1 00:00:03,930 --> 00:00:06,780 Sean Aylmer: Welcome to the Fear and Greed daily interview. I'm Sean Aylmer. 2 00:00:07,140 --> 00:00:11,309 Sean Aylmer: At first glance, blockchain and horse racing don't seem to 3 00:00:11,309 --> 00:00:14,309 Sean Aylmer: have a lot in common, but an Australian startup is 4 00:00:14,309 --> 00:00:19,439 Sean Aylmer: now using blockchain technology to offer micro shares in race horses. 5 00:00:19,800 --> 00:00:22,560 Sean Aylmer: It's a fascinating idea to say the least, and one 6 00:00:22,560 --> 00:00:26,220 Sean Aylmer: that secured some powerful backers. Remember, this is general information only. 7 00:00:26,220 --> 00:00:28,949 Sean Aylmer: It's certainly not investment advice. You should seek professional advice 8 00:00:28,950 --> 00:00:33,359 Sean Aylmer: before making any investment decisions. Steve Piek is the Founder 9 00:00:33,360 --> 00:00:37,560 Sean Aylmer: and CEO of BTX Racing. Steve, welcome to Fear and Greed. 10 00:00:38,310 --> 00:00:39,390 Steve Piek: Thanks for having me here, guys. 11 00:00:39,780 --> 00:00:42,570 Sean Aylmer: Now, I've never thought I'd put blockchain and horse racing together, 12 00:00:43,170 --> 00:00:46,110 Sean Aylmer: neither do I understand particularly well, but both I try 13 00:00:46,110 --> 00:00:49,380 Sean Aylmer: and follow quite closely. So tell me how does it work? 14 00:00:50,490 --> 00:00:54,540 Steve Piek: Yeah, look, we're a technology company, so what we did 15 00:00:54,570 --> 00:00:57,600 Steve Piek: was we're actually bringing blockchain to the equine industry to 16 00:00:57,600 --> 00:01:01,410 Steve Piek: bring some new ownership models and business models to the 17 00:01:01,410 --> 00:01:03,959 Steve Piek: equine industry to solve some of their core problems. So 18 00:01:04,349 --> 00:01:06,779 Steve Piek: if you've ever looked at owning a racehorse, you'll know 19 00:01:06,780 --> 00:01:11,789 Steve Piek: that racehorse ownership's pretty expensive. And by using fractionalised ownership of racehorses, 20 00:01:11,789 --> 00:01:14,490 Steve Piek: we can actually break that down to basically a one-off 21 00:01:14,670 --> 00:01:18,270 Steve Piek: price of $75, is one of our more affordable horses. 22 00:01:18,270 --> 00:01:21,120 Steve Piek: So it shows the power of using an efficient technology 23 00:01:21,120 --> 00:01:21,628 Steve Piek: to do that. 24 00:01:22,410 --> 00:01:23,969 Sean Aylmer: Okay, I'm just going to break that down a bit. 25 00:01:23,969 --> 00:01:27,360 Sean Aylmer: So let's say a racehorse at the Easter Sales might 26 00:01:27,360 --> 00:01:29,789 Sean Aylmer: be 500,000, let's go for a million dollars, just 'cause 27 00:01:29,789 --> 00:01:34,200 Sean Aylmer: the numbers make it easier. And you are using blockchain 28 00:01:34,200 --> 00:01:37,590 Sean Aylmer: technology to offer, so there might be a parcel of 10% 29 00:01:38,220 --> 00:01:41,550 Sean Aylmer: of that horse, which I'm making this up, so jump in, Steve. 30 00:01:41,759 --> 00:01:43,708 Sean Aylmer: Is that how it works, there's a parcel of 10% 31 00:01:44,219 --> 00:01:47,188 Sean Aylmer: that then can be kind of on- sold using blockchain technology? 32 00:01:47,699 --> 00:01:51,570 Steve Piek: Correct. And so BTX may a acquire that 10% from 33 00:01:51,570 --> 00:01:55,260 Steve Piek: the auctions, and we may split that 10% into a hundred, 34 00:01:55,260 --> 00:01:59,370 Steve Piek: 200, a thousand ownerships to make that price more affordable. So we've 35 00:01:59,370 --> 00:02:03,119 Steve Piek: got ownership models at the moment where we've got a $400,000 horse 36 00:02:03,120 --> 00:02:06,780 Steve Piek: where we own 15% and we've got 1500 units available 37 00:02:06,780 --> 00:02:07,380 Steve Piek: in that horse. 