Unstable
Made mostly as an excuse for me to chat with people I like about internet money(stablecoins), credit, fintech and anything at all!
Unstable
Building the first tokenized space fund with Waj from Starcap
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StarCap wants to bring private space investments onchain.
I sat down with Wajahat Mughal, co-founder of StarCap
He breaks down StarCap’s investment thesis across orbital data centers, space-based energy, and microgravity manufacturing. And why he believes falling launch costs could unlock a new generation of businesses.
Timestamps:
00:00 — Introduction: meet Waj, co-founder of StarCap
03:25 — StarCap’s origins: from tokenized equities to space investing
07:23 — Why StarCap is starting with a tokenized fund
09:56 — Are crypto investors ready for private-market exposure?
14:19 — Opening access to companies before they go public
19:56 — Why StarCap believes space is at an inflection point
22:21 — Three investment pillars: compute, energy, and manufacturing
23:05 — The case for orbital data centers
25:00 — Target companies, funding stages, and valuations
27:37 — How StarCap plans to access competitive investment rounds
28:39 — Financing space companies through onchain credit
29:28 — Supporting portfolio companies with research and media
32:51 — StarCap’s growth strategy and investor education
36:32 — Private fundraising and plans for a public phase
38:39 — StarCap’s roadmap: growing AUM and expanding its products
41:17 — The future of sector-specific tokenized funds
43:42 — Building StarCap’s brand for a crypto audience
45:47 — Space companies and other investments on Waj’s watchlist
51:06 — China’s space industry and StarCap’s global investment scope
53:14 — Navigating regulation and national security constraints
Hello, what's up everyone? Welcome to the un Unstable Pod and today I have a very, very special guest that I was personally dying to to chat with and to see what what he's building. Waj.
SPEAKER_02Hey guys, thanks for having me. I've been uh watching the the last few episodes and I've really enjoyed them. So uh yeah, looking forward to chat uh all things, I guess tokenization, credit, and more, I guess.
SPEAKER_01Just everything, really, yeah. Uh thank you for the for the kind words. I think to start maybe Waj, could you give like a couple of sentences about yourself, your background, and um and what you have been building in in the past?
SPEAKER_02Yeah, yeah, absolutely. So my background is in medicine. So uh I previously was a medical doctor, worked in a busy unit just near where I live at the moment. But uh I think it kind of my journey in terms of like where we are today really comes from when I was at medical school. Definitely got really involved in the crypto scene as well back then, especially as DeFi was coming up. I was particularly interested in derivatives and I had an interest in option markets as well. And so uh after I graduated, I worked as a doctor. But uh when it came to finishing my shift, I used to run home, jump on my computer, and straight away it was, you know, what kind of yields are we looking at today, or what am I trading today? So yeah, that was a kind of degen life that I had for a long time. I started contributing at an option market, uh, and then we created one as well. It was called IVX. Uh we focused on zero-day options, and I think that's when I actually met you for the first time as well. And over the years, we basically iterated and kind of built other fintech products as well, uh, focusing on a range of different things like uh derivatives, as I just mentioned, but also tokenized equities, credit markets, and a few other things as well. So yeah, we've been on this long cycle for the last couple of years or a lot more than that now, trying to iterate and find PMF and build uh like interesting novel products. And I think the the current version that we're on is probably the one that's closest to it. So uh yeah, no, we've had a good run. Right. And uh yeah, that's a little bit about just some of the stuff I've been up to.
SPEAKER_01Yeah. I sure would life to learn like what have you learned from building in crypto? Like, what do you think really separates someone who's a first-time builder and someone who's like a serial builder?
SPEAKER_02Uh I think like there's a lot of a lot of things in that we could probably do a whole podcast on that alone. That is true. But yeah, but I think like when you like it's just uh experience, you know, there are so many things when it comes to building a product or a business that like you you you do for the first time and you don't know how to navigate properly, you don't know who to speak to, you don't know what the best uh way around it is. And I'm sure like you you know this, and many of the listeners know this as well, where like as an entrepreneur, you just come up with like there are problems to solve every single day, right? Um, so it's just about like how good you are at like being able to solve those problems, and obviously the more problems you encounter, like the better you're just gonna be at them. So I think it's just a case of experience uh in most cases, which like makes things so much more faster. I thought I also think like sometimes as a first-time builder, you maybe have like the wrong idea of like what the goal should be. Sometimes, you know, I've seen cases where people are focusing too much on product or not enough on product, focusing more on like you know, getting eyes on the product, and like you know, that necessarily isn't what the end goal here is. Um and so yeah, I think it's just mostly just a case of experience.
SPEAKER_01Got it, got it. Yeah, I would love to have a brief kind of one-liner on on Star Cap, like what's the best way to pitch Star Cap to someone who's uh who's maybe like Deboon in crypto but hasn't like yet ex um ex exposed him himself to like crazy amounts of DeFi uh or anything like that.
