockchain technology, especially, is feeding into this transformation (in ways similar to how the emerging tech is disrupting other long-established industries like banking and insurance).

The decentralized-record-keeping technology, which is designed to instill trust in the authenticity of digital transactions, could be used to create efficient solutions for both commercial and residential real estate — from buying property to conducting due diligence to enabling crowd-sourced investments, and more. 

Some big incumbents are already betting on the tech: Real estate giant RE/MAX has entered into several partnerships to explore blockchain use cases, while Hilton Worldwide has begun using a blockchain-based property management system.

In this analysis, we dig into how blockchain technology could transform the real estate industry, and the areas where we’re already seeing its impact.

Table of Contents

Why blockchain tech could benefit the real estate industry

Blockchain technology offers a form of shared record-keeping which is designed to be difficult to tamper with. Blockchain technology operates through decentralized peer-to-peer platforms, building resilience against the spread of corrupted information and boosting resistance to fraud.

See our explainer for more on how blockchain technology works


Blockchain technology has the potential to address many challenges within the real estate industry, including:

  • Improving trust and transparency: Blockchain technology offers a verifiable and censorship-resistant option for sharing information (such as valuation details).
  • Reducing siloed databases: Real estate processes would benefit from secure and tamper-resistant shared databases that compile data and documents from various different stakeholders in one place.
  • Making transaction processes more efficient: Most real estate transactions are still conducted through wire transfers and require costly verification processes that can take days to complete. Blockchain-based transactions could enable a streamlined process which delivers quickly and reduces costs.
  • Limiting the use of intermediaries: Many intermediaries — from brokers to escrow companies — could be rendered obsolete by blockchain-based approaches, as records could be stored, verified, and transferred using blockchain technology. Removing the need for intermediaries could dramatically reduce costs and save time.

Areas of real estate being transformed by blockchain technology

We consider several areas that could benefit from the use of blockchain technology below, from due diligence to financing systems.

Property Search Process

Currently, the most common method that brokers, owners, buyers, and tenants use to store and access property listings are through third-party platforms such as Zillow.

These platforms tend to be subscription-based and can command high fees from users. Moreover, there is a lack of standardized processes and often poor communication between the platforms.

This causes property data to frequently be inaccurate, dated, or incomplete. Further, the data can be fragmented across multiple listing platforms, which introduces inefficiencies.

Blockchain technology can fix these problems by allowing a property listing to exist on a single decentralized database.

With data distributed across a peer-to-peer network, brokers would be able to have more control over their data, as it would be more difficult for it to be interfered with by any third parties. Market participants could access more reliable data at a lower cost.

Imbrex is a real-world example of a blockchain-based property listing platform.

Imbrex’s real estate marketplace is built on the Ethereum blockchain. Buyers, sellers, and other agents can use the platform for free, earning rewards for contributing data and helping to maintain the marketplace.

Data is encrypted and stored on a blockchain, which means Imbrex does not control it and cannot alter it — contributed data is controlled solely by the listing party.

Imbrex is reportedly planning to launch smart contract-enabled transactions using its own cryptocurrency.

Due Diligence and Financial Evaluation Process

Physical paper documents for proof of identity are still the norm today. This approach requires the commitment of significant time and effort for due diligence and financial verification.

This manual verification process also increases the likelihood of errors and can involve multiple third-party service providers. These factors can be costly and slow down the due diligence process.

Using digital identities on the blockchain, this entire process can be taken online in a secure manner — increasing efficiency, lowering costs, enhancing data security, and reducing the chance of manual errors.

For example, a real estate property’s digital identity could consolidate information such as vacancy, tenant profile, financial and legal status, and performance metrics.

A digital blockchain-based solution is currently being developed by Lantmäteriet, the Swedish land authority, in collaboration with blockchain startup ChromaWay, Swedish telecommunications giant Telia Company, and several real estate enterprises.

Its goal is to digitize contracts for sale and property mortgages that are authenticated by blockchain technology.

