DeFi Fintech Credix has raised US$2.5 M to offer cheaper and uncollateralized loans for emerging markets

December 21, 2021
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Focused on uncollateralized loans in Latin America, Credix says it wants to bridge decentralized finance with traditional finance

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Credix, a new fintech challenger on the Blockchain space, announced on Tuesday that it has raised a $2.5 million Seed round from DRW Cumberland and ParaFi Capital. Solana Ventures, Transfero Swiss BRZ Solana Ecosystem Fund, Petrock Capital, Fuse Capital, MGNR, Mercurial, Parrot Finance, and several angel investors, also participated in Credix’s fundraising. The fintech‘s strategic advisors include amongst others Chike Ukaegbu, head of the crypto strategy emerging markets at VISA, and Joao Bezerra, former managing partner of LatAm’s largest bank, Itau.

Set to go live in January 2022, Belgium-based Credix has a strong focus on Latin America, where it already has four credit fintechs as clients, and another 15 committed to using Credix’s debt funding platform across the region.

Chaim Finizola is the Chief Growth Officer at Credix. He has been working with Blockchain since he finished his master’s degree thesis around the Blockchain space in 2016. Half Brazilian, Finizola told LABS that giving his understanding of the LatAm’s largest market and the network he has built for years in Brazil, he has learned that it’s extremely expensive to get credit in Brazil, compared to western countries like Belgium. So, that’s when he and his partners decided to provide decentralized capital globally to be able to offer cheaper and uncollateralized loans for emerging markets.  

“I’ve started talking to a lot of people in Brazil, Chile, Nigeria Singapore, and we saw that it was not really the end-user that we wanted to reach because there are different regulations,” he explains.

So going for a marketplace focusing on Brazil‘s great fintech world leveraged the firm to its B2B model. “In Brazil, there are very niched lines of credit, and for these fintechs to provide credit is very difficult because they get this credit from incumbents. There’s the need for more liquidity and financing in emerging markets and the banks decide who they will provide credit to.”

Credix focuses on providing financing for these credit fintechs. As these credit fintechs already do the risk scoring and already have the client, Credix wants to be “the missing piece” of a decentralized marketplace.

It works like this: a fintech comes to Credix’s marketplace and says that it needs 1 million dollars or reals in two weeks, for instance. Investors (funds, banks, high net worth individuals) can come to the platform and be the underwriters to invest in the specific credit line.  

“We’re democratizing not only the borrowing side for the end-users to get cheaper access to credit but also from the investment side we are democratizing investment,” he says. It’s like Brazil‘s FIDC (acronym in Brazilian Portuguese for investment funds in credit rights, a widely popular type of investment in Brazil‘s credit market). The difference is that in Brazil each company needs to create its own FIDC, which may take time and be more expensive, according to Finizola.

The company has offices in the United States and in Brazil, where it’s focused. It also plans to work in Mexico, South Africa, and Singapore.

The startup has six people working today, but it should double the team in the next months, according to Finizola, even though he says he doesn’t want such a big team. “We think it’s important to have a very good and professional team, but a small one.”

At first, Credix will work with tickets of about $1 million, but it also focuses on raising that to $10 to $20 million.”It’s an entirely decentralized finance platform. We are really trying to bridge DeFi and traditional finance for these fintechs to connect their loans with real-world assets, excluding volatility,” adds Finizola.

After getting the credit from these decentralized global financing platform, Credix will use stablecoins (cryptocurrencies pegged to the dollar) to be able to provide these resources in Brazil‘s reais for these fintechs, for instance. It means that borrowers, credit fintechs, and non-bank loan originators in emerging markets can borrow in USDC (a digital stable coin that is pegged to the dollar) using their off-chain loan book as collateral, which they can in return lend to their clients in their local currency.

“We are working in the legal structure because in the future we want to tokenize the receivables,” says Finizola.

Underwriters, institutional and qualified investors can invest in the fintech credit deals’ junior tranche on a case-by-case basis. Liquidity providers, institutional and retail investors on the other hand, stake in the liquidity pool, which acts as a fund allocated over the different deals’ senior tranches, diversifying the risk. For the investor, yield returns can be about 10 to 20%, according to Finizola.

