# Landscapes This section dives deeper into the 3 landscapes that Revflow will operate across: * Financing Landscape * Subscription Landscape * DeFi Landscape ### Financing Landscape The COVID-19 Pandemic saw a huge increase in SME loans as businesses faced reduced cash-flows and needed capital injections to survive. Government-backed loans saw a 110% YoY increase in 2020 whilst direct lending to SMEs saw a 17% YoY increase. 2020 and 2021 also saw the rise of the 'pandemic entrepreneur'; furloughs, layoffs and lockdowns gave people the time to start their own businesses, with 4.4 million new businesses created in the United States alone (a 24.3% increase on 2019 figures). As we begin to emerge on the other side of the pandemic and enter an even more volatile economic period, businesses will require more financing, opening up opportunities for new specialised lenders to enter the marketplace and provide innovative types of financial products to fit the needs of modern businesses. With that said, an emerging, innovative asset class is gaining popularity amongst investors quickly: [Revenue](https://www.institutionalinvestor.com/article/b1wh288400nrv0/How-a-New-Asset-Class-Is-Growing-Out-of-Subscription-Revenue). Thanks to innovations in integrations and open banking, lenders can plug into a business's financial information in near real-time to evaluate their eligibility for a variety of financial products. These innovations are in turn, opening up revenue as an asset class. The Revenue-Based Financing market, which is just one way of structuring the lending of capital against revenue, [had a market size](https://www.alliedmarketresearch.com/revenue-based-financing-market-A07537) of $901.4 million in 2019, and it's expected to grow to $42.3bn by 2027 (a CAGR of 61.8%). RBF typically happens by lending off the balance sheet, with the newer players taking on large amounts of venture debt to finance these operations. An alternative form of lending capital against revenue comes in the shape of a market-making platform (this is how Revflow operates). Specifically aimed at subscription-based businesses, or any business that adopts a monthly/quarterly-based payment option, these platforms allow businesses to package up their future monthly recurring revenue contracts and trade them for the yearly amount upfront, minus a pre-determined discount rate. Businesses can get a large cash injection quickly, whilst investors get a predictable stream of yield every month for the duration of the trade, all without debt on the balance sheet or equity dilution in the business. Revflow builds upon this concept by expanding the offering to retail investors, whom invest in a liquidity pool that fills the senior tranche of trades, generating a stable yield in the process. ### Subscription Landscape As stated in the introduction, the subscription economy has grown significantly thanks to the benefits they give to both consumers and businesses. Whilst everything around you may seem like it's already been 'subscriptionised', UBS's research shows that the global subscription economy is still in it's early growth stages. Again, the subscription economy has revenues of $650bn in 2020, and it's expected to reach $1.5tr by 2025, representing a CAGR of 18%. Most notably, eCommerce subscription revenues are expected to grow the fastest, from $225bn in 2020 to $687bn in 2025, with a current estimated market penetration of just 5%. Additionally, another reason for the growth in the subscription economy is technological innovation, which has lowered the barrier to entry for new businesses. You no longer need a computer science background to code a website, or years spent as a designer to create a product. Nowadays, you can create full-stack applications through no-code, design compelling products and interfaces using easy-to-use software, and even have AI write copy, blog posts and adverts for you. Couple this with near unlimited online tutorials on almost any tool you can think of, and you quickly end up with an empowered population who can validate and bring their ideas to life quickly. ### DeFi Landscape DeFi, or Decentralised Finance, has experienced explosive growth over the past 2 years. But what is it? DeFi is the umbrella term for peer-to-peer financial services offered on public blockchains. It is an entire financial ecosystem that doesn't rely on centralised institutions, such as banks, to validate transactions. Because of this, DeFi users can get better rates on lending, borrowing, saving and trading than they could with traditional finance (TradFi) businesses - not to mention many of the manual processes within TradFi are fully automated in DeFi. Additionally, it's free, fair and open to all - allowing people with limited access to current TradFi services (i.e. the unbanked, people and businesses in developing nations etc.) to participate in the global financial ecosystem. DeFi is also very quick; transactions take less then a few minutes depending on the blockchain (Solana is a few seconds!), and there's no hefty amounts of paperwork to process before completing transactions. So with the above stated, it's no surprise that the DeFi market has boomed, with the Total Value Locked in protocols rising from $1bn in February 2020 to over $200bn by May 2022 and DeFi user counts rising from 250,000 to 4,500,000 in the same time period. The future for DeFi is bright, with governments around the world embracing the change. Here in the UK, the government are looking to make the nation a [global cryptoasset hub](https://www.gov.uk/government/news/government-sets-out-plan-to-make-uk-a-global-cryptoasset-technology-hub) whilst bringing in regulations to allow stablecoins to become a legal payment. Many institutions and corporations still haven't quite grasped the implications that DeFi will have, and we'll be seeing many new innovative protocols appear over the coming years that commoditise financial services, abstract complexity away and empower billions around the world to generate yield far higher than current TradFi services can offer. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://revflow.gitbook.io/revflow/whitepaper/landscapes.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. 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