Banking Fintech InsurTech Interviews

Global Fintech Interview with Todd Bonner, Co-Chairman at NextPlay Technologies

Global Fintech Interview with Todd Bonner, Co-Chairman at NextPlay Technologies

Hi Todd, please tell us about yourself, how you arrived at NextPlay, and where the company’s opportunities lay?

I arrived at NextPlay this year and am responsible for the Fintech division. After a few years of Investment Banking serving tech and insurance entrepreneurs in 1990s, I moved to Asia in 1994 to become found an insurance company in Hong Kong.  I also ended up co-founding Pacific Century Group as well, which six years later executed the largest acquisition in Asian history up to that point in its takeover of Hong Kong Telecom. Between 1994 and today, I have founded or co-founded Asian-based media, insurance, merchant banking and real estate businesses. NextPlay, coalescences many of the opportunities, discovered and business networks formed in this journey.

In the first part of my career, I think opportunities existed because of asymmetry of information or of simply asymmetrical business contacts. These previous barriers have melted away for new entrepreneurs. Opportunities present in adtech and insurtech that I could only dream of prior to today’s high connectivity and prior to the recent emergence of blockchain. Parametric insurance is just one genus of examples that will reset the insurance industry.

Today’s opportunities are in part a function of new paradigms of accessing capital, and innovative paradigms of selling economic outcomes and of allocating risks.

As for the genesis of NextPlay:

In 2006 I co-founded Epic Games China, a joint venture with Epic Games. We provided outsourcing services to Epic and other AAA studios at a fraction of USA costs but equal quality.  We also were until 2014 the exclusive distributor of Epic’s Unreal Engine in Greater China and mush of SE Asia. Our development costs were low, and we saved Epic a lot of money-making art and maps.

In 2014 we founded a private company called Red Anchor and began coding a marketing automation platform with gamification and extended that platform to insert coupons and other benefits directly into native game content. Free-to-play video games have become increasingly popular, especially in Asia. Users can buy game objects, skins, or loot boxes, but only about 2 percent of gamers ever spend money.  This low monetization rate does not portend well for bushy-tailed Indie developers nor for monolithic evil game publishers whose cost structures only increase with the increased scale of game-scapes.  They need to monetize the other 98% of active users, with respect to free-to-play games.

In-game advertising (IGA) has not come close to reaching its potential because developers and gamers do not like their games polluted or interrupted with interstitials, pop ups and noisy banners. We think the IGA market could reach $200 billion this decade. Our technologies (HotPlay and HotNow) were designed to solve the biggest issues by integrating the ads into games without interrupting gameplay or game dynamics. We believe that this will increase monetization and retention of gamers and create a positive relationship between gamers and brands.

In 2020, one of the wealthiest families in Asia and owns interests in some of SE Asia’s largest physical retail chains, invested in HotPlay. HotPlay expanded its AdTech platform to offer affordable in-game advertising and marketing automation capabilities to even the smallest of merchants. Think “Shopify of Video Games”.

After a series of mergers and acquisitions, NextPlay has essentially three verticals, Adtech (IGA platform), Fintech (Online banking, Insurtech and blockchained asset management, and Travel, which shall extend into medical tourism.

Each vertical can stand alone but there is a unifying and rapid “go-to-market” strategy with these three verticals in that we are building a user interface that will combine the offerings in one meta-application which we are presenting via our Zappware acquisition to Android TV, mobile can cable operators globally.  The interest of the operators (mobile, telcom and cable) is compelling us to push our developmental resources in that direction.  Our Zappware acquisition, gives our service potential reach into tens of millions of households and even more mobile devices.

Thailand currently has one of the world’s largest shares of medical tourism revenue, at about 22 percent. I believe that medical tourism will grow faster than the video game industry. We believe, based upon compelling data, that, in the next decade, global medical tourism will grow about five times to a $300 billion industry – and that Thailand will likely retain or improve upon its current 22 percent share of this market.  We are therefore exploring partnering with the wealthy Thai family I mentioned earlier to build a medical travel platform that could give NextPlay enviable positioning in this market. The travel booking platform technology already refined by the original Monaker Group and its NextTrip business, could provide international patients visiting Thailand with travel and stay options, medical provider scheduling, telemedical services, medical record keeping, as well as travel finance and travel insurance services.  I am responsible for the insurance piece of that vertical.

Finally, in the last year and a half, we have concluded a series of acquisitions and tuck-in transactions to create, under the NextPlay banner, a synergy of companies bridging the physical and digital worlds enabling the natural cross-selling of customers from each business to the others. As part of this plan, we purchased 51 percent of a well-established Android set top box middleware provider called Zappware, whose platform is currently being adopted by 50 million interactive TV users – a great many of whom could become customers for several of our other businesses. Additionally, to take advantage of the worldwide surge in the popularity of crypto assets, we decided to form a fintech division and subsequently acquired a Puerto Rico-based digital-banking entity called International Financial Enterprise Bank – now renamed NextBank International — and a majority interest in an initial coin offering operator called Longroot Limited, one of the only 3 licensed ICO portals in Thailand.