38 00:02:08,340 --> 00:02:10,860 Sean Aylmer: Why blockchain technology? Where's that come into it? 39 00:02:11,250 --> 00:02:14,910 Steve Piek: For us, blockchain is a really good enterprise software. So 40 00:02:15,270 --> 00:02:17,999 Steve Piek: when you think on the backend of a technology stack, 41 00:02:18,000 --> 00:02:21,479 Steve Piek: for us, having more efficient and trusted transactions was really 42 00:02:21,480 --> 00:02:25,950 Steve Piek: important. So really the efficient processing for us, because if 43 00:02:25,950 --> 00:02:29,130 Steve Piek: you've ever done traditional ownership, it's pretty manual and paper 44 00:02:29,130 --> 00:02:33,059 Steve Piek: base. Blockchain, as an automation software, is actually a really 45 00:02:33,059 --> 00:02:33,870 Steve Piek: powerful tool. 46 00:02:35,580 --> 00:02:40,380 Sean Aylmer: Okay. So if I want to buy one of those 1500 units in the $400,000 horse, of which you have 15%, 47 00:02:40,440 --> 00:02:41,519 Sean Aylmer: that's right, isn't it, I think? 48 00:02:41,579 --> 00:02:41,970 Steve Piek: That's right. 49 00:02:42,029 --> 00:02:44,490 Sean Aylmer: How do I go about that? Are you trying to 50 00:02:44,490 --> 00:02:47,010 Sean Aylmer: appeal to retail investors or is it... I mean, it's 51 00:02:47,070 --> 00:02:49,590 Sean Aylmer: more than friends and family, if there's 1500 units. 52 00:02:49,680 --> 00:02:52,170 Steve Piek: That's right. I wish I had that many friends. But 53 00:02:52,530 --> 00:02:56,159 Steve Piek: we have ownership. So the ownership actually starts from $125. 54 00:02:56,160 --> 00:02:58,440 Steve Piek: So that includes the value of the horse, but it 55 00:02:58,440 --> 00:03:01,919 Steve Piek: also includes prepaid training fees as well. So when you 56 00:03:01,919 --> 00:03:04,590 Steve Piek: actually pay that upfront costs, you actually don't pay any 57 00:03:04,590 --> 00:03:07,800 Steve Piek: more with BTX ever again, which is a really unique 58 00:03:07,800 --> 00:03:10,649 Steve Piek: proposition because we don't want to be collecting those monthly 59 00:03:10,650 --> 00:03:13,620 Steve Piek: training fees every month from our owners. But what we 60 00:03:13,620 --> 00:03:15,570 Steve Piek: do do at the end of the ownership period, is 61 00:03:16,109 --> 00:03:18,360 Steve Piek: pay back any of those unused funds to our owners 62 00:03:18,360 --> 00:03:21,330 Steve Piek: as well. So it's as simple as basically heading over 63 00:03:21,330 --> 00:03:24,210 Steve Piek: to our website or our mobile app. We have a 64 00:03:24,210 --> 00:03:27,179 Steve Piek: marketplace and you can buy your retail investments, you can 65 00:03:27,179 --> 00:03:30,359 Steve Piek: look at the product disclosure statements. All our horse ownerships 66 00:03:30,360 --> 00:03:34,559 Steve Piek: are offered under an AFSL (Australian financial services (AFS) licence), so they're financial investments. So 67 00:03:34,559 --> 00:03:37,320 Steve Piek: that gives you the regulatory overlay of our products. 68 00:03:37,890 --> 00:03:40,950 Sean Aylmer: And can you pick your horse? I mean, there's obviously 69 00:03:40,950 --> 00:03:45,360 Sean Aylmer: a limited number of thoroughbreds available, but presumably you own 70 00:03:45,360 --> 00:03:48,059 Sean Aylmer: a few of which the cost of a unit might 71 00:03:48,059 --> 00:03:50,249 Sean Aylmer: differ, depending on the horse. Is that right? And you 72 00:03:50,250 --> 00:03:51,660 Sean Aylmer: can choose? Is that how it works? 73 00:03:51,780 --> 00:03:54,330 Steve Piek: That's correct. At the moment we've got about 10 ownerships. 