This solution streamlines the process of transferring property titles while also adding some layers of security. All parties involved in the process, including the buyer, seller, real estate agent, the buyer’s bank, and the land registry, have their own digital identities.

Each can use a single application to securely send and sign official documents using blockchain-verified smart contracts. All actors can view the associated documents and information, with verification of the steps that have taken place during the process.

ChromaWay announced that it had completed a full transaction on the platform in June 2018.

Other organizations around the world are also making blockchain real estate strides. Bank of China Hong Kong (BOCHK), for example, stated in mid-2018 that it processes 85% of real estate appraisals using its own private blockchain.

BOCHK’s General Manager of Information Technology Rocky Cheng Chung-ngam said, “In the past, banks and [real estate] appraisers had to exchange faxes and emails to produce and deliver physical certificates. Now the process can be done on blockchain in seconds.”

Property Management

Property management is highly complex, with many stakeholders involved — including landlords, property managers, tenants, and vendors.

Most properties are currently managed either offline through manual paperwork, or through multiple software programs that generally don’t integrate well with one another.

Through the use of a single decentralized application that uses blockchain-backed smart contracts, the entire property management process, from signing lease agreements to managing cash flow to filing maintenance requests, can be conducted in a secure and transparent manner.

In residential real estate, for example, a landlord and tenant could digitally sign a smart contract agreement that includes information such as rental value, payment frequency, and details of both the tenant and property.

Based on the agreed upon terms, the smart contract could automatically initiate lease payments from the tenant to the landlord, as well as to any contractors that perform periodic maintenance. Upon termination of the lease, the smart contract could also be set to automatically send payment of the security deposit back to the tenant.

One business developing a blockchain-based property management system is Midasium. The company has built a private blockchain to execute smart contracts.

This allows traditional contracts, such as mortgage agreements and tenancy contracts, to be brought onto a blockchain to establish a history of agreements and financial transactions that can be traced and audited. 

All data, except for public information like property location, is confidential and encrypted. The intended goal is a reduction in legal, accounting, and transaction costs, as well as a decreased risk of fraud and corruption.

AQUA is another enterprise that offers a blockchain-based property management system, except its application is specifically for hotel and resort management.

The AQUA PMS application is a blockchain platform designed for inventory management, task management, and maintenance management. The service is seeking to help customers reduce operational costs and response times.

AQUA PMS is currently being used by Hilton Worldwide. 

Copyright 2020 CB Information Services, Inc.

Password management startup wins $200 million investment to grow enterprise business

Thursday, November 14th, 2019

1Password now has ‘millions of users and over 50,000 companies’ on the service

James McLeod
The Vancouver Sun

Toronto-based 1Password announced Thursday that it has raised $200 million in venture capital — the first outside investment the startup has taken in its 14-year history — as it shifts from consumer markets into the rapidly growing enterprise segment.

1Password offers a password-management service which generates unique, complex passwords and stores them so that a user can easily log into various accounts.

The service is available for individuals and families, but 1Password chief executive Jeff Shiner said that in the past few years the real growth in the company has come from businesses adopting the service for their employees.

“We started off as a consumer app, but over the last five years we’ve spent a huge amount of time and effort to build out the sophisticated tools that businesses need for password managers — reporting, auditing, provisioning and advanced permissions,” Shiner said.

“Businesses now understand the need for enterprise password management. They understand that it’s a real challenge for their employees to try and follow crazy things like password rules, but at the same time they need to protect their IP.”

The company says that it currently has “millions of users and over 50,000 companies” on the service, and that the enterprise business has grown by more than 300 per cent in the past two years. 

The $200-million investment is the latest in a steady stream of massive venture capital raises for Canadian tech startups in the past year. Quebec-based Element AI announced a $150 million investment round in September, while a second artificial intelligence company in the province, Coveo, announced a $227 million investment round earlier this month.

Also in September, legal software startup Clio raised $250 million. 