SPEAKER_02Yeah, I think I'll talk about a little bit of a story on terms of like how we even got to StarCap and kind of like help to understand like the the product as well. So the the last product that I was building was called Spreads Finance, and uh it was an ecosystem of tokenized equities where you could not only buy and sell them, it was built on top of X stocks, but also we had created a bunch of different subproducts as well, things like um to uh tokenized indexes, like you could be able to trade Nancy Pelosi or Inverse Jim Kramer, etc. But also then we created what we felt was ri kind of the next step on from that, which was like a credit market, essentially, being able to borrow against your assets, especially stocks and then indexes and whatnot. So that's kind of what we started off with. And and you know, we were thinking more on the lines of like people will want this for leverage, uh, it's a much cheaper product than than a perp, anyway. But I think ultimately what we realized was that without being the asset issuer yourself, like your moat is very limited. And we noticed this like not long after when we started, we saw the the first comings of Euler and Morpho and some of these other guys kind of launched similar kind of assets. And so the the moat necessarily is in the in in your ability to bring capital and liquidity, it's not necessarily uh like the the instruments that you're listing. And so we were thinking about like so we went back to our users and kind of asked them about some of the stuff that they wanted to see more, and they mentioned, you know, a lot of since we were in credit markets as well, they'll they mentioned some of the other kind of credit stable coins that we see today, things like 3J and things like USD AI. So we thought perhaps there's an avenue where we can leverage our background and our experience in previous lives as well to like leverage this a little bit. Uh so we looked at like the medical field a lot. We looked at hospitals and especially in the emerging market where you know, you know, you need uh an MRI machine or you need a lot of expensive tech and gear. You know, how do these hospitals afford it? Well, it's obviously through credit of some sort. And so but we thought that you know stable coins would be a really interesting way of being able to finance this stuff, especially in some of these countries too. Um so we looked at that, it was kind of interesting, but we we explored a few different sectors in parallel. Um and we stumbled across the space sector as something really interesting, particularly because of a couple of things. It's it's at an inflection point right now, which we'll come on to in a bit, but also it's a very capital intensive industry. The capex is extremely high. And so when speaking to a few different founders, they all loved the idea of non-dilutive credit. They wanted it straight away. Uh, and so we thought about how we could create a similar kind of instrument where we'd have, let's say, USDC lenders on-chain, uh, the space companies perhaps borrowing, and we can package this up into a tokenized instrument, perhaps a stablecoin, or a credit instrument. We were deciding between the two. Of course, you know this as well that if you want a credit instrument like this, you need to have really good collateral, you need to have government contracts, all of that sort of stuff. And so, kind of companies that we're looking at at the moment are some of the best and biggest space companies around, the Series A, B, C, D companies. And these are some incredible companies too. So when we brought them back to our LPs, they were like, Watch, you know, 15% APR is nice, but this company is gonna double in the next year. Like, if you know the founders, we need to get equity in this company. And so that kind of paved the way to where we are today, which is with Starcup. We're looking at kind of investing in equity first into some of these uh leading space companies, and we want to tokenize the exposure there. But Star Cup really is gonna be not just that, it's going to be an entire product suite or of financial products focused on the space sector.
SPEAKER_01Um, also basically right now, Starcup is a it's a tokenized fund. Why did you specifically decide to have a tokenized fund? I think there's only maybe like two um publicly traded closed-end funds on Nasdaq. I think one of them uh is like something starts with a uh with the D, and the other is of course uh Robot Strategy. And what's interesting about Robot Strategy is that they said it's a team full of ex-crypto people, but they specifically decided to go like on list on Nasdaq first. So, kind of in your experience, like how does your crypto background help you like while you know building StarCap? And and why specifically Starlight with the tokenized part?
SPEAKER_02Yeah, so like when we were thinking about it, like RoboStrategy was a big inspirational kind of point for us, and we found that they have done a fantastic job. So a lot of credit needs to go to them. I think you know what Andrew Kang has been able to achieve there is like pretty remarkable. But you know, you have to remember that he started investing in robotics in 2023, and and over the years, as he grew his portfolio, of course, with mechanism capital as well, then kind of in parallel, uh kind of setting up the the Nasdaq listing is something that uh I don't think many people can achieve. And I'd like to think that for us as well, like a Nasdaq listing or something similar, perhaps uh another kind of TranFi stock market exchange listing would be uh fantastic and it's part of our roadmap. But I think for us initially setting up, probably a little bit difficult to achieve. It takes probably around 12 months, probably even 18 months to kind of get this process done. That's aside from the kind of seven-figure costs as well that you have associated with it. So I think uh like great for Andrew Kang. Like, I think that it's one of the best ways to do it. But actually, what I find interesting is that you know, on some days, uh, you know, RoboStrategy, the tokenized version has done more volume on Solana than on the Nasdaq itself. So Solana have posted this on their Twitter page quite a few times. Um so I I think it just goes to show like you know on-chain markets still have like uh you know a lot of pull to them, and we're seeing this with like the growth of tokenized equities, and the chart is just literally up only at the moment in terms of AUM and volumes, and now we've got Robin Heard chain, and you know, we've got a uh you know a lot of competition which is driving a lot of innovation, which I think is great. So yeah, I think uh for us as well, I think it it is great to kind of go for a longer term exchange listing. It brings credibility, it brings you know a lot of value, you know, outside of just pure volume, right? Uh but uh yeah, I think it's just something that we're gonna work towards uh over time.
SPEAKER_01And do you think that the crypto audience is ready for such for such a product? I think I think like personally, uh it's very, very right to have a tokenized fund because like initially people were optimistic about crypto and like about purbs because you could have you know five, ten, twenty Xs with a relatively like safe profile, I would say, because in like the previous cycle all of the coins were still like valued quite low, but now perps have kind of failed us, I would say, and then the memes have uh have come. But I think the retail quickly learned that like it's it's close to impossible to make money on on memes, especially now. And it's very like a predatory landscape, I would say. Do you think like that now is kind of the the perfect time to have a tokenized fund? And like the pro other crypto audience is starting to kind of look for alternative ways of like making you know a relatively safe five to ten access or or or potentially more?
SPEAKER_02Yeah, like like you know this as well. Like crypto's been through a rough time, especially if you look at like altcoin and meme point markets as well, although they have their ups and downs, don't they? And we've kind of gone through this kind of experience, and now we're like in this revenue meta, which uh yeah, I think really we have 10, 20 like assets that are actually investable, and the rest are you know practically uninvestable. Uh and so I think we've seen like the the psychology of the crypto investor change a lot, especially in the last year or so when we've been able to see tokenized equities from a perp and spot perspective grow rapidly. Like hyperliquids volumes tell you a lot of this story as well, and the same with a lot of the other perp markets as well. So I think yeah, we we've come to we've come around a lot and and now there's much, much more openness to to these asset classes, which perhaps maybe last cycle or the cycle before, like we never even think about the idea of investing in equities. Like people didn't necessarily want it, and that was because we had a good enough market for speculation. But that time has changed, and like you know this as well. Like, I'm curious, like what what kind of stuff you're actually trading or buying on-chain today. But for me as well, it is a lot more equity stuff right rather than like your your typical altcoins. Uh and so yeah, I think the the psychology of the crypto investor has changed. We're we're we're we're kind of open to a lot more of these RWAs as well, both from a speculative perspective and also from like a non-speculative perspective as well. When you look at like how some of these credit like stable coins have grown and some of these other like RWA assets have grown so drastically. So, yeah.
