MAVRO (MVR) Rating
MAVRO is a decentralized and transparent platform for Multi Level Marketing system based on Blockchain Ethereum.
MAVRO 2.0 is the decentralized and transparent MLM system. The Company will create a payment solution platform for Multi-Level Marketing (MLM) companies. The platform will be one of the first in the world to cater to existing and new MLM firms throughout the world. MAVRO will be an ERC23 token, which utilizes the Ethereum blockchain platform to help revolutionize the $178B MLM industry throughout the world.
|AVERAGE SCOPE -0.6||FLAT||OUTLOOK NEGATIVE|
Mavro 2.0 aims to create a calculated structure by solving the financial processing problems faced by the Multi-Level Marketing industry. By leveraging the latest in technological developments, the MAVRO model is superior to the majority of the real businesses that operate in the marketplace today. The model proposes measures to altogether enhance the payment processing solutions offered to MLM firms.
Through the principal Blockchain-based stage for secure and quick payment arrangements, the MAVRO model designs the best solution on the marketplace currently. Furthermore, using a Smart Contract, the programmed payment confirmation framework affirms payment on both sides of the transaction. It guarantees the ideal concepts of self-rule, security, network confidence and transaction speed.
The Company declares in the “white paper” that the key goal of ICO is to attract financing for platform development. Below you can see the detailed structure of ICO funds allocation:
When the platform and application be ready and the whole system starts operations, the Company will use funds from ICO to maintain its day-to-day activities. However, it is not clear what revenue streams will maintain its operating activities in a long-term period.
The Company as the payment platform should provide more information about its fees structure and other drivers of its revenue. Now, there is no any reliable information that the Company will operates independently without addition rounds of financing.
The Company claims to settle the most urgent payment issues of MLM industry. However, the project is still far from its goals. Now, there is no clear forecast of revenue drivers and operating expenses of the company in the future, there is no exact understanding of what share the company plans to occupy in the market. The budget for marketing is comparable with the budget for developing the application and the system, which is rather strange. The company describes the future functionality of the application at high-level. All this indicates that the founders have not sufficiently studied this issue, which will negatively affect the future development of the project as a whole.
The Company declares that the total number of tokens amounts to 600m. This sum is divided by two stages pre-sale – 25m and ICO 475m tokens.
On 18 February 2018, the Company has released almost 0,7m tokens. Taking into account that the pre-sale stage finishes on 21 February 2018 the Company dramatically underperforms its plan of attracting investors. It demonstrates a low demand from potential buyers.
In the most optimistic case when the Company becomes the leader in the MLM payment market, the total tokens volume should cover at least 30% of the current market volume. According to the ICO terms 1 MVR amounts to 0,0002 ETH. As of 18 February 2018 the market value of 1 ETH is $920 it means that implied value of 1 MVR amounts to $0,2. This investment shows significant yield, but the probability of this scenario happens is too low (please see analysis in the Risk section).
Token economics will work if the Company meets a commitment of limited number of tokens. Fixed number of tokens and raising volume of payment and MLM market will be the key value drivers of tokens value. Of course, the Company tries to show in its materials potential of high yields. However, such pretty numbers works only under unreal conditions. Low demand from the investor side at pre-sale stage proves that the market does not share the Company’s opinion of aggressive growth.
The Company will operate on the payment solutions market. There are many strong players on this market but MAVRO plans to enter exclusive segment related with MLM companies. It will bring opportunities for long-term growth due to the absence of good solutions on this segment. Further development of MAVRO will be related with both the volume of total online payments and total turnover of MLM companies globally.
According to the analysis of BNP Paribas digital payments are expected to reach 726 bn in 2020 with CAGR 10,9%.
According to McKinsey, research global payment revenues are expected to grow 5% per year over next 2 years.
Besides the significant increase of the whole payment industry, also development of MLM market will be the strong driver of potential growth of MAVRO. According to the World Federation of Direct Selling Association the CAGR from 2013-2016 amounted to 5.2%. The total volume of global MLM industry was reported as $183 bn and the number of sellers as 109 m.
The world largest and most popular companies, which focuses on MLM trading systems, are provided below:
- North America: Amway (US), Avon (US), Herbalife (US), Mary Kay (US), Tupperware (US)
- South America: Natura (Brazil), Belcorp (Peru), Yanbal (Peru), Fuxion Biotech (Peru)
- Europe: Vorwerk (Germany), Oriflame (Switzerland), Telecom Plus (UK), Forbes Lux (Switzerland), PM International (Germany)
- Asia / Pacific: Infinitus (China), Perfect (China), Tiens (China), New Era (China), DXN (Malaysia)
Despite the prospects of growth MLM industry still faces several obstacles:
- The industry continually struggles to get fair access to banking solutions
- Many of the world’s leading governments have over regulated the industry
- The lack of transparency in the industry allows bad actors to operate
- Complexity of Accounting for the industry
- Reputation Costs
The Company enters the market with high potential to growth. Moreover, the platform plans to provide unique service that settles major current issues (time and costs of transactions, transparency and regulation). Now there are no any significant rivals. This is a good opportunity for the Company to occupy large market share and develop its business very fast. Flexible instruments in MLM payments will be very interesting for large MLM companies, which have large customers and partners network. Therefore, the Company has found a very dynamic niche in the payment market.
