Untangled Finance, a fintech based in the UK, has successfully raised $13.5m to expediate its mission to introduce institutional-grade credit with an integrated liquidation mechanism on the blockchain. The funding round was led by Fasanara Capital, a fintech investment platform.
Untangled Finance is gearing up for its official launch on the Celo blockchain in early October. And it plans to expand to other blockchains such as by Polygon and Ethereum, using Chainlink’s Cross Chain Interoperability Protocol.
Established in 2020, Untangled specialises in tokenizing private credit assets like invoices and SME loans, converting them into on-chain structured credit pools. These pools, in turn, enable the issuance of collateralised debt notes to both DeFi (Decentralised Finance) and TradFi (Traditional Finance) investors.
Through its partnership with Fasanara, Untangled Finance gains access to a network of more than 130 verified asset originators spanning 60 countries. This collaboration offers investors the opportunity to tap into institutional-grade assets that were traditionally reserved for major financial institutions.
Untangled Finance argues that large corporations enjoy more favourable borrowing terms than many of their suppliers. Additionally, these corporations have greater access to information over SMEs (small and medium-sized enterprises), especially those in emerging economies. This contributes to the significantly higher funding costs for SMEs.
Furthermore, the fintech highlights the inefficiency of cross border money transfers. Investors in one location, such as New York, often face challenges when trying to identify and access credit investment opportunities in other regions, like India.
Manrui Tang, co-founder of Untangled Finance, expressed the company’s vision, saying “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.”
Francesco Filia, chief executive officer and chief information officer of Fasanara Capital, commented on the evolving landscape, stating: “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.”