Thanks for joining us Ammar! Great to have you here. Could you introduce yourself for the audience and describe your exciting new role at Luna?

Sure. My name is Ammar Akhtar and I'm the CEO and one of the founders of Luna Protocol. Luna is not a cryptocurrency company or a token - rather, it is a SaaS platform which provides a managed smart contracts infrastructure focused on private markets financial instruments.

Nice. And before this, you co-founded core banking platform Yobota. How has that experience shaped your approach to building this new startup?

That’s a good question. I think when you go through starting and building a business for the second time, there are a lot more learnings that you can bring to bear. Some of those relate to the product build as well as the overall business build. But I think even more so, it comes down to having an appreciation for just how hard different aspects of the startup journey truly are, as well as the type of mindset you need to equip yourself with to navigate through the ups and downs. In some ways, that experiential understanding of the grit required feels even more relevant than specific domain knowledge, because in our current business the market context, product landscape, and team skills are all quite different compared to my prior experience.

Interesting perspective. So then what specifically inspired you to start Luna?

Well, I’m one of three founders here at Luna, and the senior founder is a guy named Andrew Tarver, who is someone I've worked closely with for many years including at previous ventures. Andrew is also one of the Founding Partners at Motive Partners.

The inception around Luna was really an exam question that was sort of around the table with Motive through some of the larger asset managers and investment firms they work with. Just really, how do you efficiently scale private credit? So, where you have this massive one and a half trillion-dollar market with 10% growth rate over effectively like the past decade, how do you continue that growth, which is what everyone's anticipating, that the financial trends point to, but also how do you do that in a way that's sustainable and can effectively increase profitability, increase market share for the best in that industry? And some of that is tech or a lot of that really comes down to technology. So, we looked at it overall from the perspective of what are the problems here? And what are the challenges to address? And the challenges to address are you have a lot of bespoke deal structures.  

Almost every deal structure is bespoke, volumes are variable. You have all sorts of different counterparty structures, different economics, and different jurisdictional considerations, and you end up with a lot of existing systems across all the different parties involved in any given transaction. And these systems do certain things very, very well, and they've been built to do certain things very, very well. And other things they don't do very well, and they don't tend to communicate very well necessarily. So, you end up with very complex, sticky operational processes. And the scaling challenge then becomes well, or the scaling problem then becomes, and this is really a problem, is scale or variability then requires more people. For us it was, how do you solve that problem?

Luna was set up as a prime response to that. So, what we've done is essentially build this managed smart contract infrastructure, which is designed to give you full expression in terms of the financial instruments you are able to create and build and express through it, and then just let you execute and orchestrate across any number of existing systems, or where there just isn't system capacity. You can just build the logic you need directly into our contract’s architecture. And you need to be less concerned about manual processing and sort of manual scaling or human development scaling. And that's been proven over time as we sort of work with our partners. And we're really seeing some encouraging results around it, which we can go into because this is very long answer to your question.

It's definitely a fascinating topic, especially for a sector that is that large and that has historically not[?] been disrupted. It's also because of the extreme complexity, as you say, of all the clauses, governance and the legal ramification that you need to execute it. Can you elaborate a bit on what is it in terms of technology that enables now to effectively tackle that problem that maybe wasn't there a few years back?

Sure. I think some of it is like the normalisation of concepts like smart contracts and managed or distributed ledgers and things like that. And we're not necessarily a distributed system. We have multiple modes in which we can operate, but some of it is normalisation of that. Some of it is basically kind of almost like a generational change, right? Like people don't necessarily want to sit around just clicking spreadsheets as much anymore. Or the experience everyone has when they're dealing with apps on their iPhones or Android phones or buying something off Amazon is so smooth. Upgrading an iPhone is so smooth, all the way from physically ordering the phone through to scanning that incredible whirly globe thing that comes when you’re syncing devices.  

Why isn't that happening at work in an environment where there's seemingly unlimited money to make investments and do very complicated, high-minded deals? And because of that, there's kind of this ability to say, okay, let's challenge the siloed and islands, let's change the way we're thinking about it.

So mainly then, a lot of behavioural kind of changes and the adoption of, as you say, smart contracts. It's much better known than it was previously.

Yes. I think there are certain relevant inventions that enable this to happen, but ultimately, any of these sorts of changes must be behavioural, must be based on the expectations of the people who would use these systems or require them to do things.

