Ex-investment banking MD launched a fintech startup using blockchain to finance solar power
This time last year Larry Temlock was a managing director at Daiwa Capital Markets' DCM team in Hong Kong. In May 2016, having spent much of his banking career in Asia, he returned home to New York to get a new solar panel business off the ground...in South Africa.
This might seem like a major career shift, but central to Temlock's new firm – The Sun Exchange an online “crowd-sale” marketplace for financing solar projects in developing countries – is using one of the hottest technologies in financial services, blockchain.
“The Sun Exchange uses new computer technology, blockchain and the Internet of Things in particular, in connection with older technology, including solar panels and smart meters that broadcast data about how the panels are performing, that is, how much energy they are producing,” Temlock says. “The goal is to make the participation in these processes, the collection and distribution of rental income to the people who participated in the funding, an automated, real-time experience."
Temlock is CFO at the company and works alongside the founder and CEO, Abe Cambridge, who has a more traditional solar energy background.
“Other benefits of using blockchain: It’s a distributed ledger technology, so everybody shares a database, and transactions are impossible to hack or compromise,” he said. “It’s a great way to disclose financial or operational information in a trustworthy manner," adds Temlock.
Temlock's banking career came unstuck through a combination of professional and personal problems in 2016. Last year, Daiwa dismantled its entire DCM business in Hong Kong, issuing layoffs left and right, and Temlock’s father was diagnosed with cancer. He knew it was time to come home to New York.
Temlock, who has also worked for ANZ in Hong Kong as well as UBS and J.P. Morgan in Tokyo, decided to team up with Cambridge on The Sun Exchange, rather than join another bank. But, he says, his banking background has helped get the business off the ground.
“I’m finding that putting together these solar deals, a lot of my deal experience from working at banks is coming to bear, talking with lawyers – what do the investors want, what is my audience for these solar products, how do we make this buying process attractive, what are the risk/reward factors? – all that is useful,” he said. “Some of the quant modeling is also very helpful, modeling how we expect the solar panels to perform over 20 years, and how much cash flow we expect them to generate.”
A start-up is always in fundraising mode, so part of Temlock’s mandate is salesmanship, talking to professional institutional investors and getting people to invest in the company. So far, The Sun Exchange has attracted pre-seed angel funding from high-net-worth individual and Boost VC.
“It’s the same competitive arena as banking, but instead of bonds, I’m talking about convertible notes, vesting share and new vehicles and tools,” Temlock said. “As with banking, I’m speaking to investors, getting their confidence and answering their questions accurately.”
Image courtesy of The Sun Exchange