SPEAKER_01Yeah, well, for me personally, I think I'm only doing like stocks and commodities. So like oil, gold, that's like the the boring mix, I would say. Okay, but you're doing it on-chain, which is the interesting part. Of course, of course. I think for like to be honest, for anyone wouldn't like for anyone, like with a like non-EU, non-US passport, it's almost impossible to trade equities like off-chain. Even if you're from like Korea, from Singapore, I think it's still quite quite hard on the like there's like a lot of lot of friction. I mean, and even with an EU passport, it's just so much easier to trade equities on chain because not taking into account like how maybe like bad the Munpay experience is, like, still it's not too hard to get your fiat into crypto, and then you just like install one app and you can like you can use base, you can you can use um even the CX, and like with like two clicks you can buy whatever equity you want.
SPEAKER_02This is the beauty of crypto, like like you know, this is what crypto really stands for as well. Like, you know, when Bitcoin first came out, it was meant to be like this kind of hedge against like you know, TradFi or Fiat, etc. This kind of open access, you know, it doesn't matter where you are in the world, you can be in Antarctica, you can be in South America, you can be in Europe, it doesn't matter where you are, but like you every everyone is the same and everyone's equal, and like there's an equal opportunity. And uh like that's one of the things that really drew me to to to like this sector as well, where like I I I really believe in equal opportunity and equal access. And I think that's also why I think tokenization is so great as well, because you know, a lot of these things are gated away, you know, it gated away for institutions, gates gated away for you know accredited or qualified purchasers. And um, you know, that at times there's reasons for it, but in general, you know, like if someone wants to buy the S ⁇ P 500, um, you know, I think it doesn't matter where you are in the world, really, you know, you should be able to access it.
SPEAKER_01Yeah, I would say especially tokenized and private fund is is like one of the best usage use cases of crypto have seen so far. Because like I've I have like so many like personal um stories of like my friends, like for example, my mom's friend, which she's uh in her 40s and she she like lives in in the U. And she spent like a couple of like random buying Tesla stocks. Well, you know, if she had the opportunity to like let's say invest in a basket of private companies, she would have probably like way better like RR than she would have like investing in in Tesla. I think the only kind of downside is that she'll she would be locked out for some period of time, but then if it's like a tokenized, like a publicly traded fund, like there is none of that downside either. Yeah.
SPEAKER_02So that's it's just pretty cool. No, no, exactly. I think private markets are where a lot of the alpha is. You know, there's this trend that's been going on that I think many of the viewers here will also be aware of, which is that companies are staying private for longer than ever before. They don't have an incentive to to go and IPO. You know, usually in in the past, you know, a company would IPO because they needed to raise some capital or they needed some there's some capital kind of question there. But uh but now, you know, companies can just raise another round. There's so much there's so much capital around the world that like you know everyone is like ready to just raise another round. And that's why we've seen you know the likes of OpenAI and Anthropic, you know, they're the trillion dollar companies, they're literally top 10 most valuable companies in the world, but they're private. And and of course we saw this with SpaceX just a couple of months ago, where you know it IPO'd at you know almost $2 trillion. Um, you know, companies are staying private for longer than ever before. And I think you can see this uh numerically as well. If you look at the number of traded, publicly traded companies in the US from 20 years ago to today, it's about 40% less. Yeah. And so, yeah, it's uh it it it's really what this means is that you know, even if you're buying something like the S ⁇ P 500, you're not really buying the top 500 American companies. You're buying only the ones that are public. You know, a lot of them are not public. And and so there's an arbitrage there where if you're able to get access to some of these companies, you know, you're able to ride a lot of the a lot of this uh asymmetrical upside, which is often captured by these early VCs and and and obviously the founding teams and and whoever can get essentially get into those rounds. And so, yeah, this is a trend that's been happening for quite a few years, if not longer now. You know, if we list like some of the biggest private companies, you know, uh we have Anthropic, OpenAI, you have Stripe for Payments, you have Tether, you have Discord, you have uh, you know, TikTok, you know, byte. Databricks as well.
SPEAKER_01There's like everything in like every category, yeah.
SPEAKER_02Yeah, every category, literally, every category. You know, but all of these are forget about being unicorn. They're like multi- multi, multi-unicorn, if not like you know, 10 billion, 50 billion, 100 billion dollar valuation. So yeah, getting in is like the the problem here. Um and I think like that's as I mentioned, like crypto for me, a lot of it is about access. And I think like we can marry the two together.
SPEAKER_01I want to ask kind of a philosophical question, I would say. So you said crypto is about access, and before we have also kind of tried to solve access but in a different way, if you remember like sort of believe app, I mean even Metadao, like instead of us, I guess, well, the tokenized fund approach, how I see it as us coming to meet companies where they are and just like invest in in with an instrument that they are comfortable with. But then the MetaDAO, Believe App, um, and like all of the other like launch pads approaches for you to be able to have the companies live on-chain and have the company be kind of public 24-7. So what do you like how do you compare it to you? And like, you know, do you think they will like they will um exist in the in the future or like like what is your um opinion on on this trend?
SPEAKER_02Yeah, I think like uh like future archy and like the the system that like Metadow, for example, have is really about uh you know solving the problem, not necessarily for like you know, a lot of these private companies, because I don't think they I don't think for the private companies this is their problem. Uh they they want to be private. Uh it's like for their benefit. They don't have to report uh every quarter, they don't have to be as public, they can just keep working on what they're working on and carry on. But I think like like Metadell, for example, really solving this problem of like, you know, altcoins like not really being equity and like they're not really offering you anything in, you know, we've seen like what essentially what the market has told us with those assets. So at least like here, like the you know, the token holders like finally have something that represents something a little bit more like equity. And so you have rights, and so you have like, you know, you can actually have a say. I think, yeah, it's great. I'd like to see more of it, and I think we are probably gonna see, especially because MetaDAO has become such an incredible way of like aligning a community, capital formation, you know, setting everything up properly, and like the token holders like really having a proper say and the platform is getting better and better. I think like we will see a lot more experimentations like tokenized funds and maybe credit markets and all kinds of other things like go towards that route as well.
