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London Tech Week

Untangled Finance raises $13.5M to bridge real-world assets with DeFi

Untangled Finance founders
Picture credits: Untangled Finance

Untangled Finance, headquartered in London, operates a platform facilitating the tokenisation of real-world assets, such as invoices and SME loans, into on-chain structured credit pools (in simple words, it has created a platform that turns real things like invoices and small business loans into digital assets on a network). 

In a recent funding milestone, the company successfully secured $13.5 million in a seed funding round. The round was led by London-based fintech VC, Fasanara Capital, known for their investments in notable startups such as Scalapay and Lendable, showcasing their continued support for fintech firms. The new funding will be directed towards product development, ecosystem incubation and growth initiatives.

Founded in 2020, Untangled Finance allows its users to access liquidity from their RWAs without selling them, while also gaining exposure to the wider DeFi ecosystem.

Untangled Finance offers two types of exposures to asset pools, actively managed accounts, and passively managed accounts. The former allows institutions and decentralised autonomous organisations (DAOs) to create customised lending strategies based on their risk appetite and return objectives, while the latter allows users to choose from predefined asset pools with fixed terms and conditions.

The platform claims to provide various benefits, such as optimising returns from uncorrelated RWAs while reducing crypto concentration risk, exiting lending positions through refinancing or liquidating asset NFTs, lending and borrowing against the entire portfolio under user-defined terms, and complying with regulations such as anti-money laundering (AML), know your customer (KYC), and investor accreditation.

Other benefits include, protecting lenders through recognised legal structure and jurisdiction, earning yields from well-understood RWAs while gaining exposure to wider DeFi, reducing costs, or creating new products and services based on a new financial rail, and leveraging the efficiency, transparency, and automation of DeFi.

The platform also boasts of its composability with the rest of DeFi and interoperability cross-chain, meaning that users can seamlessly interact with other protocols and platforms across different blockchains.

Manrui Tang, Untangled Finance’s co-founder said, “Since 2017, our focus has been on real-world asset tokenisation 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.”

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.”

Bridging the technology gap

The global financial market is huge, worth more than $300 trillion and Untangled Finance, along with other platforms dealing with Real World Assets (RWA), aims to connect the everyday world with the digital world. 

For those who want to know, Untangled was founded by Manrui Tang and Quan Le. They have a mix of experience in strategy, mergers and acquisitions (M&A), and getting assets started in different places worldwide. They first met while helping financial institutions during the big 2008 global financial crisis. They were the creators of asset tokenisation through Binkabi back in 2017. Quan has extra experience in agritech, where he worked on rice farming projects across 13 African countries. This helped him understand the challenges SMEs face in terms of supply chain and financing.

The co-founders said in the company press release, that they are excited to bring RWAs to DeFi and create a new paradigm for asset-backed lending. They also said that they are looking forward to working with their investors and partners to grow the platform and expand its offerings.

Quan Le, Untangled Finance’s co-founder said, “From the outset it has been important for us to have liquidation as a built-in feature of our protocol, not an afterthought. Together with institutional-grade assets, we hope to contribute to the RWA ecosystem by further developing its liquidation infrastructure that will help this new market to scale.”

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