Bank loans are difficult to obtain and prohibitively expensive in rapidly emerging economies such as Brazil. Interest rates on personal, credit card, and student loans can reach 100% per year. As a result, thousands of smaller lending companies have sprung up, lending more than $10B at lower interest rates. Access to international capital was previously unavailable, forcing smaller lenders to seek funding on their own.
Credix, a Belgian fintech, has raised €11.32M in funding to connect institutional investors from all over the world with lenders in emerging markets. Motive Partners and ParaFi Capital, both based in the United States, led the Series A round. Valor Capital, Victory Park Capital, MGG Investment Group, Circle Ventures, Abra, Fuse Capital, and Claure Group also participated in the round, as did angel investors such as Ricardo Villa Marina, chairman of Itau LatAm.
Fund usage
The additional funds will allow the startup to surpass the $100M mark and expand into Mexico and Colombia. Credit companies in several emerging markets, according to Credix, have borrowed more than $25M through the platform in recent months.
The marketplace, which was founded in 2021 by Thomas Bohner (CEO), Maxim Piessen (CTO) and Chaim Finizola (CGO), connects investors with credit companies in emerging markets where access to bank loans is still expensive and complicated.
Crypto investment
Surprisingly, investors are using cryptocurrency to invest in emerging markets. Before offering loans to their end customers, the credit company receives stable coins (crypto currencies that are linked one-to-one to US dollars and do not fluctuate in value) in its crypto portfolio and converts them into local currency.
“This Series A investment is truly strategic for us, attracting the best-in-class from the world of traditional finance and crypto. We are bringing onboard partners with deep expertise in emerging markets, private credit, and organized finance in order to build a scalable financial technology infrastructure,” said Thomas Bohner, Founder and CEO of Credix. “Furthermore, we want to scale our markets, from fintechs to themed markets, to syndicated markets and geographical markets. This investment will allow us to stay ahead of the competition and keep innovation on tech and legal aspects,” he added.
“Valor has been investing in the fintech space for over a decade now and understands the existing inefficiencies created by legacy systems and processes in financial markets. Blockchain and especially DeFi have the potential to create a more scalable, efficient, and cheaper financial markets infrastructure. We strongly believe that Credix is the best-positioned player to capture this opportunity”, said Michael Nicklas, Managing Partner at Valor Capital Group. “With this investment, Credix will be able to accelerate its pipeline of fintech clients and institutional investors, continuing to build a next-generation global infrastructure. Bridging DeFi with traditional markets is a key component of our crypto thesis, and we are happy to be a key partner for Credix in this journey,” he added.
