Untangled Finance, a London-based fintech, has raised €12.8 million in multi-year strategic funding to accelerate its mission to bring institutional-grade credit with a built-in liquidation mechanism on-chain. Fasanara Capital, the fintech investment platform and lending pioneer, is the lead investor in the round.
Established in 2020, Untangled was founded by professionals with a decade-long background in finance, asset origination, and emerging markets. The platform’s protocol focuses on tokenizing real-world private credit assets, such as invoices and SME loans, into on-chain structured credit pools. These pools, in turn, facilitate the issuance of collateralized debt notes to both DeFi and TradFi investors.
Manrui Tang, Untangled Finance’s co-founder, said: “Since 2017, our focus has been on real-world asset tokenization where we see growing interest. Our partnership with Fasanara is a step towards developing reliable DeFi yield mechanisms, broadening the investment possibilities in crypto but also helping to mitigate its inherent volatilities, all while striving to make finance more accessible around the world.”
Large corporations have access to more favourable borrowing terms than many of their suppliers. While creditworthiness is a factor, information asymmetry, which is particularly pronounced for SMEs (especially those in emerging economies), contributes to the significantly higher funding costs borne by these SMEs.
Furthermore, the flow of capital across international boundaries remains inefficient: an investor in New York might face inherent challenges identifying and accessing credit investment opportunities in other regions, such as India.
Tokenization takes advantage of blockchain technology to bring traditional assets (Real World Assets or RWAs) on-chain. Tokenized RWAs offer fractional ownership, allowing for borderless access and reduced investment thresholds. It also offers enhanced transparency and security on the performance of the assets and keeps an immutable record of transaction history.
Francesco Filia, CEO and CIO of Fasanara Capital, added: “We see an upcoming merging of worlds, on one side, fintech lending which fills the gap in underserved SME and consumer markets and, on the other, the way values are being transferred within the new world of digital assets. The Untangled team has a rare combination of being rooted in real world finance and yet has acquired deep expertise in blockchain and DeFi. We are looking forward to working with Untangled to engineer these entirely new financial rails so, for the first time, being able to handle users at scale.”
Untangled Protocol concentrates on private credit markets, seeing the most utility for Defi in this area. Through its partnership with Fasanara, the protocol will have access to more than 130 verified asset originators spanning 60 countries, offering investors the opportunity to access institutional-grade assets, traditionally exclusive to major financial institutions. According to an individual investor’s risk appetite, they can choose between originator-specific pools or opt for consistent, passive gains via automated lending pools.
Untangled Finance will be launched on the Celo blockchain in early October, followed by Polygon and Ethereum via Chainlink’s Cross Chain Interoperability Protocol (CCIP), making Untangled among the first multichain and interoperable RWA credit protocols.
Read the orginal article: https://www.eu-startups.com/2023/10/london-based-fintech-untangled-finance-bags-e12-8-million-to-bring-institutional-grade-private-credit-on-chain/