Relevance and Trust as well, isn’t it?

Yes, absolutely. And just being comfortable that you're working with something that runs in a browser or that you can write a script and deploy it, and it's not going to commit some sort of nefarious crime in the background because you're dealing with seemingly advanced computer technology. Trust, I think, comes into it as well.

Maybe also the availability of data and the way you can feed in the data automatically.

That’s a really important point. You mentioned governance earlier, and monitoring. When we talk about data in the context of governance, portfolio monitoring, deal monitoring, due diligence and sort of ongoing, that is a huge part of the challenge overall and huge part of what people actually do in this industry. What are we underwriting? Has the cash been received? What are the NAVs, have the NAVs been audited? What is driving the values and so on, where do we think it's going to go? Based on the rich contextual information you can now capture from what is going to happen, based on all the rich contextual data that you can capture from so many different sources, including great products like Sikoia as well. So that makes a huge difference.

A lot of what we're focusing on is just how you literally plumb that data straight into the processing and the logic of these contracts themselves. So the data that you would typically have in different spreadsheets, FTP lookups, vlookups, hlookups, those sorts of things that people have to have to build analysis environments that are great for spot checks, but then become the production runtime of a multibillion dollar investment that tends to run for a long time, and it definitely becomes problematic so we can give a real sort of iteration and evolution beyond that.

That sounds super exciting, especially because of all the operational and regulatory risk that this kind of approach reduces completely. Plus, combined with all the manual cost savings, you will have a pretty huge impact on the industry.

There is definitely a cost out component of this, because you can certainly have people who spend, people who are earning, call it $150,000 a year or something, plus who spend most of their time reconciling data, but actually should be spending their time thinking and doing analysis and coming up with transaction ideas. You can sort of pivot the attention and the mindset of people towards that. And so, there's an element of cost out because you just need less grunt work basically to go into, but then there's also actually a whole revenue up.

There's function to this as well, because if you can equip everyone who's in the industry with better tooling, better technology, better data, better ability to join insights from data, and from processing technology, you can effectively build better deals, offer better liquidity, offer better credit, and that overall, that's like the whole premise of economic prosperity and so forth. There's a whole engine effect from things like this.

Your solution enables as well for different roles as well within the process to consume the data differently. Do you have some logic on your platform as well, depending on the role that you have in terms of looking at those contracts?

Indeed, we offer something that ultimately has access controls and audit and permission management in the way that one would expect from enterprise technology. But crucially, what we enable is like the kind of compilation and construction of these different counterparties, roles and workflows, and who can do what, who should do what, who needs to do what and by when. And that means it's not just a case of I need an administrator to go and approve something, or I need a manager to go and approve something or check something, or only they can look at stuff or access stuff. You're literally saying, we are doing a transaction. The transaction has specific needs, specific requirements, and you just build it and deploy it there and then.

Coming back to Luna - where are you currently in your startup journey and what are some of the key milestones ahead?

We're at an exciting point right now. Over the past months we've been building a little alpha group of users as we're preparing for a SaaS launch of the product. And over the next one or two quarters that'll be much more openly available online for people to access and just try for themselves and start building with. Our primary focus as we got to that stage was with some enterprise clients.  

We're doing a rollout with a national non-bank lender in the US who've got an interesting use case around complex commission agreements that they have with their distribution partners. We're working with other mortgage origination companies as well as, and solutioning how they ultimately syndicate the assets they generate and different ways they do that. We've also working with some trade finance providers also to how to give support for the variability that emerges in that sector. So that's been a great build over the recent past, and now we're effectively growing that in several different ways across the enterprise channel, and then sort of more directly through SaaS as well.

So, it’s really a SaaS product for business users to implement and encode?

Yes, exactly. It’s not for personal projects, but it would be something that you could use like Airtable.  

More low code usage where it's ready to go, as opposed to something technical, somebody technical within a company to kind of implement?

Yes, if you're comfortable scripting, you'd be able to pick it up very quickly. It's not entirely non-technical, but it's designed to alleviate many of the technical concerns associated with deploying resilience, failover, and transactionality in your operations, among other things.

So, we take as much complexity away as we can and just give the ability to say, “I'm just trying to build a structure and get it on the Internet”, which might seem like quite a reductive way of expressing everything else I was just talking about. But ultimately commerce is done online, right? Build something that ultimately allows you to transact.