74 00:03:54,330 --> 00:03:57,300 Steve Piek: So we've got ownerships with Ciaron Maher Racing, so he was the 75 00:03:57,300 --> 00:04:00,210 Steve Piek: winner of the 2022 Melbourne Cup. We've got a couple 76 00:04:00,210 --> 00:04:03,660 Steve Piek: of horses with Gai Waterhouse. We've also got some short 77 00:04:03,660 --> 00:04:07,530 Steve Piek: term ownerships with the O'Dea-Hoysted Racing as well. So one 78 00:04:07,530 --> 00:04:10,649 Steve Piek: of our more popular ownerships as of late was a 79 00:04:10,650 --> 00:04:13,860 Steve Piek: Group One racing horse called Chaillot, that's actually racing this 80 00:04:13,860 --> 00:04:16,710 Steve Piek: weekend in a Group One Tatts Tiara, which is a really 81 00:04:16,710 --> 00:04:19,950 Steve Piek: exciting opportunity and one that probably wouldn't have been affordable 82 00:04:19,950 --> 00:04:22,830 Steve Piek: to most of those people previously, 'cause shares in that 83 00:04:22,830 --> 00:04:25,589 Steve Piek: horse are $88. So really exciting proposition there. 84 00:04:26,400 --> 00:04:28,439 Sean Aylmer: Okay. So let's say I own a share. Let's say it 85 00:04:28,440 --> 00:04:30,690 Sean Aylmer: does win a Group One or a horse that wins 86 00:04:30,719 --> 00:04:33,630 Sean Aylmer: a lot of money, even better wins The Everest. Right? 87 00:04:33,690 --> 00:04:36,270 Sean Aylmer: So how do you... Do I get some sort of 88 00:04:36,270 --> 00:04:39,599 Sean Aylmer: share of the prize money? And I hasten to add, 89 00:04:39,599 --> 00:04:42,419 Sean Aylmer: I have owned parts of racehorses and never, no matter 90 00:04:42,420 --> 00:04:44,520 Sean Aylmer: what they've won, have I ever got a return in 91 00:04:44,520 --> 00:04:47,879 Sean Aylmer: terms of prize money, to be honest. But if it 92 00:04:47,879 --> 00:04:50,160 Sean Aylmer: does win a lot of money, do I get some 93 00:04:50,160 --> 00:04:50,760 Sean Aylmer: sort of return? 94 00:04:51,270 --> 00:04:54,150 Steve Piek: Absolutely. So if you're talking about that horse that you 95 00:04:54,150 --> 00:04:57,990 Steve Piek: bought into the 1500 shares, your ownership percentage, you'll get 96 00:04:57,990 --> 00:05:01,230 Steve Piek: the same ownership proportion as your prize money. So if 97 00:05:01,230 --> 00:05:04,259 Steve Piek: you own 1% of the horse in our ownerships, you'll get 98 00:05:04,260 --> 00:05:06,900 Steve Piek: 1% of the prize money. So that's the really neat 99 00:05:06,900 --> 00:05:10,320 Steve Piek: option here with us is it's not just about the 100 00:05:10,320 --> 00:05:13,470 Steve Piek: experience of ownership, it's the prize money opportunity as well. 101 00:05:13,500 --> 00:05:17,849 Sean Aylmer: Okay. So it's democratising horse ownership in many ways. What 102 00:05:17,849 --> 00:05:19,378 Sean Aylmer: sort of response have you had so far? 103 00:05:20,190 --> 00:05:23,190 Steve Piek: It's been really positive. I think it's a unique investment 104 00:05:23,190 --> 00:05:26,159 Steve Piek: opportunity. There's not many investments on the market at the 105 00:05:26,160 --> 00:05:29,220 Steve Piek: moment where when once you buy into the asset. For 106 00:05:29,220 --> 00:05:32,040 Steve Piek: us it's actually you get regular training content, you get 107 00:05:32,040 --> 00:05:35,730 Steve Piek: stable tours and race day experiences. Obviously, the experience gets 108 00:05:35,730 --> 00:05:38,099 Steve Piek: better as we start to hit the track more. And 109 00:05:38,099 --> 00:05:40,529 Steve Piek: as an early stage company, we're starting to do that 110 00:05:40,529 --> 00:05:43,500 Steve Piek: more frequently, which is building the experience every month for 111 00:05:43,500 --> 00:05:44,850 Steve Piek: our owners, which is really cool. 112 00:05:45,210 --> 00:05:47,400 Sean Aylmer: Stay with me, Steve, we'll be back in a minute. 113 00:05:53,550 --> 00:05:59,339 Sean Aylmer: I'm speaking to Steve Piek, Founder and CEO of BTX Racing. Okay. 114 00:05:59,339 --> 00:06:00,990 Sean Aylmer: So who's a typical investor? 115 00:06:02,070 --> 00:06:04,860 Steve Piek: Look, we've had a range. We've had owners all around Australia. 