But Shiner downplayed the importance of the money, saying that the advice and connections that investors can offer is more important.

“It’s actually having a partner who can bring us the experience, bringing us the relationships, bring us the knowledge,” he said. “It’s more than just the money itself.”

Shiner said that marketing 1Password to businesses instead of individuals means they need to develop different marketing tactics, and different sales channels.

“We really feel like everybody needs 1Password, but from a growth point of view, the B2B side, that’s where there’s a big opportunity, but that’s also where we need help going after that opportunity,” Shiner said.

Arun Mathew, a partner at Accel, the lead investor in 1Password, said that they believe there’s a huge opportunity, because business operations are becoming more and more dependent on cloud services.

“If you look at the rise of cloud-based services, especially in the enterprise, we believe that password management has become even more critical,” Mathew said. “Employees are using more products than ever before across a variety of different devices, and CISOs and IT teams aren’t able to oversee the use of all applications accessed across their enterprise.”

Mathew said he expects the funding to allow 1Password to sell to bigger enterprise customers.

“The enterprise password management category presents a massive opportunity, and this investment will enable the 1Password team to work with larger enterprises and to integrate more deeply into platforms their customers use daily.”

Within the technology sector, security is a major area of emphasis right now, with nearly every company playing up their diligence and competency at securing data against bad actors and hackers.

Shiner said he thinks that passwords remain a weak link for a lot of organizations.

“We talk to a lot of companies, obviously,” he said. “The one thing I’m still amazed by is how many of these companies are still doing things like using sticky notes, they’re still using spreadsheets to share passwords and remember passwords.”

© 2019 Financial Post, a division of Postmedia Network Inc.

B.C. cryptocurrency exchange shuts doors owing more than $16M to customers

Monday, November 4th, 2019

Securities commission says RCMP notified about possible money-laundering concerns at Einstein Exchange

Jason Proctor
CBC Radio

Under a cloud of complaints, investigations and lawsuits, a controversial Vancouver cryptocurrency exchange has shut its doors with more than $16 million owing to customers.

The B.C. Securities Commission (BCSC) obtained an order last week appointing an interim receiver to oversee the Einstein Exchange, after filing a petition in B.C. Supreme Court claiming exchange founder Michael Ongun Gokturk could not be reached.

BCSC executive director Peter Brady told CBC News the commission has also notified the RCMP of concerns about possible money laundering raised by a former exchange employee.

“We received a number of complaints from customers of the exchange being unable to access their assets. We had sent some requests for information to the exchange twice and we didn’t get an answer,” said Brady.

“We were then talking to the company’s counsel and learned that the exchange intended to shut down within 30 to 60 days due to a lack of profit and subsequently that legal counsel stepped down, so that raised concerns for us.”

Einstein Exchange claimed in court documents it had “sufficient crypto assets to satisfy withdrawal requests from customers.”

But the BCSC claimed the exchange’s lawyers refused to specify the location of those assets.

In an affidavit, BCSC investigator Sammy Wu said he believes “Einstein improperly used their customers’ assets.”

Wu said commission staff determined that the company owes customers more than $16.3 million — including more than $11 million in cryptocurrencies and about $5 million in cash.

Wu said he went to the Einstein Exchange office last Friday and “discovered that the elevator is locked for all floors.”

“I called Gokturk’s phone number listed on their website and the recording said all their agents are not available,” Wu’s affidavit said.

“I called Gokturk and his voice mail said that he is unavailable and to send a text message since he does not check voice mail.”

Gokturk spoke to the CBC in January 2018 about a storm of online criticism that accompanied the opening of the exchange. Customers claimed that staff were slow to respond and expressed fear they might lose their money.

At the time, Gokturk claimed his team was overwhelmed by response and demand for digital currency and promised that “no one will lose their money here.”

The company’s website has been taken down but the Einstein Exchange Facebook page is still online. The page features many posts from customers demanding their money and warning others about problems.