SPEAKER_01Do you think we'll see like a unicorn that is fully like incubated, I would say, by Metadow or by any other launch pad?
SPEAKER_02Yeah, that would be yeah, I why not? Why not? You know, you know, Unicorn is a billion dollars. Maybe like 10 years ago, 20 years ago, like that would be a little bit harder to say, but uh, I think like you know, companies are going to a billion just like that. So yeah, I think so. I think so.
SPEAKER_01Alright.
SPEAKER_02Might be Metadow themselves.
SPEAKER_01Actually, yeah, yeah, for sure. Yeah, cool. So moving kind of back to the StarCap uh topic, um, how do you guys value a a space company? Maybe you can kind of also go into like the different thesis, like different groups of companies that you guys have in the pipeline.
SPEAKER_02Yeah, so like with space, like we believe that there's this inflection point happening with the entire sector right now, and it's to do with being able to go into space. So the cost of launch, the cost of going into orbit has reduced drastically over the years. Um so in the 1960s it was around $150,000 per kilogram. Over the years, like it's come down like 20 years later, it was around 50 or 80,000, and it's come down and down and down as we've been able to innovate on launch, on propellant, on like like uh technology, structure, all of this sort of stuff. Um and and really one of the main drivers of reduct reducing this cost has been reuse reusability. Uh so being able to reuse the same stuff again, because previously uh when NASA used to like send rockets up, the rockets were a one-time thing. You'd use it once, it's bespoke, and that's it, you never use it again. The SpaceX have come, and now you know the same rocket can do multiple launches, one after the other after the other. And because of because of these improvements, we've been able to reduce the cost drastically. So it's a hundred X cheaper today than it was 60 years ago. Still a little bit too expensive, but they have a new rocket coming out called Starship. And Starship is reducing the cost from what it is today, another 7x. So wow. So the end goal is to be only $200 per kilogram. So in in in 60, 70 years, we've gone from $150,000 per kilogram to $200 per kilogram. And this is this is the inflection point. And this is like what we call, you know, the the beginning of the Chat GPT moment here. Where like, look, for a long time we've been able to go into orbit. We've been able to do a lot of this stuff. You know, NASA's shown this decades ago. But the economics never made sense. And now, like at $200 per kilogram, like finally the economics can make sense for the first time. That these businesses can operate and these businesses can do things in space and can make revenues and can really unlock the this kind of commercialization of space. And so that's really the core of this thesis here. And so the question is where does the value lie after that? Okay, fine, you go into space, but what are you supposed to do there? And and for us, we've kind of narrowed it down to three kind of core subsectors where we believe like a lot of the value, especially in the coming decade, is gonna lie. Uh the first is compute, and as I'm sure you know, like compute demand uh is up only and is only going to continue to increase as we use more and more AI. And so the main kind of category of things that we're looking at here are things like orbital data centers. Uh, second thing is energy and being able to use solar in ways that we've never been able to use before. And the third is manufacturing, uh, because in in the absence of gravity, you can build and create things that you could never ever build on earth, including drugs, including orbital, uh including wafers, silicon wafer chips, and much more. So for us, those are the kind of three categories and the infra that powers the three uh that we're kind of most interested in. I'm like happy to dive deeper into each of them.
SPEAKER_01Yeah, I would like to learn more about the first one. Like, why is it specifically cheaper to put data center in in in into space?
SPEAKER_02So it's not necessarily cheaper to put the data center in space, um, but I think what's more interesting is like the problems of data centers on Earth and how space can solve them. So if we look at like, you know, on Earth, you know, with a data center, you have you have to get the land first, you've got to get the permission, you've got to get the land. All right. And you gotta you've got to build this incredibly large thing on Earth, uh, which then needs a lot of power. And you know, data centers, if data centers as a whole were a country, they'd be in the top ten in terms of energy usage, right? So so that's like a another thing. Uh and the last being, you know, things related to some of the difficult difficulties that we have with data centers. For example, cooling, you know, the amount of water usage that's needed to help call these data centers is a lot. Uh and space can solve a lot of these problems. Well, uh, firstly, like there we we we don't have to worry about land in the same way in space, but also we have 24-7 energy coming from the sun. We have cooling like all around. So there are a bunch of different things there that can kind of help solve this problem a little bit. Uh and and I think that's also why you're seeing Elon Musk like you know talk about SpaceX going towards this direction, where yeah, where I think the the the end goal really here is to put a lot of the compute capacity in space. You have to obviously design things a little bit different. You need to have radiators that are, you know, radiation proof and you have other problems as well that you need to solve. But I think we're at the very beginnings of seeing this come to a reality. This isn't a sci-fi dream anymore. This is a reality. Uh and we've all we're already going to see like Nvidia H100s. Some have already been put into orbit already. I think next year we're gonna see a lot more of this happen as well. StarCloud are one of the companies that are like pioneering this, uh, alongside SpaceX, of course. And so yeah, I think uh it's a very exciting time.
SPEAKER_00Yeah.
SPEAKER_01On the companies then, like what stages do you guys mostly invest in, or what stages do you like investing in?
SPEAKER_02Yeah, so I guess like uh like as a VC, I think you can kind of pick two angles, right? You can either go for you can either use like your understanding and try to find like pre-seed or seed companies, early stage companies, and you know, you're you're essentially betting on them. Or I think now we're seeing like this kind of late stage VC kind of emerge as well where the the actual problem is access, right? Getting into the round. But like the the names are established, the names are well known. It's a it's a case of just being able to get in. For us, I think initially as well, and how we're looking at space, we're looking at kind of some of the more established companies, some of the companies that already have a big moat, and like really solving the access problem here. And so those include, you know, Series A, B, C, D, and beyond companies. Really, a lot of them might even be unicorn companies already. But, you know, if we look at like the valuations and compare them, because we think like space might be one of the next big trades after AI and energy, AI and robotics, sorry, then you know, the valuation gap is massive. And especially when you see like SpaceX now at you know one and a half to two trillion valuation, you know, a lot of these companies at one billion, two billion. I think there's a likelihood that they will probably get acquired if some of them will anyway. If not, then I think as long as these companies keep pushing and keep kind of working towards that goal, there will be a huge re-rating here. And it wouldn't surprise me if we see some of these companies at one billion go to five billion and then to ten billion, at which point you've already hit your 10x. And we and we believe like some of these are gonna drastically go up a lot more, especially when you look at like AI and robotic companies being valued at 30 billion, 40 billion, 50 billion, 100 billion. There's so many of them. Uh and if and and I think like if we're looking at the same kind of unlock and the same sort of revenue potential as well, especially with like a data center in space, uh, then I think uh yeah, the upside is your imagination.