The startup is planning to open up the liquidity pool during the first half of 2022.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Hub, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

Credix, a new fintech challenger on the Blockchain space, announced on Tuesday that it has raised a $2.5 million Seed round from DRW Cumberland and ParaFi Capital. Solana Ventures, Transfero Swiss BRZ Solana Ecosystem Fund, Petrock Capital, Fuse Capital, MGNR, Mercurial, Parrot Finance, and several angel investors, also participated in Credix’s fundraising. The fintech‘s strategic advisors include amongst others Chike Ukaegbu, head of the crypto strategy emerging markets at VISA, and Joao Bezerra, former managing partner of LatAm’s largest bank, Itau.

Set to go live in January 2022, Belgium-based Credix has a strong focus on Latin America, where it already has four credit fintechs as clients, and another 15 committed to using Credix’s debt funding platform across the region.

Chaim Finizola is the Chief Growth Officer at Credix. He has been working with Blockchain since he finished his master’s degree thesis around the Blockchain space in 2016. Half Brazilian, Finizola told LABS that giving his understanding of the LatAm’s largest market and the network he has built for years in Brazil, he has learned that it’s extremely expensive to get credit in Brazil, compared to western countries like Belgium. So, that’s when he and his partners decided to provide decentralized capital globally to be able to offer cheaper and uncollateralized loans for emerging markets.  

“I’ve started talking to a lot of people in Brazil, Chile, Nigeria Singapore, and we saw that it was not really the end-user that we wanted to reach because there are different regulations,” he explains.

So going for a marketplace focusing on Brazil‘s great fintech world leveraged the firm to its B2B model. “In Brazil, there are very niched lines of credit, and for these fintechs to provide credit is very difficult because they get this credit from incumbents. There’s the need for more liquidity and financing in emerging markets and the banks decide who they will provide credit to.”

Credix focuses on providing financing for these credit fintechs. As these credit fintechs already do the risk scoring and already have the client, Credix wants to be “the missing piece” of a decentralized marketplace.

It works like this: a fintech comes to Credix’s marketplace and says that it needs 1 million dollars or reals in two weeks, for instance. Investors (funds, banks, high net worth individuals) can come to the platform and be the underwriters to invest in the specific credit line.  

“We’re democratizing not only the borrowing side for the end-users to get cheaper access to credit but also from the investment side we are democratizing investment,” he says. It’s like Brazil‘s FIDC (acronym in Brazilian Portuguese for investment funds in credit rights, a widely popular type of investment in Brazil‘s credit market). The difference is that in Brazil each company needs to create its own FIDC, which may take time and be more expensive, according to Finizola.

The company has offices in the United States and in Brazil, where it’s focused. It also plans to work in Mexico, South Africa, and Singapore.

The startup has six people working today, but it should double the team in the next months, according to Finizola, even though he says he doesn’t want such a big team. “We think it’s important to have a very good and professional team, but a small one.”

At first, Credix will work with tickets of about $1 million, but it also focuses on raising that to $10 to $20 million.”It’s an entirely decentralized finance platform. We are really trying to bridge DeFi and traditional finance for these fintechs to connect their loans with real-world assets, excluding volatility,” adds Finizola.

After getting the credit from these decentralized global financing platform, Credix will use stablecoins (cryptocurrencies pegged to the dollar) to be able to provide these resources in Brazil‘s reais for these fintechs, for instance. It means that borrowers, credit fintechs, and non-bank loan originators in emerging markets can borrow in USDC (a digital stable coin that is pegged to the dollar) using their off-chain loan book as collateral, which they can in return lend to their clients in their local currency.

“We are working in the legal structure because in the future we want to tokenize the receivables,” says Finizola.

Underwriters, institutional and qualified investors can invest in the fintech credit deals’ junior tranche on a case-by-case basis. Liquidity providers, institutional and retail investors on the other hand, stake in the liquidity pool, which acts as a fund allocated over the different deals’ senior tranches, diversifying the risk. For the investor, yield returns can be about 10 to 20%, according to Finizola.

The startup is planning to open up the liquidity pool during the first half of 2022.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.
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Segmento:
DeFi 👾
País de origen:
Headquarters:
Sao Pablo
Monto inversión:
2.5
M
Ronda financiación:
Seed
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