Processing Your Payment

Please do not leave this page until complete. This can take a few moments.

October 16, 2019

Ideanomics CEO: $400M+ Fintech Village plans to be aired soon

Ideanomics CEO Alf Poor during his Oct. 15 visit to the Hartford Business Journal.
By Matt Pilon

West Hartford and the surrounding region could soon have a much more detailed picture of a $400 million-plus financial technology campus envisioned for the former UConn campus in West Hartford.

Alf Poor, CEO of Ideanomics, the publicly traded financial-technology, or fintech, company based in New York and China that bought the UConn campus a year ago for $5.2 million, said in an interview Tuesday that his company expects to submit a formal site plan for “Fintech Village” to West Hartford’s planning and zoning board before year’s end.

That application, related to a needed zoning change for the buildout of the campus, would spark an involved public approval process.

It would be the first detailed look at Fintech Village, though Ideanomics says it based a fly-through tour of the project released back in July, on its draft plans.

When the project was first announced during the summer of 2018, Bruno Wu, then-CEO and now-chairman of Ideanomics, said he hoped to move at least some of Ideanomics’ vast array of subsidiaries to West Hartford by the end of that year.

It turns out that was overly optimistic.

Ideanomics discovered more contamination than expected once it closed on the sale of the property. That led to delays, as the company sought to work out cleanup responsibilities with the state, which pledged a $10 million incentive deal originally negotiated by the Malloy administration.

“It is possible to break ground in 2020,” Poor said during his visit Tuesday to the Hartford Business Journal. “I don’t think it’ll be in the early part of the year, of course.” 

Fintech Village aims to house Ideanomics’ operations as well as housing and workspace for incubator companies. There will also be planned space for third-party technology tenants interested in working with Ideanomics and its fledgling startups, Poor said.

If the entire project is built out as envisioned, Poor said 1,000 people could work on the campus, including 70 to 100 Ideanomics employees, some of which would be relocated from its companies in China, Israel, the U.K. and Ukraine. 

Remediation of asbestos and PCBs at the campus, underway since July, continues. The asbestos removal is particularly time-consuming, Poor said.

"So that’s been a much more slow, painful process, that’s why we’re three months in,” he said.

Discovering more contamination than originally expected spurred Ideanomics to alter its plans for the campus. It’s now seeking to demolish more buildings than it had first proposed. That ultimately adds costs, but will lead to a faster cleanup, Poor said.

The first of those teardowns, the former School of Social Work, was approved by local wetlands officials earlier this month and is expected to commence in the coming weeks.

The contamination levels gave Ideanomics’ management and investors pause, at the time potentially endangering the project’s future, Poor revealed in the interview.

“That was where we saw a lot of internal challenges, a lot of investor challenges,” he said. “I think a lot of corporations would have shied away.”

Ultimately, Poor said it was Wu who did the necessary convincing, even offering to cover certain costs himself should the project get too pricey for shareholders.

“I think that continued to give us the tailwind we needed to get through it,” said Poor, who described Wu as “a gift to the company and its shareholders.”

Wu, who along with his wife Yang Lan had an estimated net worth of $1 billion in 2016, according to Forbes. He is Ideanomics’ largest stock owner, controlling nearly one-third of shareholder votes as of March, according to U.S. Securities & Exchange Commission (SEC) filings. (Ideanomics’ second biggest board-member shareholder is Shane McMahon, former executive of Stamford-based World Wrestling Entertainment and the son of former U.S. Small Business Administration administrator Linda McMahon.) 

Wu has kicked in millions of dollars to Ideanomics in the form of convertible notes, Poor said.

That’s a major reason Poor says he is unconcerned that Ideanomics reported having just $1.1 million in cash and equivalents on hand at the end of June. That led the company to conclude in an SEC filing that there is “substantial doubt” about its ability to continue.

“Bruno Wu is our chairman, he will capitalize the company, he has gone on record saying he will,” Poor said Tuesday. “By and large, if we need money we have an open note with Bruno and he will put money in.”

Rendering | Ideanomics/Newman Architects
A virtual view of Ideanomics' Fintech Village in West Hartford, a still from a virtual fly-through tour released last summer. Formal development plans were never filed, and now the project appears dead.

After the Department of Economic and Community Development announced the Ideanomics project last year (when the company was still called Seven Stars Cloud Group), Senate Minority Leader Len Fasano quickly criticized the decision to award millions of dollars in forgivable debt tied to creating 330 jobs, pointing to what he viewed as Ideanomics’ unstable balance sheet.

DECD defended its decision, and the new administration, under Gov. Ned Lamont, has opted to keep the deal in place, following negotiations earlier this year over remediation and other details.

While Ideanomics has a wealthy leader in Wu, Poor said his own role is to run the company as lean as possible as it transitions its business model away from a legacy media operation and towards using artificial intelligence and blockchain technology to make securitizations and asset trading more efficient in segments such as financial services and electric vehicles.

“We've been putting the pieces of the puzzle together,” he said.

Poor said he hopes the company’s business wins in China -- including providing underwriting and marketing of asset-backed securities that will fund a government-mandated electric bus project there -- will eventually help raise Ideanomics’ lagging share price, which closed at $1.47 per share on Tuesday.

The transition in its business model has been bumpy. Ideanomics posted a $27 million loss in 2018, despite initial expectations that it would earn $35 million.

However, the company has reported profits through the first half of 2019, and its third quarter earnings report is due out in November.

Sign up for Enews

Most Recent

Most Recent

0 Comments

Order a PDF