On Facebook the company warned its customers about posting their information online because “we have been receiving many complaints that scammers have been targeting Einstein customers who have posted their account emails publicly.”

In addition to multiple customer complaints, the Einstein Exchange is also facing a pair of civil suits filed last month in relation to the transfer of cryptocurrency.

Hong Kong-based Sino Allied filed a notice of civil claim claiming it was still owed $1 million US after Einstein agreed to buy a form of currency named Tether.

And two weeks ago, Vancouver technology entrepreneur Scott Nelson sued Gokturk after claiming he had transferred 50 Bitcoin — equivalent to $535,000 — without receiving any money in return.

Nelson claimed Gokturk told him he would wire the money, but “repeatedly blamed technical issues for the failure.” Nelson said Gokturk then told him he would give him a bank draft, but none was ever delivered.

Gokturk has not filed responses to either of those lawsuits.

A default judgment was also issued last April against Gokturk and Einstein Exchange in relation to $116,789.62 owed on an American Express credit card.

The CBC was unable to reach Gokturk for comment.

Brady said the BCSC has warned investors to exercise caution when dealing with platforms that deal in cryptoassets because they tend to be higher risk.

©2020 CBC/Radio-Canada

Facebook has a ‘very significant image problem’ as it develops Libra digital currency

Wednesday, October 16th, 2019

Report says Facebook’s digital currency not accepted

Murad Hemmadi
The Vancouver Sun

Consumers in emerging markets are willing to use a digital currency issued by a technology company, as long as that company isn’t Facebook, according to a new report.

The study, from Toronto-headquartered research firm Riwi and the FinHub at the University of Toronto’s Rotman School of Management, shows that 35 per cent of Indian and 58 per cent of Nigerian respondents would use non-traditional money, more than the 29 per cent of U.S. participants. But in all three countries, significantly fewer were willing to do so if the currency were issued by Facebook than by a generic tech firm.

The findings suggest that while there is a market for digital currencies like Facebook’s Libra, which is scheduled to launch in the first half of 2020, suspicion of the social media giant may present an opportunity for competitors — especially in developing economies.

Danielle Goldfarb, Riwi’s head of global research, said North American consumers are less eager to adopt tech firm-created currencies because they already have access to well-established financial and banking systems. “We experience fewer frictions in Canada and the U.S. … than people in emerging markets,” she said, citing “long-established legacy payment mechanisms like credit and debit cards.”

However, she said, “the test of the Libra project is really whether there’s a demand in emerging markets.”

Since it was announced in June, Libra has been plagued by controversy. It will be governed by the Libra Association, a Geneva-based non-profit, which was supposed to include 28 founding members. Last week, however, all the major payment firms involved — including Visa, Mastercard and PayPal — dropped out following pressure from members of the Senate and the U.S. Treasury Department’s inquiries about the companies’ respective anti-money-laundering practices.

As Libra Association members quit, “increasingly it looks like Facebook is still in charge, and it always was,” Goldfarb said.

The association still aims to grow to about 100 members before Libra launches. The sole current Canadian participant is the Creative Destruction Lab, a startup incubator headquartered at Rotman and one of four founding “social impact partners.”


Riwi surveyed 5,068 respondents in India (3,040), Nigeria (1,200) and the U.S. (828). Half the respondents answered questions about whether they would pay for products and services with a Facebook-issued currency, and the other half about a currency from a technology company in general. The survey did not ask specifically about Libra because the “name does not yet enjoy widespread awareness,” the report states. Participants were also asked which of four concerns about using such coins was their highest priority: data privacy; the money failing to keep its value; a dislike of Facebook or technology companies; and the idea that only governments should issue money.

There is a particular opportunity for digital currencies in emerging markets, where economic and political volatility can make new financial technologies like Libra more attractive to consumers, said Goldfarb, who co-authored the paper with Andreas Park, an associate professor at the University of Toronto Mississauga’s management department. In India, mobile-wallet app downloads and transactions soared after the government suddenly removed high-value banknotes from circulation in November 2016, although some users have since gone back to cash.