SPEAKER_01Yeah, yeah. I would say that a couple of billion is very cheap for for space because I think space is way more capital intensive than like at least AI. I think robotics might be like a bit similar. Like in general, you know, flying like a rocket into space, like having like a data centering space seems like one of the most capital intensive things in like that that that that that can be. Yeah, done.
SPEAKER_02It really is, and I think like that's also what drew us to the sector originally, especially as we were looking at it from a credit perspective to begin with. You know, capital is needed, and so we have like demand side there. People need the money. It's just a case of like can you productize it and can you source that capital from from wherever and bring it to these people?
SPEAKER_01Mm-hmm. Right. Um, and like obviously you said that it's it's a competitive market to be able to get into like the best rounds. So, how is StarCap positioning itself to be able to get into primary rounds?
SPEAKER_02Yeah, no, this is this is like a great question, and I think uh we we we leverage it in a few different ways. So I think one thing that's great is like all of us in the team have like a slightly different background, but still all overlaps into space. So, for example, one of my co-founders has an astrophysics background, he's really into the data center side of things. One of my other co-founders has a space background, and so it like has a very deep understanding. I I have a medical background, and I think for me, one of the most interesting things for me is like the overlap of medicine and space, uh, particularly in like drug manufacturing and microgravity manufacturing, and and really focusing there. So I think that that's one thing that we kind of covered a little bit uh from our team. But um, in terms of like actual value aside of from the capital itself, there's a couple of things from a financial perspective. As I mentioned, like we want to be this entire stack that can that can help support these companies in other ways. So as I mentioned at the very beginning, like credit is another thing. And one of the things that we're thinking about is how once we invest in some of these companies, we can offer as a subproduct other avenues for these companies to get non-dilutive credit or non-dilutive capital in the form of credit through like a stablecoin product or use tokenized um debt product of some sort that we can like then you know use uh crypto uh use crypto rails to grow rapidly, whether that's through Morpho, Pendle, all of these kind of markets. And this can like help, you know, these companies, even if they get 10 million, 20 million, 50 million dollars, like that's great for them. And so we can use like their collateral, their government contracts and whatnot as as as the as the backing essentially for these loans. And so like that's a separate like advantage point that we have. And then from like a non-financial perspective, you know, we're posting a lot of research. We've we're trying to get in, we're trying to like really push this out. And so, yeah, hopefully you'll see a lot more exciting stuff from us where we're trying to work on uh a partnership at the moment that we can do with Stanford to like pull put put put out some research on a lot of these space companies too, and just the thesis as well, and really educate uh a lot more on it. And then uh I think from a media perspective as well, there's a big gap where I think a lot of people are very familiar with like the AI names and the robotic names, but with the space names, you know, after SpaceX in StarCloud, maybe and maybe Blue Origin, the rest of the names are a little bit unknown. And so I think uh that's probably because the space sector in general is a little bit old school. You know, it's not necessarily filled with you know 20-year-olds who are obviously doing amazing jobs in AI and robotics and fintech, but I think space generally has a a more older kind of mentality when it comes to things like media, and so that's why we don't necessarily have like a lot of these podcasts and shows and you know Twitter people and and KOLs and things like that. They just don't exist. And so I think we want to kind of bridge that gap a little bit, and I think that can be another value add for us that we can offer to these space companies. So, yeah, that and a few other things as well. I think together, like we can show our value. There's also not that many space funds. You know, a lot of funds that invest in space, they're very broad. They invest in AI robotics, and then maybe a small part goes into space too. Um so yeah, in terms of like the actual number of pure space funds, yeah, we're not looking that many. There are obviously some some big ones in America, some big ones in the UK as well, like Seraphim, but generally there are you know not that many, especially when you compare it to other industries, but and and the same size of CapEx that we're seeing as well.
SPEAKER_01Yeah, yeah, of course. I think the media set is is is a huge one because uh I'm I probably think that like a lot of the founders of space companies, they might recognize that the private markets might be too small for their capital nits, right? Because if you're raising like a small round, then you will still have like a a huge maybe number of funds that would want to get into this round. But then like I think any founder realizes that like you will need like to like raise later and later rounds, and you'll need like to raise more and more capital. And I think unless you democratize the access to those rounds, like unless you educate the broader public, why should you invest into space, you might simply lose out to robotics, or like to like any other sexier niche came the race for capital because even now like we're seeing so much like investment into AI, into EI, in in in robotics as well, that I think without public markets, like without like the distribution to the public, space just might not have like the immense amount of capital it it it needs.
SPEAKER_02Yeah, and I think like the the education gap is really key there as well. Well, I think uh yeah, we're that's why I think the timing for us is pretty good as well, because we think like this this is the the coming trade. This isn't the trade that's happening right now. The trade that's happening right now is robotics, right? And you've been covering this really well as well. But uh yeah, I think like this is this is because like Starship is just coming now. And Starship is gonna take a little bit more time and some more iterations, and the cost is gonna come down. And you know, this isn't like a you know a six-month trade or a one-year trade. We're thinking that this is gonna be a lot more long term. But yeah, the thing the next decade is really promising here.
SPEAKER_01Yeah, for sure. And then how are you thinking about the go go to market for uh for star cap? I mean, would would would love to learn because like I know you're really good at in content and you can go to market. So if you have like any advice, you know, for for like founders and like any insight on how you're still like on on how you are planning to get the TBL to StarCap, we would love to learn.