Project team consists of three key members and numerous advisors in different countries. Key members are responsible for the launch of the platform and application and global project development. Advisors in different world regions have to boost marketing complain and attract potential buyers of MAVRO tokens. MAVRO have it representatives in all African countries, Russia and CIS, China, Italy, Brazil and India. It means that their target audience is population of emerging countries.
The company mentioned only three persons as the key project members and developers:
Sergey Mavrodi – Mavro advisor, founder of MMM community and MMM Global. He is a Russian criminal and a former deputy of the State Duma. He is the founder of the МММ series of pyramid schemes. In 2007 Sergei Mavrodi was convicted in a Russian court of defrauding 10,000 investors out of 110 million rubles ($4.3 million). Mavrodi claims he is not the beneficiary of the donations and he is not used to flamboyant lifestyle. His true charges of which he was later convicted of is tax fraud though he claimed that MMM scheme is not a business, but a mutual donation program of which there is no law against such.
Victor Geld – Mavro advisor, creator of MAVRO cryptocurrency, MMM Global co-founder.
Stepan Demura – Fund manager and financial analyst, Russian financial and stock analyst, former observer and presenter of RBC and Radio Finam FM. In 1993, he graduated from the Moscow Institute of Physics and Technology (MIPT) with a degree in "Rocket Engineer" and the University of Chicago with a Ph.D. in Applied Mathematics. For 12 years he worked in the US as a consultant and financial engineer, 7 years he taught at the School of Business of the University of Chicago. He has been working on the Russian stock market since 2004.
The top management of the company does not have significant expertise and experience in the creation and management of payment systems. In addition, the company does not publish any information about the number of developers, as well as their educational and professional experience, which significantly complicates the assessment of the technical component of the project.
In terms of very aggressive marketing strategy and the goal to make financial system more transparent, the absence of any information about current or potential partners sounds very strange.
There are two possible explanations. In our opinion, both of them are not positive. First, the Company still does not work with any partners or the negotiations at a very early stage. It means that the project does not have any support in MLM or cryptocurrency and blockchain society. Second, the Company does not plan to work with partners. We hope that this scenario is far from the reality. If it is true, a long-term development of the project looks impossible.
ICO marketing strategy
It is very difficult to estimate the absolute amount that the Company invests in its marketing. In our opinion, the numbers have to be impressive due to global coverage of the project and previous experience of financial pyramids creation by the Company’s founder.
MAVRO has the wide net of it representatives in the world. They are responsible for attracting potential holders of MAVRO coins. Every person may contact them via social networks. The Company has pages in the most popular social network to contact with its potential investors. The list of social networks includes WeChat, Telegram, Facebook, Twitter, Instagram, VK, Youtube and etc. Also, everyone can subscribe to its newsletters via personal e-mails.
Additional attraction driver is the bonuses system that the Company implements. A 5-level referral system that will provide additional tokens to investors, who attract additional holders. So, the MAVRO platform as the platform for MLM companies uses MLM approach to increase the number of its platform and application users. Details and terms of bonuses program you may find on the Company’s website.
Marketing after the project start
If the Company really wants to modernize payment solution of MLM companies, it change pre-ICO marketing strategy of attracting individuals and start negotiations process with leaders in MLM market. Only joining of large companies may boost real work of platform and application, because without real deals and transaction this service will be useless.
At this moment, the Company does not publish any information about contacts and status of relations with any MLM companies. It means that it will spent time and additional financial resources to attract companies with client bases and transaction pipeline.
The Company has very aggressive marketing strategy of involving many individuals to join ICO, but does not pay any attention of building relation with real business partners, who are the target users of the MAVRO platforms (as the Company claims).
After profound analysis of the project, we underline risks related with technology, management and strategy.
Technology. At the current moment, the Company does not provide any prototype of its platform or application based on blockchain. According to project roadmap, MAVRO protocol, wallet and application will be launched in the Q3 2018. The developers have only two quarters for finishing its product and testing it.
Management. Top-management has very bad reputation in financial sector. Especially it main founder Mr. Mavrodi has been already in the center of numerous scandals related with financial pyramids. The Company does not provide any information that may help investors to understand that this project is real business and has differences with previous projects of Mr. Mavrodi. His other partners do not have sufficient experience and reputation in ICO and Blockchain field. In our opinion, poor management may be the key problem of project development.
Strategy. Company’s goal to change whole MLM industry looks too ambitious. Now the Company covers only emerging and African countries. Citizens of these countries have lower paying capacities. The project will face business growth issues due to limited number of solvent participants of MLM network.
Among different investor risks, we would like to highlight two risks: default and fraud.
Scam. In the case of this project, investor may lose all its money because the previous projects of MAVRO founders became financial pyramids. The strategy and business model of the current project looks the same.
Default. With high probability the project do not reach its commercial potential due to unclear strategy and poor management. That is why token investors may face the issue of low demand from new platform customers. This scenario may be fulfilled due to the absence of partners and corporate clients (global MLM companies with the presence in emerging countries and Africa).