116 00:06:04,890 --> 00:06:07,770 Steve Piek: People that have owned in syndicates before who, during COVID, 117 00:06:07,770 --> 00:06:10,410 Steve Piek: would actually have said, rather than owning one horse for 118 00:06:10,410 --> 00:06:13,769 Steve Piek: $5,000 , they might own all 10 horses with us 119 00:06:13,770 --> 00:06:16,830 Steve Piek: to get a varied experience. That's been a really common one. 120 00:06:16,830 --> 00:06:19,560 Steve Piek: And a lot of the punters who actually like to 121 00:06:19,560 --> 00:06:23,760 Steve Piek: punt have also said, well, the ownership experience is complimentary 122 00:06:23,760 --> 00:06:26,580 Steve Piek: to that experience as well. So we've seen a variety 123 00:06:26,580 --> 00:06:28,469 Steve Piek: of people, and we're starting to see a lot of 124 00:06:28,469 --> 00:06:32,040 Steve Piek: people interested in the Web 3 and blockchain area, actually 125 00:06:32,040 --> 00:06:35,879 Steve Piek: dabble in how we connecting blockchain to real world assets 126 00:06:35,879 --> 00:06:37,380 Steve Piek: because it's a really unique proposition. 127 00:06:38,490 --> 00:06:40,738 Sean Aylmer: Okay, who's... Oh, I'm going to say who's ponying up 128 00:06:40,740 --> 00:06:45,599 Sean Aylmer: the money? Pardon the pun, who is investing in BTX 129 00:06:45,599 --> 00:06:48,150 Sean Aylmer: Racing? Where's your money coming from to allow this to happen? 130 00:06:48,779 --> 00:06:50,938 Steve Piek: We've had a number of private investors to date, and 131 00:06:50,940 --> 00:06:54,150 Steve Piek: we've been fortunate enough to have people and industry partners, 132 00:06:54,150 --> 00:06:57,960 Steve Piek: like Ciaron Maher Racing and Trilogy Racing, come on board because they see 133 00:06:57,960 --> 00:07:00,810 Steve Piek: the power of what our technology can do. It's not 134 00:07:00,810 --> 00:07:03,660 Steve Piek: just the racehorse ownership that we're looking at. We're looking 135 00:07:03,660 --> 00:07:07,440 Steve Piek: at how blockchain can actually bring value across this industry. 136 00:07:07,440 --> 00:07:10,289 Steve Piek: So we're seeing it from racing to breeding to some 137 00:07:10,289 --> 00:07:13,290 Steve Piek: of the business transactions as well. So it's a broad 138 00:07:13,320 --> 00:07:16,410 Steve Piek: spectrum of people that have become involved with BTX, but 139 00:07:16,800 --> 00:07:18,960 Steve Piek: we're always looking for more partners as well. 140 00:07:19,590 --> 00:07:24,479 Sean Aylmer: Of course. So the blockchain technology, can it actually shift 141 00:07:24,480 --> 00:07:27,180 Sean Aylmer: beyond horse racing then, what you're talking about? 142 00:07:27,719 --> 00:07:30,180 Steve Piek: Absolutely. I think over the next couple of weeks we've 143 00:07:30,210 --> 00:07:32,700 Steve Piek: actually got a product that's coming out in breeding, which 144 00:07:32,700 --> 00:07:36,300 Steve Piek: will be fractionalised breeding. So unlike your comment there around 145 00:07:36,300 --> 00:07:38,700 Steve Piek: the racing and the prize money, there is an element 146 00:07:38,700 --> 00:07:41,160 Steve Piek: of luck in racing, I must say. But on the 147 00:07:41,160 --> 00:07:44,340 Steve Piek: breeding side, we've got a product over the next two weeks, 148 00:07:44,340 --> 00:07:47,129 Steve Piek: which will be launching, which will give people the avenue 149 00:07:47,129 --> 00:07:49,890 Steve Piek: to invest in broodmares. It'll actually give you the ownership 150 00:07:49,890 --> 00:07:52,140 Steve Piek: in their foals to take to the auctions, which is 151 00:07:52,140 --> 00:07:55,350 Steve Piek: a real alternative investment, which should be of a lot 152 00:07:55,350 --> 00:07:58,500 Steve Piek: of appeal to people as well, because the financial returns 153 00:07:58,500 --> 00:08:01,589 Steve Piek: are actually quite predictable on the breeding side. There's a 154 00:08:01,590 --> 00:08:04,619 Steve Piek: lot more analysis and a lot more information, and that'll 155 00:08:04,619 --> 00:08:06,240 Steve Piek: be a product which will be really exciting. 