Goldfinch's DeFi-protocol team, which provides collateral-free crypto-loans, has closed an $11m Series A funding round, led by Andreessen Horowitz (a16z).
We’re thrilled to announce 1.) We have raised $11M led by @a16z crypto, 2.) We’re announcing our Backer Program, and 3.) We can now point to the whitepaper that serves as the basis for the protocol. Thread https://t.co/u9ms8BUMG4
— Goldfinch (@goldfinch_fi) June 16, 2021
Mercy Corps Ventures, A Capital, Access Ventures and Divergence Ventures also participated in the round.
The San Francisco-based startup will use the funding to build a network of borrowers and lenders. Negotiations are underway with marketers and underwriters to expand its regions of presence.
The Goldfinch protocol is based on the concept of "trust through consensus". It involves assessing the creditworthiness of borrowers based on the opinions of other participants. The value of existing crypto-assets is not included in its calculation.
The resulting figure is then used to automatically distribute the capital provided by the lenders, allowing the latter to generate passive income.
The project's community of lenders consists of experts in traditional financial services, funds and crypto-enthusiasts.
The team sent the protocol code for an audit and promised to make the project more decentralised.
The project's founders, former Coinbase employees Mike Sall and Blake West, set out to democratise crypto-loans.
Goldfinch is targeting individuals and businesses in developing countries that are not always able to meet the collateral requirements for a loan. According to IFC, about 40% of micro, small and medium-sized businesses in such states lack the funds to grow. Many of them are not customers of banks.
Since the beginning of the year, West estimates that Goldfinch's loan portfolio has grown 2.5 times. Thousands of entrepreneurs from India, Indonesia, Mexico, Nigeria, Thailand, Singapore and Vietnam have received them.
Recall that in June, DeFi project Unbound Finance raised $5.8m. Based on AMM, it provides interest-free loans in UND's own Stablecoin and other synthetic assets, secured by tokens in a liquidity pool.
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