Untangled Finance raises $13.5M to provide blockchain-based institutional-grade credit access
Untangled Finance, a London-based financial technology outfit that focuses on tokenizing real-world financial assets using blockchain technology, today announced that it has raised $13.5 million in a strategic funding round led by Fasanara Capital.
Established in 2020, Untangled provides a platform provides the capability to tokenize real-world private credit assets, such as business loans and invoices, into blockchain tokens that can represent on-chain structured credit pools. These can then be bought, sold and traded as collateralized debt notes in decentralized markets or by traditional investors.
By opening up this opportunity, Untangled says, it has created a whole new market with more favorable borrowing terms for suppliers of debt and it also allows for easier flow of capital across international boundaries.
Part of the reason for this is because with the use of blockchain technology, tokenized assets are tracked using widely distributed ledger technology that is readily audited, difficult to counterfeit and transactions settle near instantly. This reduces the amount of paperwork needed to execute trades across borders, which makes it easier to promote transparency and adhere to regulations.
Since launch, Untangled has concentrated on private credit markets and the company said that it found the most utility in decentralized finance, which is a type of nontraditional market that uses blockchain technology to eschew intermediaries. Market makers employing DeFi use smart contracts, self-executing pieces of code, that trigger token trades based on certain conditions, in order to make deals that operate on their own, without the need for individual brokers or banks.
Using its protocol, businesses and financial institutions get access to a greater ability to liquidate their credit and debt including an automated “liquidation safeguard.” Untangled developed a liquidation framework for real-world assets, or RWA, that watches the quality of loans in an asset pool that will automatically auction if it falls below a certain point.
“From the outset it has been important for us to have liquidation as a built-in feature of our protocol, not an afterthought,” said Untangled Finance co-founder Quan Le. “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.”
The global private credit market has surpassed $1.5 trillion, but decentralized finance only covers about $500 million in total. As a result, there’s still a great deal of room to grow, Untangled said. The company envisions DeFi gaining a great deal of ground and capturing a greater share of that market for investors.
Through the new partnership with Fasanara, the protocol will also gain access to more than 130 verified asset providers and institutions that extend credit, such as banks, businesses and lenders across 60 countries. That will provide prospects for institutional-grade assets, traditionally open only to major financial institutions for investors, who can choose among originator-specific pools or opt for passive gains via automated lending pools.
“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,” said Untangled co-founder Manrui Tang.
Untangled Finance will be launched on the Celo blockchain in early October. The Polygon blockchain and Ethereum via Chainlink’s Cross Chain Interoperability Protocol will follow shortly thereafter, which will make Untangled a multichain real-world asset tokenization protocol.
A message from John Furrier, co-founder of SiliconANGLE:
Your vote of support is important to us and it helps us keep the content FREE.
One click below supports our mission to provide free, deep, and relevant content.
Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.