He wants to make joint ventures painless – by putting them on the blockchain

Image credit: Varun Mayya

Blockchain companies have been ramping up their game to solve real problems. Just this year, Sierra Leone held an election with citizens voting via a blockchain. Now, a startup in India called Enkidu hopes to make setting up joint ventures, which could easily cost thousands of dollars, a lot easier.

Varun Mayya, one of the founders of Enkidu, also owns Avalon Labs, a company that seeks out entrepreneurs for cross-border partnerships. The company owns multiple joint ventures across India, Singapore, Bahrain, and the US.

Mayya’s career started in 2009 when he learned coding and began designing websites as a freelancer. By his third year in college, he was paid US$100 per hour. At the age of 20, he started his first company, an online job portal which he built from scratch. After two years, he sold the company and founded Avalon Labs at the age of 24.

Due to Mayya’s early entrance into the internet business, his vast network of clients gave Avalon Labs a steady head start. “We eventually accumulated enough money to start placing bets with [a variety of] joint ventures across the globe,” he said.

Over time, the growing number of joint ventures they owned in different locations became a problem, according to the now 25-year-old business owner. Each one required them to register a new company in a jurisdiction that suited both parties, and different laws govern different states.

“We had to find a lawyer and an accounting consultant, and it became difficult to track the expenses, revenue, and shareholding tables of these different companies. So we figured we’d build a solution to our own problems,” Mayya tells Tech in Asia.

With the help of another partner at Avalon Labs, his team created Enkidu.

Making joint ventures more affordable

The chief promise of Enkidu is the reduction of inconvenience and cost for every new joint venture. They achieve this with an Ethereum feature called smart contracts, which automatically performs actions when predefined conditions are fulfilled by parties to the agreement. According to research Accenture published in 2017, investment banks could save around US$12 billion annually if they replace current systems with blockchain and smart contracts.

For smaller joint ventures, the cost of hiring lawyers and accountants may cripple their finances, says Mayya. According to his experience at Avalon Labs, business setup cost can vary from US$500 to US$5,000. They also need to shell out at least US$2,000 to hire a lawyer. “These expenses are unnecessary for a small two to three-man operation,” he adds.

In addition to the cost, traditional joint ventures require one party to physically transfer revenue to the shareholders.

Smart contracts can avoid those costs and, according to proponents of blockchain technology, provide ironclad security for all parties. “If every operation of the company — whether it’s payments or decision-making — was made digital, then you can erase the legal system,” says Mayya.

However, the so-called ironclad security promised by the blockchain is not short of critics either. Because the technology is so new, researchers warn that there may be many hidden vulnerabilities yet to be plugged. In 2016, a hacker siphoned US$50 million from the Decentralized Autonomous Organisation based on the Ethereum blockchain.

How a blockchain-based joint venture works