Dec 11, 2023

Bitcoin-focused financial services company Meanwhile Group, backed by OpenAI CEO Sam Altman, has started a bitcoin (BTC) private credit fund.

Video transcript

A Bitcoin focused financial services company that's backed by open A I CEO Sam Altman is launching a Bitcoin private credit fund. Joining us now to discuss is meanwhile, co-founder and Ceo Zachary Townsend Zack. Welcome to the show. Great to be back. Thank you. All right. Talk to us about how this is gonna work. How is this Bitcoin Private credit Fund um going to be developed and implemented as you move forward? Sure. Um Well, we for a little background, um we run a life insurance company entirely denominated in Bitcoin. So that company takes in premiums in Bitcoin and pays claims in Bitcoin. It does all its solvency calculations in Bitcoin and critically, it makes investments in um Bitcoin loans to get Bitcoin yield. That is uh a critical part of our life insurance company is being an asset manager. And we realized, um you know, if we could, we would actually find a different, you know, uh a different asset manager or um you know, someone who's worked on this. So we realized that we had a problem which is we want low risk, low yield, um you know, a Bitcoin investments and that didn't really exist. So that's basically why we created this. So the pri the way the private credit fund works is uh, limited partners can invest dollars. Um There's a single close, which means that, um, you know, when we collect all those dollars, we do it one time and then, uh we convert all those dollars into Bitcoin and we only charge uh, fees, uh, based on um all the returns, we get people in Bitcoin. So if we turn, you know, we have 1000 Bitcoins in the, in the fund which uh you know, create 50 Bitcoin a year through lending operations. Uh Then we uh make money on that 50 Bitcoin, but we don't make any money critically just for the price of Bitcoin going up. Um I don't think that makes any sense and isn't fair to investors. Now, the last time you were on the show, we were talking about Bitcoin life insurance, talk to us about how the adoption on that project uh has been since your last time here. Uh Well, I don't want to sound too much like Pascal, but what I'll say is, um we're not really ready to release numbers. Um But, you know, we have bound, we are binding policies, we have hundreds of people on a waitlist. Um And actually to echo some meet, uh sometimes I feel like I'm running an anti money laundering company with a thin veneer of insurance on top. So, uh we are very deliberate, um, about onboarding people, one by one. I talk to every single customer, um, that on boards. I, uh, talk to them about the product. I explain it. I make sure they understand it. Uh, the pluses and minuses. So, you know, we're, we're making good progress. Um, but, you know, very deliberate progress and maybe in uh six months I'll be ready to talk about specific numbers. So, um, you know, you, you're involved with Sam Altman here, the guy's been busy, quite busy. It seems uh over the past week just trying to keep his CEO job. Uh What's the arrangement there? And, and also what's the story with A I I mean, do you guys have any A A I involved or is it just, he's just throwing some money in there and you don't have to sit there and ask uh design me a life insurance involving crypto. Yeah. So uh let me take those two questions separately. The first one is, how is Sam involved? I mean, Sam's uh our largest outside shareholder. He was one of our earliest investors. He is not involved day to day, as you say, he is incredibly busy. Um You know, changing the world with open A I and um I think maintaining uh all the great progress they've made there. Um So we are really happy to have him on the cap table, really happy to have him as a backer. Uh When we ask him for advice when we ask him for feedback, when we ask him for, um you know, do something for the company. He uh he, he delivers, I think he's one of the best investors one can have on the cap table. Um But, you know, he is, he's an investor like any, any other in the sense that he, you know, isn't involved day to day and your second question. Um You know, ultimately, I think one of the reasons that Sam invested wasn't just because we're a crypto life insurance company, but it's because of our ambition and our ambition is to serve, you know, be the world's largest life insurance company to serve a billion people. Um You know, we look out there are 57 countries in the world with inflation rates over 10%. We are eager uh to serve people all over the world. We think that um for many of the people in those countries and even countries like our own who are concerned about um inflation and concerned about uh currency risk and concerned about uh you know, regime risk that uh buying a life insurance policy in a global decentralized uh currency can make a lot of sense. And I think that ambition really spoke to Sam. Um And at the same time, uh you know, we are running a life insurance company with an incredibly lean staff. And the way we do that is through automation is through A I. Um we think about underwriting, we think about global uh am L those are things that, you know, we're building really everything from scratch proprietary systems. So at the end of the day, we see these two revolutions of uh digital money, which we think will allow us to reach as many people as possible in the world and A I which we think will allow us to serve those customers profitably. Zach, I believe I asked you this the last time you were on the show, but I feel like it's relevant again. You're building out these A I this A I infrastructure. It sounds like um for underwriting, is it something that you might consider licensing? Is it something that you might consider another um revenue avenue for you as you move forward to work with more traditional insurance companies? I think the way we think we're gonna work with traditional uh life insurance companies is potentially like country by country joint ventures, bringing to market uh Bitcoin denominated life insurance. So, you know, you just had SID on, he's in India. There are 30 million uh crypto users. You know, that sounds to me like 30 million people who might be interested in term life or accidental death or whole life denominated in Bitcoin. But, you know, I'm not an expert in uh the Indian market or the Indonesian market or the Nigerian market. So I think the way we see working with those uh traditional carriers is really uh combining their local regulatory expertise, their balance sheet, um their, uh you know, those capabilities on those sides and, you know, with our technology and our um Bitcoin focus, um I think actually licensing our technology, like, uh again, our ambition is to be the world's largest life insurer. And, um, fundamentally, I think, uh we see our A I and all of our software as a competitive advantage in that um, aspiration. Um Not something we wanna license out to other people. All right. And Zach very quickly before we go, the block is reporting that the fund aims to raise $100 million from investors. Uh Can you confirm that number for us? Yeah, that's our aspiration. Um You know, we have some early commitments but uh we, um you know, we're working toward that and I think, you know, most importantly for us, uh This is something that just hasn't existed in the world. Um You know, uh you ask, uh apparently every guest with me, like what is, why is the price of Bitcoin, uh what it is today? And fundamentally, we think that doesn't matter, it doesn't matter what Bitcoin is doing this week, this month, even this year. And the private credit fund is basically an instantiation of that. Um You invest in the fund, uh We give you steady Bitcoin returns and then we return all the capital in four or five years just like uh a private credit fund in trad I, um and we think that this is the exact uh part of the ecosystem that needs to be developed. Um People who are uh focused on long term investments, um you know, building long term infrastructure and that's what we do every day. And um that's uh what the credit fund is uh going to continue to do. Zach. We're quick learners on this show. We asked every guest except you and they gave us nothing. So we just, we scrapped that question for the last segment. Uh Well, I, I, I'm like to me if, if I knew what the price of Bitcoin was gonna do this month, I guess I'd uh I'd be trading minute to minute. But instead, II, I feel like I know what Bitcoin is gonna do in the next 50 years, it's gonna go up. So I built a business that uh caters to my strengths. Awesome, Zach. Thank you so much for joining the show. Always a pleasure having you on. And if we don't talk to you before the end of the year, we hope you enjoy the holiday season. I'll do my best. Hopefully, Lawrence, uh can find a smile on his face over the holidays. Appreciate it. Smiling. Plenty. Cheers. Uh That was meanwhile, co-founder and Ceo Zachary Townsend.

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