“Places like Nigeria have basically skipped over this credit-card, debit-card period,” said Goldfarb. “They’re leapfrog economies, and they’re really moving toward some of these newer payment systems.” According to the World Bank, there were 4.1 credit cards per thousand adults in Nigeria in 2015, compared to 172.5 e-money accounts — prepaid wallets, often offered through mobile services.

Calibra, Facebook’s new financial services division, is also building a mobile wallet that it will integrate with its Messenger service and its subsidiary WhatsApp to allow users to transfer money at lower rates and to make purchases within the apps. The firm is already working on payments infrastructure in emerging markets — WhatsApp plans to launch a service in India by the end of 2019.

A white paper published by the Libra Association cites high remittance fees as another problem the digital currency is supposed to address.

The study asked half of the participants whether they were willing to use money issued by a tech company, and the other half about a digital currency issued by Facebook specifically. In each of the three countries, the survey found fewer participants were willing to use the Facebook-issued coin. The company has a “very significant image problem,” the report states.

The gap was largest in India. Facebook’s reputation in the country remains damaged by its attempt to launch, which gave users access to a limited number of apps and websites separate from their mobile-data allowances. The Indian government banned the service in February 2016. In the Riwi-Rotman survey, more Indian respondents listed dislike of Facebook as their main concern about using non-traditional money, rather than worries about data privacy; among Nigerian and American respondents that finding was reversed.

Overall, consumers were most concerned about what the firms developing digital currencies would do with their personal information. Far fewer believed the coins would not retain their value, or that only governments should have the power to issue money.

But policymakers have focused heavily on that last issue. EU governments have expressed “strong concerns” that digital currencies could undermine their sovereignty; in September, Calibra head David Marcus tweeted to clarify that Libra is not meant to replace national currencies after he faced questions from the representatives of 26 central banks.

Across all three countries in the study, “there’s quite a bit of a backlash against Facebook,” Goldfarb said. The authors found that was true even for respondents who already had a Facebook, Instagram and/or WhatsApp account — they were 1.5 times more likely to be willing to use a currency issued by a generic tech company as users asked about one from Facebook.

© 2019 Financial Post, a division of Postmedia Network Inc.


Slack Falls After Projecting Slower Second-Half Sales Growth

Wednesday, September 4th, 2019

Nico Grant

Slack Technologies Inc. shares plunged in extended trading after projecting slower sales growth for the second half of the year, a signal that strong competition may dent the software maker’s rapid rise.

Revenue will be $154 million to $156 million in the fiscal third quarter, reflecting a year-over-year increase of 46% to 48%, the San Francisco-based company said Wednesday in a statement. Analysts, on average, estimated $154.2 million, according to data compiled by Bloomberg.

In the period ended July 31, sales jumped 58% to $145 million. Slack reported an adjusted loss of 14 cents a share for the quarter, compared with analysts’ estimates of 19 cents.

Slack reported results for the first time since completing a direct listing on the New York Stock Exchange in June that made the software maker a publicly traded company. While there is a free version of the company’s software, Chief Executive Officer Stewart Butterfield has sought to increase the number of large companies that pay to use the workplace communications product. Slack will have to maintain soaring growth to please investors while competing against the world’s largest software maker, Microsoft Corp., as well as Alphabet Inc. and Facebook Inc.

“The rate of growth as you get larger is going to go down,” Butterfield said in an interview. “But that’s still very strong growth. The thing that we do is focus on the value we’re creating for customers. It’s going to be a long transformation.”

Slack’s shares fell about 15% in extended trading after the earnings release. The stock has climbed 20% to $31.07 since the company went public, though it also has dropped about 20% from its closing high of $38.62 on its first day of trading June 20.

The company reported its net loss widened to $360 million, or 98 cents a share, from $31.9 million, or 26 cents, in the period a year earlier.

