Credix raises $2.5M to disrupt the global debt capital markets

We’re excited to announce the successful raise of $2.5 million in early-stage seed round funding from some incredible investors and builders. The round was led by DRW Cumberland and ParaFi Capital and joined by the Transfero Swiss BRZ Solana Ecosystem Fund, Solana Ventures, Parrot Finance, MGNR, Mercurial, Petrock Capital, Fuse Capital, and several angel investors.

From the very beginning, the Credix team has been building the bridge between decentralized finance and real-world assets. We have been laser-focused on bringing uncollateralized loans to the emerging markets, starting with Latin America. Today we’re excited to announce more details about our product, team, and investors.

“ParaFi is excited to back Credix in connecting real-world finance with DeFi, and in supporting the team’s mission of improving access to credit and promoting financial inclusion in emerging markets. Credix is tackling an underserved and quickly growing market with FinTechs and non-bank loan originators in Latin America and can help cut down on the inefficiencies in traditional finance. — Mika Honkasalo, Technical Researcher at ParaFi Capital”

The Status Quo

Within Latin America (Credix’s start focus), about 50% of the people are unbanked and credit card interest rates can reach up to 250% per year. Many FinTech companies (e.g. neobanks, loan originators, lenders, etc.) tap into this market to solve these problems. Unfortunately, they have their own challenges in regard to debt financing. They can’t access the global debt capital markets and local banks will not provide them any financing. Finding funding and liquidity for them is expensive, time-consuming, and the process is extremely bureaucratic.

Meanwhile, crypto -and DeFi are growing quickly. Staking, pooling, and farming allow you to generate positive income on your assets. The team at Credix loves these protocols but they come with their own challenges. Most DeFi products are built by traders for traders; allowing them to keep exposure to crypto-assets and trade with massive leverage. Borrowing and lending need to be over-collateralized. For example, if you want to borrow $75 worth of USDC (a crypto dollar-backed 1-to-1 by a physical dollar), you have to put $100 worth of Solana as collateral.

At Credix we are building the bridge between those two worlds. Breaking down the barriers of entry, driving adoption, and driving more inclusive capital-efficient access to financing.

A55 is thrilled to announce its new partnership with Credix. Leveraging decentralized finance (DeFi) and blockchain technologies to provide more efficient debt financing and help a55 to scale within Latin America. We are excited about this partnership and the many opportunities of growth.” — Hugo Mathecowitsch, Founder & CEO, a55

The next frontier of decentralized finance

The rise of DeFi, crypto and stablecoins provided Credix with all the required lego blocks to rethink the end-to-end debt capital markets flow. Credix is democratizing access to credit investing for both borrowers and investors by connecting them through a decentralized credit marketplace.

Borrowers on the Credix protocol are high-quality FinTech lenders in emerging markets. They are vetted by our underwriters and need to pass our stringent eligibility criteria. To reduce risk, the loans are collateralized by real-world assets such as receivables, guarantees, and/or cash. Once approved they can create a credit deal (e.g., credit terms such as interest rate and time to maturity) on the platform; these deals tend to have a stable yield (14–15%) that is not related to any crypto volatility. Interest is repaid monthly into the liquidity pool and principal at maturity.

Investors can get access to these high-quality opportunities on a deal-by-deal basis or via our liquidity pool which diversifies across all deals. So, how does this work?

First, underwriters (e.g., institutional investors) do the due diligence based on the borrowers’ data (historical loan portfolio data, company financials, etc.). If an underwriter decides that the deal looks interesting, they stake USDC in the deal’s junior tranche. Hereafter, the senior tranche will be automatically funded by our liquidity pool. Liquidity providers receive Liquidity Provider Tokens (LPT) whose price is reflected by the Net Asset Value of our credit fund. When both tranches are funded, the deal goes live and the borrower receives the principal amount in USDC. From there on, the borrower performs monthly repayments through the platform and pays back the principal at the end of the tenor.

So what are the advantages of Credix?

• Credix allows access to high-yielding investment opportunities that are uncorrelated to any crypto volatility and otherwise difficult to invest in
• Credix enables borrowers in emerging markets cheaper, faster, and more efficient access to credit
• Credix kicks off the decentralization of the debt capital markets. Democratizing the investment opportunities and access to capital

The Team

The Credix core team has spent the last years pushing the boundaries of finance and blockchain application development. Most recently they worked together at IntellectEU where Thomas led the blockchain and crypto team, Chaim ran emerging markets business development, and Maxim product engineering & AI. Together they grew an 80+ world-class engineering team, launched three B2B FinTech platforms, and performed millions in revenue.

Beyond the core team, Credix also had the pleasure to onboard four members to its advisory board, an esteemed group of industry leaders. They provide strategic guidance to the team and extend connectivity across technology, financial services, and crypto.

• Chike Ukuagbu, Head of Crypto Strategy-Emerging Markets at Visa
• João Bezerra Leite, Former Managing Director and CTO at Bank Itaú
• Reginald de Wasseige, Investor at Augmentum
• Kenneth Bok, Managing Director Blocks, ex Goldman Sachs

“As an advisor to the team, I’ve been surprised by the speed of execution of Thomas and his team. The difficulty in accessing credit is one of the biggest social issues in emerging markets. Credix allows local FinTech companies to connect with global capital via blockchain technology, creating more efficient, transparent, and fair markets.” — Chike Ukaegbu, Head of Crypto Strategy — Emerging Markets, Visa

What’s next?

We will use our funding to speed up the release of the Credix closed alpha version and the launch of the protocol on Solana mainnet.

“We firmly believe that blockchain technology has the vast potential to disrupt the global debt capital markets. By bridging the world of decentralized finance with real-world assets we can unlock huge value for the market. With the confidence and commitment of our investors, we will be even better positioned to accelerate our mission to democratize credit investing with a positive impact.” — Thomas Bohner, Founder & CEO, Credix

Over the next few weeks, we’ll be launching our first credit lines with multiple high-quality borrowers in Latin America. We will be extending access for underwriters and liquidity providers into this permissioned pool over the first quarter of 2022, growing our total value locked and outstanding credit. This permissioned pool will feature a limited set of prime credit deals carefully selected by the Credix team and our team of underwriters. Our pool will be opened to the community within H1 of 2022.

Want to learn more? Follow us on Twitter and join our official Discord channel for the latest updates.