We called up the CEO of blockchain company Clear, Eran Haggiag, at his office in Tel Aviv, from London yesterday. The call, said Haggiag, likely traveled through several different telecommunications providers, perhaps passing through those in France, Italy, and Turkey on the way, each of whom are paid by the British telecom provider to send the call through to Israel.
It might sound simple enough, but according to Haggiag, the trouble starts when the telcos settle the bill at the end of each month. If, say, the Italian telco has a different version of the costs accrued than the French one, that triggers an arduous, line-by-line comparison of the invoice to resolve the matter.
Hundreds of billions of dollars a year are wasted on this sort of stuff—the process is called “reconciliation.” Haggiag’s company, Clear, wants a crack at solving this mess through blockchain. And to do it, it just raised $13 million in a Series A round led by the investment arm of Fidelity, and followed by telecom giants such as Deutsche Telekom and Telefonica.
🎉We are thrilled to announce Clear's $13M in Series A funding. Thanks to our incredible investors, customers, partners, and a fantastic team! 🥳 @glhberg @EranHaggiag1 https://t.co/4VSHCPBpxG
— Clear (@ClearBlockchain) February 5, 2020
“We automate all these processes by keeping the version of the contract on the blockchain,” he said. “It avoids [conflicts] in the first instance, because both parties agreed on the same version of the data.”
“There is no more one side having their version, and the other side having their version, but it's both of them looking at the same source of truth,” Haggiag explained.
The world’s major telcos are interested. Since Clear opened doors in 2018, it’s already completed proof of concepts with BT, Orange, Telestra, Deutsche Telekom, and Vodafone.
Much of the money raised will go toward making the software “production-grade ready,” within the next four months, said Haggaig, but he wants to use some of the money to expand the company into new territory.
“Everything around B2B payments is a huge problem and it costs the world hundreds of billions of dollars every year,” he said. A study by Mckinsey found that $140 billion in bank payment fees were shelled out every year. A report by Juniper Research last year valued the entire B2B money transfer industry at $150 trillion.
Haggiag used to run an advertising tech company, and he thinks there’s much room for improvement in the industry—advertisements are often played thousands of times, and working out who’s owed what can be tricky. Other suitable industries include content-rights management, healthcare, and energy.
In those industries, Clear would have to face off mounting competition. Ed Sheeran’s old record label, Ditto, recently launched Bluebox, a blockchain platform which helps artists collect royalties whenever someone plays their music. Instamed is working on a similar system for the healthcare industry, and a large Russian energy grid company has already automated electricity metering on a blockchain.
Luckily, in a $150 trillion industry, there’s probably enough business to go around.