SPEAKER_02Yeah, so like uh as I mentioned like uh just before, like there's a big education gap. So I think we need to kind of close that gap a lot. And so at the moment we're we're focusing on a lot of research and education, like really trying to educate the value of like what this looks like because I think a lot of people are like, okay, so what if you can go into space? Like, what are you gonna do after that? And so I think uh you know that's why I've been talking a lot about you know some of the incredible drugs that we might be able to make from being in space. Uh, how do we do that? How do we come back down? Like how how you know, do we need to send astronauts or not? Like just kind of explaining all of this out and really then showing people that no, actually, you can literally just go on go on a you know a Falcon 9 or go on a starship, go up into microgravity, which is not that far away. It's only maybe about 200 kilometers up into space. Once you're there, you have these autonomous chambers that can kind of create these drugs, and then afterwards do you send the capsule back down? And there are like different providers who all play a different role in all of these. And ultimately the end goal here is that you know the cancer patient doesn't have to take the IV medication anymore. The cancer patient can stay at home and have the subcutaneous injection instead. And that saves you know millions, if not billions, of dollars in the long run because you don't have to spend the money on the hospital, on the doctors, on the nurses, on the staff, on the patient traveling there, etc. And the patient can have dignity as well at the end of it. So yeah, really just explaining like all of the kind of cycle there. And so there's a lot of education that needs to be done. And so that's also why like we're posting, you know, quite frequently on all of the different platforms to really just close that gap. But I think afterwards it's a case of you know getting people ex you know, getting getting the right kind of teams involved and like you know, working together to like push this as well. So, you know, we're you know, we're we're still very early in that regard. But you know, I'd like us to really hopefully be able to work with you know Solana Foundation, Jupiter, Meteora, you know, the Sunrise team, and you know, together collaboratively, like we can all push this together. So I think there's a a bit of like relationship building and a lot of like uh you know BD as you like to say that needs to be done here. But I think once you've done that, once you're all aligned, then like you can you can push something there. Um video form seems to be like a really exciting thing still. And I think like if you can like if you're good at storytelling and you're able to tell this story, then I think you can really leverage that a lot. And then I think like, you know, generally a lot of the a lot of the things that still that worked, you know, maybe six months ago still work today. So uh clipping uh I think is gonna be great in terms of increasing your overall impressions and you know getting getting out there a little bit more. But uh yeah, I think it's uh to some extent it's still it's still a bit of a numbers game. Like you've got to put episodes out and put put put shows out, and you know, I think you'll see, you know, maybe a couple of them might not do well, but generally I think you know, the more the more you have out there is you know, the quality will also be improving. I'm sure like you know, maybe with your podcast as well, you realize that like every so often you find improvements and you're able to like make a difference here and make a difference there. And overall, if you look back at like episode one to like episode 50, there's like a huge difference, but you maybe weren't even thinking about it as much as well. So yeah, I think uh it's a bit of a numbers game there. Yeah, I think otherwise at the end of the day, like we just have to raise the capital and yeah, we're doing that at the moment.
SPEAKER_01Alright. Do you guys have any like specific strategy for the races? Is it going to be like only private LPs? Are you going to announce some public round as well?
SPEAKER_02Yeah, I think I'm not sure exactly how much I can say here, but uh yeah, private to begin with, and then what when when we're ready for the public phase, we'll uh we'll keep everyone updated.
SPEAKER_01Right. It sounds very exciting. Yeah, like I think Slana is now very ripe for for such a product. I think the first was uh Jurassic Fi, and they did like spectacular on MetaDAO. And I think yeah, like I think in general, like a lot of the Slana crowd is now I mean, people still like trading memes, people still want to make like five to ten extra memes, but I think they also like do realize that like a good portion of their like net worth should probably go into something more stable than than than like memes or or perps.
SPEAKER_02Yeah, well, uh as far as I'm aware as well, like Robust someone from the robust strategy team like connected with Solana, and that's what like they worked together to actually uh you know get get uh their tokenized assets like set up properly on Solana itself. So that was like that was like Robo Strategy team like working directly there, and yeah, it seems to be going in the right direction. Yeah, it's cool to see some of these like more like novel experiments, like you know, tokenized uh fossils are interesting. You know, you've we I think the great thing about uh like on-chain finance is like there is there is everything and everything available, whether you like you know, collectible cards, whether you like fossils, whether you like uh, you know, debt instruments, whether you like just pure Bitcoin or whether you like stocks, whether you like, you know, a private fund or robotics space, whatever. Like we've got it all available. And I think like it goes back to my my what I mentioned before that like access is everything, and like that's one of the reasons why I love like the industry that we're in so much.
SPEAKER_01Yeah, yeah, no, definitely. I think I think we'll still like see a lot of instruments on chain, like you know, from selling your LM credits to buying uh pre-IPO companies in the space industry, like in the robotics industry or or or wherever. Yeah. A lot of cool stuff is about to come. Yeah, like on the cool stuff about to come, what are your plans on Star Cup for the next year?
SPEAKER_02Uh next year is uh essentially just to to grow and and like grow the AUM. You know, I think uh we're gonna take it one month at a time, essentially, and like see like the the the the direction that we can take it. Uh I'd love for us to also like start getting some of these subproducts out as well. But uh yeah, uh I think it's gonna be a a long road ahead, you know. Uh crypto's been through a rough time, but but like it's the complete opposite in equity land, where like it's like amazing there and has been amazing. Like S ⁇ P 500 is practically our all-time highs. And so yeah, it's it's really interesting, like uh the the kind of differences between them, and we're kind of like in the middle trying to like you know bring something from TradFi into crypto markets. But I I I think that the the next year is gonna be hopefully pretty good for crypto assets as well, and I think obviously finance in general is just always gonna keep growing from here. So yeah, it's a case of us like being able to, you know, get ourselves well known enough, start investing in some of these rounds. You know, I think that there are a lot of a lot of space companies raising right now and will be raising in the next 12 months too. And so making sure that we're in the right position that we can get the right deals, be on the cap table, and like yeah, get get the exposure. Uh because if you miss it, then you know you it might be uh it might just be a year or so later and the company's done a 20x or a 30x. And we've seen this already. Star Cloud, StarCloud, which is you know the fastest growing Y combinator company to to become a unicorn, has you know, now it's now uh it's now a multi-billion valuation. And uh yeah, just a couple of years ago it was a fraction of that.
