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BFD Expert Voices - Private Credit

BFD Expert Voices

Credix Finance, a blockchain-based loan financing platform for emerging market fintechs, raised $11.25 million in funding led by Motive Partners and Parafi Capital, Ryan writes.

Why it matters: By putting loan financing on the blockchain, Credix is hoping to provide more transparency and better access to capital for borrowers in emerging markets.

How it works: Credix created a platform to connect institutional investors like hedge funds, asset managers and family offices with fintech borrowers in emerging markets looking for access to capital.

Each loan is put on the blockchain and funded in USDC, which can then be converted into the borrower's local currency, and repayment is also done on-chain.

Investors can choose to analyze and underwrite loans individually or back a liquidity pool that combines several deals on the platform. 

To date, Credix has processed over $20 million in financing for Brazilian fintech firms such as A55, Provi, Tecredi, Descontanet, Divibank and Adiante.

Between the lines: “The moment our borrowers tokenize their debt, we create an on-chain bond where you can see all the terms: the interest rate, term to maturity, different tranches of that bond, and how the pricing is calculated,” Credix CEO Thomas Bohner tells Ryan.

What's next: The company plans to use the funding to expand beyond Brazil, its first market, into countries like Mexico and Colombia.

But beyond that, the bigger vision is to democratize access to financing.

“We're already doing that on the borrower side by providing these fintechs in emerging markets better access. But in the long term, we also want to provide access to retail investors to invest in these kinds of asset classes and products,” Bohner says.

Of note: Other investors in the round include Valor Capital Group, Victory Park Capital, MGG Investment Group, Circle Ventures, Abra, Fuse Capital, Claure Group and Itau LatAm chairman Ricardo Villela Marino.  

1 big thing: Blockchain loans for emerging markets

Illustration of a glowing blockchain block with cash inside.

The company behind 21Shares, the crypto ETF and ETP provider, has raised $25 million at a $2 billion valuation, it revealed Tuesday. 

Why it matters: U.K.-based hedge fund giant Marshall Wace led the round in the company, 21.co, signaling that traditional investors are still entering the space despite the downmarket, Lucinda writes.

Background: With over $55 billion in assets under management as of last year, Marshall Wace began moving into the crypto space in the summer of 2021.

That’s led to investments in Blockdaemon, Circle, ConsenSys and TRM Labs. 

Notably, Marshall Wace made very few private market investments before 2021, according to Pitchbook data.

Details: Founded in 2018, 21Shares has reached a peak AUM of $3 billion in November, largely by selling to European investors.

It is also trying to breach the U.S. market with a spot market bitcoin ETF in partnership with Cathie Wood’s Ark. But that effort remains in limbo with the SEC.

“Part of this is setting a valuation mark for our customers, for our team, for the industry,” co-founder Ophelia Snyder said. “It's important that [our customers] understand the size and stability of their counterparties." 

"If you think about this in terms of partnerships and recruiting — it plays an important part in business strategy," she said, adding that the company is profitable.

The big picture: 21.co also announced it has put 21Shares and sister company Amun (which focuses on token issuance) under one umbrella.

21Shares' parent gets a $2 billion valuation

2. The BFD: 21Shares' parent valued at $2 billion

Illustration of Benjamin Franklin peering out from behind a pile of crypto coins.

UBS no longer will pay $1.4 billion in cash to buy Palo Alto, California-based robo-adviser Wealthfront, Axios' Dan Primack writes. 

The mutual termination comes eight months after the merger was announced, with UBS (NYSE: UBS) now to invest $69.7m via a convertible note deal at around the same valuation.

Why it's the BFD: It's a big setback for the Swiss lender's efforts to broaden its client base, particularly in the U.S.

Cap table: Prior to the new investment from UBS, Wealthfront had raised around $200 million from Index Ventures, Ribbit Capital, Launch Fund, Social Capital, Tiger Global, Spark Capital, Dragoneer, DAG Ventures and Greylock.

Back story: A source familiar with the situation tells Dan the deal collapse came suddenly, as reflected by Friday night's terse announcement, with unspecified regulatory concerns being raised in just the past several weeks.

The bottom line: A merger collapse is hardly novel in 2022, but this one is a bit surprising in that Wealthfront is the rare tech company whose business benefits from rising interest rates. A unicorn, if you will...

3. Another dead deal

Illustration of a torn photograph of two hands shaking

FTC goes after Credit Karma for allegedly false “pre-approved” credit offers (FTC)

The agency alleges Credit Karma used claims that consumers were “pre-approved” to entice them to apply for offers that they ultimately did not qualify for. 

The order requires the company to pay $3 million that will be sent to consumers who wasted time applying for these credit cards.