Super exciting to see it all coming together! Zooming out beyond the world of Luna now, at a macro level across fintech what trends or sub-sectors intrigue you most in terms of innovations happening today?

At the highest level, I'm really sort of interested in how we start seeing more open applications of alternative data sources and complex algorithms over those, and being more open about what those are because I think that there's a lot that happens in the background, or is claimed to happen in the background about how banks, certain banks, certain lenders or payments companies or whatever, have better AI based underwriting and better AI based board checks on payments and things of that nature. Really seeing how that can be pushed and how far we can take it, especially given the amount of information that's openly available today, like either again through APIs or services like Sikoia.  

The data that's derivable. And when you start putting that together with some of the developments in the AI space and the ability for a lot of these kind of generative tools now to sort of access the Internet, get them to execute bits of code and things of that nature, there's some very interesting things that start to be built that'll be quite fascinating. Part of that is just almost getting to this model of how you just sort of get funding or get credit into the hands of people, be it businesses or be it consumers just then and there for the thing that they're trying to do, not the thing that's like the algorithm suggesting that they do, but the thing that they're actually trying to do. And they're just like bam. On a whim, I want to book this flight. On a whim, I want to buy this amazing green sofa I've just seen or something like that. And if they really do want to do it, how do you make that happen? And I think we're approaching a stage of that can be done in perhaps more ways than have been sort of typically available, where you just have to slap a card down.

Discussing the world of fintech, there's significant friction that remains unaddressed. To your point, consumers might not directly notice it, but it pervades many aspects of financial services, especially when it comes to purchasing financial products‍

Yeah, a concern that stands out to me, though it may not be widely discussed or visibly exciting to many, is the shift away from personal ownership models. Despite not seeing a widespread enthusiasm for this issue, I am deeply passionate about exploring and advocating for ways to revert this trend.

Because generally right now no one really owns anything anymore. We're in sort of peak stuff, peak debt, and effectively, as a result, peak insecurity. The financial system is there to support stability and coherence ultimately in society. There has to be a way where we can get things towards like giving people access to ownership of assets, ownership of real assets that have long term value for them, or the accessibility of these real assets. Rationalization, tokenization, digitization are big trends that will help in that way. That also comes with regulation.

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It comes with a lot of due diligence. It comes with people understanding what they're buying. There's a lot to be worked out there, but that's something I'm very passionate about and I’m very hopeful about. It's the major challenge, I think.

Yes, it's a very interesting observation as well, especially the ownership both of your own data, but also what you own physically with the data. Probably a consequence of you having free Google or free Facebook, where you end up being the product. And at the same time, maybe differently on the ownership side, it's difficult for a lot of new generations to actually own physical assets.

Yes, it's like things have just been turned sort of inside out in some ways. And it's happened, I guess, for good reasons and bad reasons. We probably don't have enough time to get into why that is here today. Having ways of solving that and having a path to solving that as an industry, I think is super important. And there are businesses, you see that are trying to do that. There are certain mortgage companies that are much more focused on giving long term fix, long term stability to their customers. You see companies actively trying to promote alternative underwriting strategies for borrowers who are sort of out of the ordinary compared to who they normally lend to, et cetera, et cetera. And there's hope, but it's so off the beaten track now.

It's a big challenge when you sort of have a more complex risk model to allow those sort of more at risk or sort of more atypical sort of groups.

Absolutely. And I think, again, this gets back to data quality. It gets to kind of having great kind of control over the algorithms you run over them and how you design what you do with the data and design the data itself and the validation of the data and so forth. It's such a key component to the whole thing. It's probably why they say it's the new world.

Finally, with your unique vantage point of having seen fintech evolution across multiple cycles now, what advice do you have for founders just setting out to build new companies today?

I would say two things. I would just say it's going to be way harder than you expect and just be ready for that. But I would also say, hold on to your dreams patiently. And if it doesn't work first time around or second time around or whatever, it's entirely possible for it to happen. Luck and timing have as much to do with it as execution and so forth. But patience is a key component. Resilience.

Wonderful perspectives as always Ammar! Really appreciate you taking the time to share your insights on Luna and the broader fintech ecosystem.

Of course, I enjoyed the conversation, thanks for having me!

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