SPEAKER_01I like how you d describe space as a as a trade that that's about to happen, but looking at how fast the the companies are growing, I think like right now it's it's probably like about time to get into this trade. Like it's not like you're still you know investing in something that's very risky, it's still like a lot of companies have like good uh like I would say like good contracts, good revenues, and that are doing like X every year.
SPEAKER_02So yeah, uh yeah, no, no, absolutely. And I think like you know, th there's a there's a very big gap between SpaceX and everyone else. And you know, I think that gap is uh you know gonna gonna compress a little bit. Uh and not because SpaceX is gonna go down, I think it's the every everything else is gonna go up a lot. The the things that SpaceX is doing uh is truly remarkable. And I think they uh you know I I I think that they're on the cards of p you know potentially becoming one of the, if not the most valuable company in the world in the next decade.
SPEAKER_01Yeah. Like for for robotics. Imagine if in 2021, like if in 2023, even someone would like make a tokenized fund investing in in all the top EA labs, we would see like I don't know, like hundred tax like for every like uh crypto bro. That would just be insane.
SPEAKER_02Yep, yep, yep. And and to be fair, I think uh, you know, you know, the infrastructure for crypto has advanced a lot, the psychology of investors has changed a lot. I think like we're we're way more open to this as well now. And so I think you know, we probably will see like more and more funds. Maybe there's gonna be a biotech one, maybe there's gonna be, you know, more in the niches, you know, maybe something, a fund related to like like metals or a fund related to you know some of these kind of more newer like subsectors as well that are that are kind of being introduced now. So I think it's gonna be a trend that I think we'll probably see a lot more of.
SPEAKER_01Yeah, yeah. Like, do you think we'll see like a I don't know, like a specific platform that's just used to tokenize funds kind of like Metadow, but for funds?
SPEAKER_02Yeah, it's something that we were actually thinking about quite a lot as well, actually. So yeah, I do think because I think one of the problems is uh setting up a fund isn't easy. Like it there's a lot of hurdles and things that you need to kind of overcome. So that's also like you know, a bit of a headache and like can make the process quite difficult. So if you're able to like productize that, uh then I think that can certainly help a lot.
SPEAKER_01Yeah. I think actually DAOs. Like either one of them tried to do something similar. I mean, it it wasn't anywhere near. I think like the intended goal of like having tokenized fund, but still having like an AI agent trade for you is kind of close to to the infrastructure to develop a tokenized fund.
SPEAKER_02We we will get to that. You can see it happening, right? You can see these different experimentations trying to have like RoboStrategy, we have XMakinna, we have Star Cap, we have a few others as well now. So I think uh yeah, we're gonna see this over the next year like really proliferate.
SPEAKER_01Yeah. Like I'm and and and the good thing is to like I also see the demand for the for the for those experiments. I think like the first part of the demand for like let's say DAOS was uh speculative, but still like a lot of tokens there, like did like millions, like billions in in market cap. So that was a fun time. Yeah, for sure. I think I think like crypto is like a very fun niche because you like need to I think like on the position inside, like you also kind of like I'm not sure how how about you thinking about this watch, but like you need to also have some like fun element inside of your product because cryptos like always like this, I don't know, like dinosaurs are more fun than like let's say manufacturing so in a in a weird way right I think dinosaurs and like tokenized fossils like are better suited like towards the current landscape of like crypto than like let's say a fund investing in manufacturers of AI even though the latter might be like you know safer bring you more access and so on and so forth so but I mean dinosaurs are cool.
SPEAKER_02Yeah yeah well well I mean look when we live in this age this information age where like you know we're we're like being fed like a hundred different sources on Twitter on on on like whichever social platform you use everyone's like signed up to like 10 different platforms and you're like getting information from everywhere all the time like attention is everything really and so that's where the fun part kind of comes in a little bit like you know I think crypto people have realized that you know when when there's like a billion different tokens to to choose from you got to do something a bit exciting a bit different a bit fun if you want to grab the attention and I think that's why as an industry we're really good at this because we've been forced to from a competition perspective. So so yeah I think that's yeah I agree there should be something interesting exciting that's kind of what's going to bring eyes to you as well and yeah like that's why we did our website in such a funny way as well like a with with the with the astronaut kind of going through the different dimensions and then falling into the rocket. You know it's we we did it on purpose because like we wanted people to like have have this fun element you know which uh I think can yeah it's just it's just essentially a bit of fun.
SPEAKER_01Yeah I think the website was like super nice yeah I was like like swing like I I I didn't believe like it's a token is funded for us like it looks so crypto native but at the same time you know like you see like super super serious companies like with the background of like some drone stuff it was like super fun. Yeah yeah that it was fun making that uh cool yeah I think that's that's like probably it from my side I think like maybe I can actually ask the wild card question. So if you could invest all of your money watching the only three stocks into and into three companies on the private market which companies would those be like which three private companies and which three stocks would would those be yeah good question I think off the top of my head I would say let's start with pre-IPO companies first.
