ICO Analysis: LALA World
Although greater progress has been made toward expanding financial inclusion, the majority of the world’s population still lacks access to a bank account. According to the World Bank, roughly 51% of the world’s adult population had no bank account in 2014. That’s down significantly from 62% in 2011, but still leaves 2 billion adults with no access to financial products and services.
Unbanked populations represent one of the biggest opportunities for financial institutions. The growth and widespread adoption of mobile devices has opened many doors for financial inclusion. Large swathes of the unbanked and underbanked want to achieve financial inclusion, but only if it makes sense for them. According to Accenture, there are three value propositions these populations need to enter institutional finance:
- Easy access: alternative distribution methods to physical banking infrastructure will go a long way to attracting the unbanked. That’s where mobile comes in.
- The right products: Financial products and services must be designed specifically to cater to the needs of emerging markets.
- Attractive to use: Services must address the dormant tendencies of low-income consumers.
It is against this backdrop that we evaluate LALA World, the blockchain company that seeks to use innovative technology to help unbanked populations achieve financial inclusion. The company has identified this as a $380 billion opportunity by the year 2020, so there’s plenty on the line.
To achieve its goals, LALA is developing an ecosystem centered on the following concepts:
- No regulation
- Instant settlement
- No branches
- Digital payments
- Low costs and fees
When we evaluation these markers against the points set out by Accenture, we see a lot of promise. The company’s whitepaper lays out this ecosystem using the following diagram:
When it comes to the unbanked, much of the solution that LALA is offering will be based on the forthcoming wallet service, which includes money transfer, crypto and fiat exchange, bill payment and lending services.
The company is launching an Ethereum-based token that will be the catalyst for the entire LALA ecosystem, which is itself backed by the LALA wallet platform. This single interface aims to connect the unbanked population with several development initiatives that extend far beyond the financial system. This includes employment, digital identification, government partnerships and health.
This concept is further elaborated in the whitepaper:
“LALA World (“LALA”) is a wholesome ecosystem for the unbanked, starting with the migrants and their families back home. The ecosystem not only revolves around financial inclusion, but also bringing together communities at grassroots level, solving real life issues faced by this population and using the most advanced technology to bring everyone together.”
Although the company is leaning heavily on the ERC20 protocol, it is also looking at ERC223 and may one day launch its own blockchain. No definitive steps have been laid out in the whitepaper.
Purchasers of the first 125 million LALA tokens are eligible to receive a loyalty bonus on their initial investment. This bonus is as high as 25% for the first 25 million tokens.
LALA’s team is headed by founder Sankalp Shangari, an ex-banker who has had stops at Deutsche Bank and J.P. Morgan Chase. He appears to have a solid track record dealing with government, banks and other financial institutions. This sort of preparation is needed for a project of this nature.
Shangari has four other core team members spanning revenue, technical, partnership and AVP technology domains. The advisory team is even bigger, and consists of blockchain experts from around the world. This may offset the lack of demonstrable blockchain experience at the main organizational level.
LALA is a highly ambitious project that seeks to go beyond bringing the unbanked online. It aims to revolutionize the way people, businesses and entrepreneurs transact, make payments and borrow money. The ICO has a solid profile, but may run into implementation risks as the size and scope of the project expands.
- Naturally, one of the biggest risks for this project is competition from the major financial institutions. Big banks have been eyeing the unbanked for quite some time, and are beginning to mobilize efforts to serve this massive market. This partly explains the huge uptake in bank enrollments in emerging markets in recent years. Investors are reminded that, although the unbanked population is huge, it has declined significantly as a percentage. That being said, big banks may be challenged servicing the poor given the undocumented nature of these populations. Although many banks are making inroads into blockchain, they still lag considerably behind in implementation. -2
- For a project of this magnitude, implementation is a huge undertaking. LALA is pretty much looking to transform emerging markets with its platform. With a highly ambitious roadmap in place, investors need to consider implementation challenges building a platform that meets its lofty objectives. -2
- Although the core team is solid, we would have liked to see more blockchain experience at the top. This isn’t a huge risk given the blockchain expertise retained in the advisory role. That being said, this takes away slightly from the overall score. -0.5
- The company has a clear roadmap for implementation, including the launch of LALA 1.0 in April 2018. This will form the basis of the token’s mass adoption. The platform will be launched in ten countries initially. +3
- LALA already boasts strong partnerships with government, industry and community organizations, putting it one step closer to implementing its vision. +3
- LALA is offering an entire ecosystem of financial products and services. The more we look at it, the more it seems like an identity verification system for people in emerging markets. Each of the seven products outlined in the whitepaper has a clear business model with a definitive revenue stream. In other words, you know exactly how this company intends to generate revenue. +4
- In addition to early participation incentives, the ICO seeks to add value for long-term investors. Rewards, discounts, referral programs and voting rights are all part of the LALA investment opportunity. +2
When it comes to ICOs, LALA World is as solid as they come. A clearly defined business strategy aimed at a good cause should generate plenty of interest once the ICO launches in the new year. The author feels that a score of 7.5 out of 10 is warranted. This figure could easily rise should LALA convince local populations to adopt its services.
To be perfectly frank, there is nothing wrong with the token raise – it merely has a big vision that will take a lot of work to actualize. It also faces stiff competition from traditional finance.
- Type: Crowdsale
- Symbol: LALA
- Token Sale: Jan. 5, 2018 – Feb. 5, 2018
- Platform: Ethereum
- Total Amount to Sell: 150,000 ETH worth of LALA
- Payment Types: ETH, BTC, LTC
*12/27/2017: Our review of LALA World has been updated to reflect the advisory team’s blockchain qualifications as well as the challenges traditional financial institutions face servicing the poor. As a result, the original score of 6.5 has been upgraded to 7.5.
Featured image courtesy of Shutterstock.