Blockchain and Crypto, Business of Fintech

‘Like Plaid for blockchain’: cmorq provides auditable-quality blockchain data


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‘Like Plaid for blockchain’: cmorq provides auditable-quality blockchain data

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: 2018
Who it’s built for:
Asset managers, accounting firms, crypto investors that require clean blockchain data for audits, portfolio management, and investment strategies

cmorq's cofounders

Genesis Story: Founders Hossein Azari and Dana Panzer met while at the Columbia School of Business MBA program. Hossein, a Harvard PhD in computer science, was most recently chief scientist at Clarity Money, a personal finance manager acquired by Goldman Sachs in 2018. Dana has experience in business and product development for startups and considerable expertise navigating the operations of complex healthcare systems.

Both began looking into the blockchain space. Specifically, they were looking for an idea that was commercially viable and at same time, solves a problem for a painpoint in the growth of blockchain and cryptocurrency.

Given their backgrounds, they looked at a lot of the infrastructure needed for institutions to enter the market. The cofounders realized that there were more fundamental problems to work on first. There isn't a reliable source of blockchain data — the data is distributed, fragmented and requires verification. Without reliable data, they thought, it's very hard for large institutions to enter the market.

Starting in October 2018, the duo began development of the cmorq platform and launched an MVP in January 2019. Along the way, they've worked with a handful of early customers -- audit firms, KYC, analytics — all firms that need access to clean transactional blockchain data.

The Big Idea: There's no easy way to access blockchain data in standardized form across a broad range of assets. cmorq organizes blockchain data accurately at scale. It's the only firm of its type that's SOC 2 Type 1 certified which means its data processes are accurate, consistent and secure.

Before cmorq, firms that needed to get at clean transactional data had a couple of choices -- neither great. They could set up and manage their own nodes for every blockchain they need data from. That would provide a source of the data -- the cleaning and scrubbing they would need to handle themselves. The other option is to use on chain explorers -- small programs that could look up data for a certain address. While most blockchains typically have at least one on chain explorer, they're typically built by a single person or the foundation, they're not always reliable and don't provide seamless access to the database.

cmorq provides a comprehensive backend so companies don't need to spend resources to obtain and analyze blockchain data.

"A good analogy for what we do comes from my experience at Clarity Money," said Azari, who serves as cmorq's CEO. "We were seeing companies like Plaid and Quovo — which handled the process of connecting to consumer accounts and pulling transaction data from multiple sources. They made it easy for every fintech app to do that. They enabled the space to grow."

"We want to enable our space to grow and for companies to build apps that require on chain data."

In terms of the revenue model, cmorq charges a subscription per blockchain, by the complexity of the problem it solves. Pricing is a la carte — Azari says they don't construct contracts that require signing up for 50 or 100 assets. Customers can pick and choose what they want.

Growth Plans: cmorq has raised a pre-seed round, bootstrapping as much as possible, bringing in revenue and be looking to raise as customer traction continues to improve.

The company has identified a variety of use cases and customer targets. Auditors of asset managers need to verify transactions and holdings across assets. Often, hedge funds manage lots of addresses of their crypto holdings. Auditors have to track down these holdings oftentimes manually or with on chain explorers. "This would take days, weeks, even months doing it manually," Panzer said. "That's a huge time delay for customer deliverables. These auditors are not technical. It's a mismatch and a huge upfront cost. Compliance is very important for them."

Analytics companies need to ensure that their inputs -- data -- are clean and easy to access. Custodians of large asset managers need to provide validated holdings information. Exchanges and governments need access to this data. The company believes that traders and hedge funds, once they trust the underlying data, will use cmorq to create trading strategies.

Azari sees future growth in the gaming industry, where platforms use non-fungible in-game assets and can transfer them to other games. "You will be able to buy a jacket in one game and move it to another game," he said. "As non financial applications grow, there will be more marketing uses of data. If you have a lot of on-chain data of people buying jackets in a certain game, marketers can decide what to focus on, personalize marketing campaigns, and target products."

cmorq claims it saw more traction and excitement in the space than it expected when it launched. The rest of 2019 will be focused on growing with their customers and the pipeline the firm is building.

The company also plans to raise money after seeing a good three months of rising MRR. With some capital in the bank, the cofounders plan on expanding the commercial and engineering teams.

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