El Salvador had a bitcoin revolution. Hardly anybody showed up. (Bloomberg)

A year after becoming the first nation to approve the token as legal tender, adoption has moved slowly and price declines have dampened early enthusiasm for the experiment.

Revolut under fire for U.K. audit flaws (Financial Times)

U.K. regulators are pushing the startup to improve its internal audit controls, saying it had an "inadequate" approach to revenue recognition and was at high risk for material misstatements.

Credit Suisse may cut over 5,000 jobs (Reuters)

The Swiss banking giant could cut 1 in 10 positions as part of a cost-reduction drive.

Binance to stop supporting USDC (Coindesk)

The crypto exchange said it will convert all investments in USDC, pax dollar (USDP) and TrueUSD (TUSD) into BUSD on Sept. 29.

4. Credit score

Illustration of a Scrabble board with letter tiles spelling "credit."

• Boopos, a Miami-based business lending platform, raised $58m in Series A and debt funding. Bonsai Partners led and was joined by Fasanara, Actyus and K Fund. https://axios.link/3BgmR33

• Billogram, a Swedish invoicing platform, raised 150 million Swedish kronas ($13.9 million) in funding led by Swisscom Ventures. https://axios.link/3D1NkD8 

• Edda, a Wilmington, Del.-based provider of software for professional investors, raised $5.8m from Mucker Capital, Plug&Play, FJ Labs and Future Shape. www.edda.co

• Ceezer, a Berlin-based carbon credit marketplace, raised €4.2m in funding. Carbon Removal Partners and Norrsken VC led and were joined by Picus Capital. www.ceezer.earth

• RiskSmith, a maker of portfolio tools for individual investors, raised a $1m in pre-seed funding. Mercury Digital Assets led. https://axios.link/3cR8NUy

• Wayflyer, an e-commerce financing firm, secured $253m in debt financing from Credit Suisse. www.wayflyer.com 

• Moneyflow, a Copenhagen-based embedded fintech startup, raised €250m in debt financing from Belgian banking-as-a-service provider Aion Bank. https://axios.link/3AMpIzs 

• Nectar, an Atlanta-based financing platform for real estate entrepreneurs, closed on a $25m credit facility from Coromandel Capital. https://axios.link/3RFcgEp 

• Plurall, a Colombian fintech focused on entrepreneurs, raised $20m in debt capital from Fasanara Capital. https://axios.link/3wYRlUG

• Jupiter Fund Management is seeking to sell a 10% stake in Starling Bank, the U.K.-based neobank last valued at £2.5b. https://axios.link/3qcdT0H

• BnkToTheFuture, an investment platform that allows clients to invest in crypto, has agreed to acquire Salt Lending. https://axios.link/3RnluVY 

5. Deals of the day

• Zepz Group, the parent company of WorldRemit, named former Bill.com COO Mark Lenhard as group CEO. https://axios.link/3B5zD4D 

• Sam Blond, previously CRO at Brex and VP of sales at Zenefits, is joining Founders Fund as a partner. https://axios.link/3x29QaZ

• Ark36, a Cyprus-based alternative investment cryptocurrency fund, promoted Anto Paroian to CEO; Despina Saphiris to risk manager, Tetyana Martynenko to MLCO officer, and Christos Krokides to portfolio manager. ark36.com

• Jill Sommers, a former Commodity Futures Trading Commissioner, has joined the board of FTX’s U.S. derivatives subsidiary. https://axios.link/3RmJ3hA 

• Lumera, a European insurtech firm, named Johan Rudén as its COO. https://axios.link/3qlekFL 

• Saudi Arabia’s Central Bank appointed Accenture’s Mohsen AlZahrani to lead its virtual assets and central bank digital currency program. https://axios.link/3eqSRZF 

• Lentra, an Indian lending infrastructure startup, named Haribandhu Patra as CFO and Bhuvaneswar Naik as the chief human resource officer. https://axios.link/3BgYZwg 

• Paysend, a UK-based money transfer startup, appointed Wilhelm Rohde as group CFO. https://axios.link/3Rluzia 

• Binance, a global crypto exchange, has named former Brazilian central banker and economy minister Henrique Meirelles to its board. https://axios.link/3RBtuT2 

• The European Investment Bank has appointed Kaisu Christie as its new group chief digital officer. https://axios.link/3RGNvYA 

• Bank of Ireland appointed Gavin Kelly as interim group CEO after Francesca McDonagh left the firm to join Credit Suisse. https://axios.link/3D0BmcJ 

6. It's personnel

OpenSea NFT volume fell 99% from its peak

7. Memes and mumbles

Welcome back from Labor Day weekend, Fintech readers.

⌨️ Special thanks to our amazing copy editor Carlos Cunha for his patience and diligence with every one of these we send!

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September 06, 2022

1 big thing: Blockchain loans for emerging markets