Slack had been one of Silicon Valley’s most-talked about unicorns, raising about $1.3 billion in total funding, and gaining a valuation of $7.1 billion in a funding round in August 2018. The company has sought to emphasize that it’s more than just an office messaging platform where employees chat using memes, GIFs and emojis. The system connects to companies’ other applications in an effort to streamline corporate work flows.

The company raised its fiscal 2020 sales forecast to $603 million to $610 million, which would mean an annual growth rate of 51% to 52%. But the midpoint missed analysts’ average estimate of $607.2 million.

For Slack, the key to growth is fueling demand among large businesses. Less than 1% of Slack’s customer base was made up of large customers that spend more than $100,000 a year, according to Bloomberg Intelligence analyst Andrew Eisenson.

The company’s success adding large customers also slowed in the quarter. The number of those customers grew 75% to 720 compared with a year earlier, but that’s slower than the pace of the fiscal first quarter. It’s also dwarfed by Slack’s 97% growth in this metric a year ago.

While Slack’s paid customer base increased 5,000 in the quarter to 100,000, the pace of growth has slowed down — to a 37% year-over-year increase from 55% a year earlier.

Bloomberg Beta, the venture capital arm of Bloomberg LP, is an investor in Slack.

© Bloomberg

The Tech Stock Boom Has Arrived in Canada?s Market (Finally)

Thursday, August 22nd, 2019

Tech-stock boom has well and truly arrived in Canada’s market

Divya Balji

It makes up almost 6% of Canada’s stock market and is the best-performing sector this year.

That’s right: technology stocks have climbed a massive 59% in 2019 — more than double the next-best industry group on the S&P/TSX Composite Index. In fact, tech’s share of the benchmark index has grown at the fastest rate among all sectors in the past four years, according to data compiled by Bloomberg.

“The tech ecosystem in Canada is very robust,” said Todd Coupland, managing director of institutional equity research at CIBC Capital Markets. “There are some high-quality growth companies that have begun to scale up over the last few years and they’ve gone public, and the success of those companies is manifesting itself in higher share prices.”

Canada’s tech sector hasn’t always had a smooth road. Fortunes have ebbed and flowed with the likes of BlackBerry Ltd., formerly known as Research In Motion, and now-defunct telephone equipment maker Nortel Networks Corp.

But the S&P/TSX Composite Information Technology Index, with a mere 10 members, is now on track for its seventh year of gains — its longest winning run on record — having added C$108 billion ($81 billion) in market value in 2019. In comparison, the S&P 500 Info Tech Index, with 68 stocks, has climbed 29% this year after a 1.6% decline in 2018.

Ottawa-based Shopify Inc., which has climbed more than 1,500% since it went public in 2015, is a big part of the success. It has a 39% weighting on the tech sub-gauge and comprises 2.18% of the broader benchmark.

“With Shopify getting bigger and bigger, it’s getting more on the radar of larger, more global focused investors,” said Suthan Sukumar, an analyst at Eight Capital. “That is drawing more eyeballs to the Canadian market.”

It isn’t just Shopify that’s making waves. Lightspeed POS Inc. — which boasted Canada’s second-biggest IPO this year and the biggest offering by a Canadian tech firm in almost nine years — had a stunning trading debut in March. The stock has climbed 175% as the company forecast annual revenue that beat analyst expectations. That performance isn’t reflected in the S&P/TSX Info Tech index, which hasn’t yet added Lightspeed.

And another tech company is looking to follow in Lightspeed’s footsteps. Toronto-based Docebo announced Wednesday that it filed documents with regulators for an IPO.

With valuations sky-high, it’s worth asking whether the rally can last. The price-to-earnings ratio for the S&P/TSX Composite Info Tech gauge stands at 34.6, compared with the broader benchmark’s multiple of 14.3.

Sukumar says he sees opportunity in at least some corners of tech.

“There is an opportunity for investors to continue rewarding higher-quality growth and growth that can prove to be resilient in these kind of market conditions,” he said.

Copyright 2019 Bloomberg L.P