SPEAKER_02Star cloud I think we talked about it a little bit today with the orbital data centers I think just have very good asymmetry there. No financial advice of course but uh yeah it's something that I I think by Starcap yeah shitting off on this podcast. I I really love a lot of the like medical overlap in space as well and so because of that you have companies like VADA which are like help to create the infrastructure to be able to like create new drugs in space and they help to like bring the bring the drugs back down to earth in a safe manner. But also like the companies that are like really pushing towards like new crystal drug manufacturing in microgravity like Bioorbit. So those are kind of really exciting companies to me. So yeah I think uh I'd say them I'd say one other pre-IPO company that I like is Neuralink which is Elon Musk's like uh company his biotech company I don't think uh it gets as much attention at the moment but I suspect they will in the future just like every other one of his companies on on the public side of things I really like Amazon as a company um I think it's like one of my favorite companies I do own some shares in Amazon particularly because it's kind of like an index that covers you for a lot of different things they have like the they have the AI division they have obviously the the the the the website where you can basically buy anything neck with next aid delivery they also have AWS so they have like three really core like multibillion dollar revenue streams coming from there. But then it also is a little bit of uh like uh you get a little bit of upside from all of the other stuff as well like Amazon has a space division Amazon has a robotics division Amazon has like all of these other divisions they have a they have a doorbell they have all of these other things as well so it's kind of like buying an index in one asset that I really like and and and I feel like I I liked my companies where like I'm I'm using the products myself all the time and I think like that just helps me to like feel a bit or bring more conviction but I think the the numbers tell you everything if you look at their revenues okay fine they're spending incredible amounts on CapEx now but if you look at their revenue growth if you look at like how a lot of the these other subdivisions are growing it's it's great. I guess uh SpaceX I think is going to be one of the biggest if not the biggest company in the future with with orbital data centers the way that Starlink is proliferating and all of that sort of stuff and then I guess more recently I've been looking at like companies where like they have a bit of a they have they have a huge distribution like system but their apps or whatever have been or their stocks been destroyed because of like AI sentiment. And I just find those like really interesting like uh opportunities at the moment. You know for example Duolingo like it's an app that's like got like daily active users all time high stock is down like 80% you know revenues all time high the stock is down 80%. Snapchat is another one like that Netflix Roblox you know these are companies that have huge distribution channels the stocks on all of them are really really badly down. So uh yeah I guess maybe that's not something about if I had all the money in the world I'd put my money in but then maybe it's something that I'm looking at right now as a as a public investor as well. But I'm looking at like interesting the distribution side is interesting.
SPEAKER_01Like do you think that they'll like that they might be able to turn this this distribution into something like uh of I guess like more monetary value like do you think for for for example Snapchat will be able to um cross sell some products to its users because I think Snapchat for example has been trying to I mean to monetize for like a while they have like Snapchat premium and like all of the other stuff they have like maybe even some ads but I'm not sure if they had like much success in in monetizing their user base.
SPEAKER_02No no exactly exactly but I think like when you've got a billion users like that are actually still using your app especially in this new era of like uh like building building stuff with you know the speed to build stuff and get stuff out has reduced so drastically that I that I think that there's something there, you know I know that right now they're building uh their their glasses product and uh I don't necessarily know if I'm like the biggest fan of it. I don't think it I don't know if it's the right idea or not. But uh yeah I'm looking at like all of these companies that are like are are down bad like really really bad as well and like I just think that there's an interesting opportunity where like you know these companies have got very sticky users they're not go they're not going away. Even like Reddit for example like all of these companies their stocks down well over 50% in some cases 90% but like they still have like users at all time high. So I think it's just kind of an interesting dichotomy there where like normally if you see like users all time high revenue all time high the stock is all all time high but like the AI disruption is like really pricing in like how these companies are gonna fall or collapse.
SPEAKER_01Fair enough. But right now that hasn't been the case yeah actually like on the SpaceX question do you think we'll see like a Chinese version of SpaceX anytime soon? Because in in robotics and in the Yale like there is an interesting phenomenon where like China is also starting the race and we see like Unish from from China I think deep six or the Chinese Yale like there it's like using more tokens in open art on open art than like any US lab. Like how are you how are you thinking about the like SpaceX from from China?
SPEAKER_02Yeah simple simple answer is yes you know they have their own space station as well so uh I think uh there will be there will be something there I think uh right now I think we probably see and hear everything from the US side but we kind of miss things on the Chinese side so yeah there will be uh Unitree moment as well and look at like look at how Unitree is just ripped from IPO as well. Yeah um yeah which is in insane so yeah I think we will see that as well. Do you think it's really worth trying to get position for uh the Chinese space boom as well like if it's possible at all yeah yeah yeah I think it I think it'll follow the robotics stuff very closely because they're they're similar industries in the sense that they're very capex very specialized we're at this in like inception point as well of like breakthroughs in technology and like things that can happen but but the sectors have been around for multiple decades right both robotics and space have been around for a long time it's not something new it's more of a case of like we're we're we're reaching breakthroughs. We have more capital to spend at these than ever before as well so yeah I think it it it's going to be almost identical. No is Starkup going to invest in Chinese companies at all or like are you going to like stay focused on the US and Europe most we're open so we're like we're we're we're not focused only on the US like if there's if there's amazing British companies as well we'll invest in them. If there's amazing Chinese companies like we'll invest in them. This is what we want to do is we want to get exposure to the best companies that like fit our thesis of compute energy and manufacturing in space.
SPEAKER_01Right. I think it's like actually where crypto part matters because if you get listed on Nasdaq and you like invest in Chinese companies it might be like I'm not sure how easy it's gonna get like it gets yeah no that's the the legal side of space is really difficult.
SPEAKER_02And that's because like yeah China and the US are obviously against each other on on this race to Mars for example. And so yeah it's it's really difficult and also you have to be very careful with where capital comes from for especially if it comes on it especially if equity is involved as well because otherwise you could have uh someone from North Korea for example investing your fund or in your instrument and the underlying instrument can give you exposure to equity in in like uh you know a US company and if for example if we're talking about a credit instrument here if for whatever case you know the US company defaults who gets the ownership of that technology of that hardware well it the North Korean person might get access to it and then then it's a case of national security risk. So uh that's the it's a big problem though. It needs to be navigated well.
SPEAKER_01It seems like it seems like space and security is like more has more like ins and outs than like robotics and security let's say because like robots are like not as I guess like not as much of like a national point as as like space has uh even historically been right yeah I think I think because maybe there's a big overlap with defense as well but I think maybe we'll see robotics like have that angle as well especially as like robotics and military kind of stuff continues to advance got it got it key watch thank you so much for timing on this is all from my side if you want to have like any closing note and go ahead.
SPEAKER_02No uh thank you for having me I think it was a lovely chat. I really enjoyed talking about space I think if any of you guys watching want to learn more about space and come to our page starcup.xyz follow us on Twitter and like we'll share a lot of research in terms of some of the things that we're interested in some of the things that we're excited about and hopefully we can get you all space pilled. Awesome. Appreciate you watching no thank you very much a lot of chatting