Fintech innovations are dominating all other industries in some way or the other. What inspired you to take a dive into the fintech space in such challenging times?

Blockchain, smartphones and connectivity create multiple new applications and next-generation solutions in asset securitization, insurance risk underwriting and risk dispersion. Assets on the blockchain can be engineered which are largely immune to the traditional market risks associated with stocks, mortgages, and other derivative products. We are formulating them. We want our bank customers to survive the next crisis and perhaps even thrive. For example, around the time of the Asian currency crisis, in 1996, PCCW Group was growing so quickly that we needed additional capital for more insurance reserves to continue that growth. But, because of poor capital market conditions, we were forced to sell our insurance policies to a reinsurance company at what I believed to be a significant discount to fair value. There is an inefficiency for medium and smaller insurers accessing capital. That can now be solved.

On the primary insurance side, in 2015, an idea came to me for an enhanced insurance solution, in combination with blockchain, that could provide insurance companies with the requisite capital for growth while reducing their risk concentration. After re-validating this idea with a lot of math this year, we concluded the product was indeed viable and will therefore be introduced through our fintech division once our insurance license is approved. At the core of this division will be the company’s Bank – NextBank International — which will be transformed to offer cryptocurrency services, wallets, exchange platforms, merchant services and new products that work in conjunction with their traditional bank products.   We want to lower the barriers for our customers to quickly and intelligently allocate their hard-earned assets to investments that do not have negative real interest rates and may not get clobbered when there is another turn south in the cycle.

Can you tell us about NextPlay’s plans to establish cross-selling opportunities within its ecosystem?

NextPlay’s majority acquisition of Zappware, we gain not only material revenues and profits but also potential reach into 50 million users through interactive TV, expandable into more than 200 million mobile users via existing relationship with the operators – and we can very possibly market our Travel, Gaming and Fintech products to a great number of these users.  Another example: As mentioned, we are introducing medical tourism as a potential growth engine for our travel division – but we could also market this exciting new product through our Zappware ecosystem.

And there are many other examples. For instance, NextBank can assist our travel customers by providing loans for medical tourism travel and medical procedures, and offering merchant credit card services with loyalty rewards, points, and discounts. Our insurance division could provide these travelers a host of insurance offerings like trip cancelation, trip interruption, property loss and, of course, medical insurance. Finally, our HotPlay platform will be able to offer our travel customers discount coupons based upon these travelers’ locations and profiles. These cross-selling opportunities should make NextPlay an unrivaled end-to-end solution for our customers.

Tell us about your recent acquisition of the Puerto Rican Bank. Why did you seek a Puerto Rican banking license?

NextPlay saw an opportunity to accelerate many of our Fintech capabilities and aspirations by combining them with a banking platform that could both service new age products and marry them with traditional banking services. We want to lower friction between traditional Depositors and blockchained, premium quality cash flow streams and assets that they otherwise could not access.

For example, we wanted to create a range of crypto asset management products, which we believe should be more resistant to economic collapse or stock market crashes. Specifically, a product that securitized video games and insurance policy portfolios could provide alternatives — in the form of block-chained, economic decline-resistant crypto assets — for the investing public that would not decline in value when the economy declines. To this end, we needed to work in a jurisdiction that was both politically stable and respected on the world stage as well as having the flexibility within its Bank Charter to allow for servicing and support of cryptocurrency and cross border/international banking, along with brokerage/underwriting and insurance capabilities.

Puerto Rico satisfied each of these criteria and therefore became our obvious choice.

Which other regions are you planning to expand to in the next 12-18 months?

At present we believe that Asia is underbanked, especially with respect to offshore accounts from an Asian resident perspective.  So, because NextBank’s Charter allows us to service international clientele with an array of services and offerings – and since we are already geographically positioned in Asia through our HotPlay operations and key financial partners — we intend to pursue expanding services to Asia in Fintech, travel, medical travel, and media. We have been offered the opportunity to partner with countries that were formerly part of the Commonwealth of Independent States (CIS), and we are exploring the potential to expand into Latin America, as well as the Middle East and Northern Africa (MENA). These regions, we believe, are all under-insured and under-banked by credible institutions and many smaller customers have poor choice in assets they can buy.

Please explain any crossover plans for your Longroot ICO portal and the Bank?

In late 2020, NextPlay acquired a controlling interest in Longroot Inc., one of three Initial Coin Offering Portals licensed and regulated by the Thailand SEC. The company handles the creation of full prospectus offerings of Investment Tokens that, once approved by the Thai SEC, can be minted, and sold to retail clients. Unlike traditional securities underwritings, crypto securitizations allow for specialty underwritings of things such as video games, insurance, real estate, carbon credits, minerals and other assets that have or will have cash flow that can be secured as an income stream for the token owner.

Longroot not only provides a means of creating unique token fundings, but also produces access to a new investor base. This investor base is not only a key demographic to target for NextBank customers and the growth of its capital base, but also is a future group to target with new token offerings from Longroot clients and/or anticipated NextPlay underwritings in gaming, insurance, and medical tourism. The combination of Longroot and NextBank provides us with the opportunity to service international clientele with an array of services and offerings in these areas.

