Tranched, a real-time on-chain embedded asset-based financing platform, has raised $3.4 million in a seed round. Speedinvest led the round, which included participation from a16z’s Crypto Startup Accelerator (CSX) program and investments from Blockwall, Kima, and OVNI Capital.
Tranched’s platform, designed to connect originators of credit products with institutional investors, reduces the cost and time-to-market for these transactions. The funding will further enhance Tranched’s platform with additional features as it plans to expand globally, serving lenders, credit funds, asset managers, and banks.
Key challenge – streamlining the financing process
Founded in 2023 by Clement Larrue and Michaël Elalouf, Tranched is a SaaS solution that automates the complexity of financing transactions between FinTechs and investors. The technology is designed to reduce the friction and costs associated with setting up and operating these financing transactions, which compete directly with traditional banking giants like HSBC, Barclays, and Lloyds.
In an interview with TFN, Elalouf described Tranched’s approach as ‘comprehensive’ and ‘end-to-end’, handling the entire value chain from the FinTech to the investor. The technology is not just about reducing friction and costs but about transforming the way we think about and operate financing transactions.
Tranched’s flexible and accessible financial products are setting new industry standards. The platform fully embraces and complies with existing regulations, using methods compliant with securities laws rather than involving crypto assets. In fact, the company can save lenders and their customers significant time and resources by streamlining processes, increasing transparency, and reducing the need for intermediaries and high fees. As a vivid example, Tranched has reduced some of these costs by up to 90% in initial transactions.
Transforming asset-based lending with tokenisation
Tranched uses blockchain technology to directly connect lenders to investors by applying tokenisation at a deeper level than the industry has seen. Elalouf shared with TFN: “We will focus on transforming asset-based lending through tokenisation, leveraging blockchain technology to directly connect lenders and investors, improve liquidity, and enable more efficient secondary market trading.”
The platform sets up a dedicated protocol for each facility, tokenising the originator’s receivables as they arise and verifying their eligibility instantly. A suite of smart contracts is then deployed to enforce tailored borrowing base and waterfall rules over the pool of tokenised receivables and the cash flows they generate, following institutional standards.
This approach allows Tranched to make the assignment of finance receivables visible and verifiable on-chain while automating the complex asset-based facility processes that institutions rely on when investing. Repayments, balance updates, and any arrears are updated instantly, leaving a permanent record for investors to access reporting information without manual updates, ensuring transparency and security.
Expanding reach and embracing new technologies
Tranched’s long-term vision is to scale its comprehensive, end-to-end platform to finance as many loans and assets as possible. Olga Shikhantsova, Partner at Speedinvest, said: “Tranched represents the tool most fintechs have been dreaming of to attract financing more efficiently to fuel further growth. This will support hundreds of fintechs globally that have been underserved by traditional investors over the last decade. We are excited to partner with the Tranched team on this exciting next stage of their development.”
Additionally, Tranched aims to embrace the development of Central Bank Digital Currencies (CBDCs) and the adoption of stablecoins to further simplify the lending infrastructure by enabling flows to operate entirely on-chain. The company will also continue to support ESG initiatives in the asset class by providing transparency on underlying loan data, such as carbon emissions, to help institutions track their exposure.
Tranched’s objective is to codify and optimise the lending market to provide better outcomes for end investors, like pensioners, and end borrowers, such as small businesses and consumers. However, for this to come true, the company must provide robust data, case studies, and a clear roadmap to demonstrate its ability to drive such transformative, system-wide change in the complex lending industry.
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