156 00:08:07,260 --> 00:08:09,870 Sean Aylmer: Okay. So I've got to ask, Steve, you're an accountant 157 00:08:09,930 --> 00:08:14,370 Sean Aylmer: by trade, you spent almost a decade at EY. How 158 00:08:14,370 --> 00:08:15,330 Sean Aylmer: did you get into this? 159 00:08:15,900 --> 00:08:19,770 Steve Piek: Yep. No, I am an accountant by trade, chartered accountant. 160 00:08:19,770 --> 00:08:24,479 Steve Piek: So look, I really saw the application of the technology. 161 00:08:24,540 --> 00:08:26,070 Steve Piek: I was fortunate enough to work in part of the 162 00:08:26,070 --> 00:08:28,890 Steve Piek: digital team at EY. And look, part of my passion 163 00:08:28,890 --> 00:08:32,370 Steve Piek: really stems from, what are the innovative solutions we can 164 00:08:32,370 --> 00:08:35,280 Steve Piek: bring to new markets? With a passion for horse racing 165 00:08:35,280 --> 00:08:38,429 Steve Piek: and a passion for blockchain, look, it was really a no-brainer. 166 00:08:38,429 --> 00:08:41,309 Steve Piek: Once you understand the industry problems that they're facing, whether 167 00:08:41,309 --> 00:08:45,720 Steve Piek: it's expensive ownership or manual paper-based processes in this industry, 168 00:08:45,750 --> 00:08:49,020 Steve Piek: blockchain's a perfect application. And I can't help but get 169 00:08:49,020 --> 00:08:52,110 Steve Piek: excited that this is an industry that's right for disruption. 170 00:08:52,110 --> 00:08:54,270 Steve Piek: And as a tech company, this is something that we're 171 00:08:54,270 --> 00:08:55,290 Steve Piek: really passionate about. 172 00:08:56,190 --> 00:09:01,708 Sean Aylmer: You talk about Ciaron Maher Racing and others investing in what you're doing. 173 00:09:02,309 --> 00:09:05,910 Sean Aylmer: You are a disruptor in the industry, but obviously people within the industry 174 00:09:05,910 --> 00:09:07,440 Sean Aylmer: see that and want to be part of it. 175 00:09:08,160 --> 00:09:10,228 Steve Piek: That's right. We have an ethos that we would like 176 00:09:10,230 --> 00:09:12,960 Steve Piek: to work with the industry. There's no point building products 177 00:09:12,960 --> 00:09:17,400 Steve Piek: for people that don't want them. So working with trainers, 178 00:09:17,400 --> 00:09:20,970 Steve Piek: breeders, regulators, we have an open mindset that we want 179 00:09:20,970 --> 00:09:23,130 Steve Piek: to work with the industry to build products that work 180 00:09:23,130 --> 00:09:25,860 Steve Piek: for the industry. That's what's going to create long- term 181 00:09:25,860 --> 00:09:29,400 Steve Piek: value for the industry. And as we can build products 182 00:09:29,400 --> 00:09:33,239 Steve Piek: that hopefully bring in younger, the next generation, the Gen 183 00:09:33,240 --> 00:09:36,960 Steve Piek: Z of the future of racing, that's a really exciting 184 00:09:36,960 --> 00:09:39,240 Steve Piek: proposition for us to work with the industry, to bring 185 00:09:39,240 --> 00:09:43,050 Steve Piek: new audiences, bring new crowds. And ultimately increase value for 186 00:09:43,050 --> 00:09:45,030 Steve Piek: the entire industry, is our vision. 187 00:09:45,540 --> 00:09:47,490 Sean Aylmer: Steve, thank you for talking to Fear and Greed. 188 00:09:48,120 --> 00:09:49,050 Steve Piek: Thank you very much for having me. 189 00:09:49,740 --> 00:09:53,248 Sean Aylmer: That was Steve Piek, founder and CEO of BTX Racing. 190 00:09:53,490 --> 00:09:56,070 Sean Aylmer: This is the Fear and Greed daily interview. Remember, you 191 00:09:56,070 --> 00:09:59,760 Sean Aylmer: should get professional advice before making any investment decisions. Join 192 00:09:59,760 --> 00:10:01,620 Sean Aylmer: us every morning for the full episode of Fear and 193 00:10:01,620 --> 00:10:05,790 Sean Aylmer: Greed, Australia's most popular business podcast. I'm Sean Aylmer. Enjoy 194 00:10:05,790 --> 00:10:06,179 Sean Aylmer: your day.