How and where does your recently announced acquisition of TokenIQ fit into your Fintech plans?

As you may have heard on the news, many early Bitcoin investors lost their passwords or wallet seeds, resulting in the inability to access their funds, worth billions of dollars. A critical function of TokenIQ is the ability to allow recovery of these seeds — a key solution needed by any cryptocurrency owner and one that will be a cornerstone for all NextBank customers. It also enables the crypto asset owners to pass on their holding to their rightful heir(s) without having to give away the wallet keys before the time comes. Additionally, the TokenIQ technology can be strategic and valuable in the “Know You Customer” (KYC) aspects for Crypto and coins which is a sensitive area that regulators are leaning hard on exchanges and dealers about. TokenIQ has filed patents on certain processes essential to the recovery of crypto seeds, and we will keep our clients informed as to our progress in this area.

You recently stated, your Fintech Division “plans to engage in insurance and alternative asset management business.” Could you expand?

As mentioned above, a major part of our Fintech strategy is to create alternative products that utilize crypto securitizations of assets that we believe will be resistant to economic collapse or stock market crashes. As such, we continually perform regression analysis on products that not only resist decline in a falling economy but may perhaps even appreciate. We believe the first two primary areas in which this will work are video games and insurance.

What is Longroot currently working on?

We previously announced a project with our Asian partners called Forestias – a green real estate development project in Bangkok. Additionally, we are in discussions on half a dozen other projects ranging from real estate-backed projects, to mining and carbon credits. These are all Asian based and not small.   With each potential project, we research opportunities for the crypto securitization of alternative assets, which can produce higher yields while having low beta to negative growth economic cycles – the key combination needed to successfully complete an underwriting in the current environment.  We will also look at high alpha opportunities, but only with extreme DD.

How do you see emerging technologies such as cryptography and blockchain disrupting the fintech space?

I see it happening in a most profound way, due primarily to reduced friction with respect to distribution – and I will posit, a much greater distributable market. This will change the way insurance, video games and any securitized asset can be financed, thereby lowering the overall cost of capital by making capital allocation and price discovery much more efficient.

How should young technology professionals prepare for the crypto-powered Fintech era? Could you tell us about the hiring roadmap you have for the next two years at NextPlay?

As we all have experienced, the paradigm of working from home has accelerated. I think at-home work productivity has increased in many cases, allaying an employer’s greatest concern, and reducing switching costs for both staff and employers. For members of the new generation entering the development workforce, I think learning to collaborate and deliver well from home will allow the talented of the next generation to find employment more easily but may also price the less talented developers out of the market. One cannot underestimate the profound effect that connectivity has on employment markets in general, and the induction effect of many talented young people entering the development labor market from, say, Indonesia, as 40,000 totally unconnected villages suddenly receive connectivity and the free, world-class virtual education of Khan Academy.

As far as our prospective hiring plans at NextPlay for the next two years, I can only say that we expect this period to be one of very exciting expansion into a myriad of new markets.  So, we welcome all ambitious and talented technology professionals to join us on what should be an exhilarating ride!

Thank you, Todd ! That was fun and we hope to see you back on globalfintechseries.com soon.

Todd Bonner serves on the Board of Directors for NextPlay Technologies. Prior to the merger with Monaker Group, Bonner co-founded and served as a Director of both HotPlay, an in-game advertising platform, and HotPlay Thailand. Previously Bonner was a member of the Board of Directors of Axion Ventures Inc, an online video gaming and technology company listed on the TSX Venture Exchange, which he co-founded in 2016. During that time, he started True Axion Interactive, a game studio formed via a joint venture with True Corporation, a major Thai telecommunication company, in 2017. In 2012, he co-founded Red Anchor Trading Corporation as an incubator for developing applications and predictive algorithms based on crowdsourced data. Bonner founded independent AAA games studio Axion Games, formerly Epic Games China, in 2006. In 2003, he founded Northstar Pacific Partners, an Indonesia Merchant Bank, and served as Partner until 2005. Bonner co-founded Pacific Century CyberWorks in 2000, where he served as the company’s Japan-based CEO from 2001 to 2003. During that time, he raised $2.4 billion to acquire Hong Kong Telecom, which remains one of the largest acquisitions in Asian history. Bonner began his career as an analyst and investment banker at Alex, Brown & Sons. Bonner currently serves as a member of the Board of Directors of Longroot Cayman. Mr. Bonner graduated from Stanford University in June 1989 with a degree in Biology and Biomedical Sciences.

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NextPlay Technologies, Inc. is a technology solutions company offering games, in-game advertising, crypto-banking, connected TV and travel booking services to consumers and corporations within a growing worldwide digital ecosystem connecting more than 50 million users. NextPlay’s engaging products and services utilize innovative AdTech, Artificial Intelligence and Fintech solutions to leverage the strengths and channels of our existing and acquired technologies. For more information about NextPlay Technologies, visit www.nextplaytechnologies.com and follow us on Twitter @NextPlayTech and LinkedIn.

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