Fintech a55, which offers credit to startups and companies in the so-called new economy, announced its first operation using decentralized finance (DeFi) protocol on Monday. The debt financing model uses the stablecoin USDC pegged to the Brazilian real and backed by dollars. The new modality is made using the Solana blockchain and was implemented in partnership with Belgian crypto fintech Credix, which has just arrived in Brazil.
a55 grants credit using the data about the predictable income of borrowers as part of its risk analysis through a proprietary platform that concentrates information about their cash flow, recurring revenue, and sales performance. Since its founding in 2017, fintech has already carried out more than a thousand operations in this way, granting BRL 400 million to startups in Brazil and Mexico – fintech reached the second largest economy in Latin America in the second quarter of 2021, when it raised a $35 million round led by Accial Capital.
“We are writing capital market history in Latin America with the first transaction in this model in Brazil,” explained Hugo Mathecowitsch, CEO of a55, in a press release, adding that he believes that this DeFi-TradFi debt model (i.e., that unites decentralized finance with traditional systems) will soon be the new normal in the sector. To LABS, he said that he expects a55 to move about $20 million (around BRL 100 million) in the new modality, but that in 2023 this volume of funding via Defi-TradFi will grow from three to five times.
“Integrating stablecoins and liquidity protocols into our funding strategy is an important way to complement centralized structures. By doing so, we are able to integrate the best of both worlds by connecting DeFi solutions to traditional capital markets,” added Gabriel Zamora, director of capital markets at a55.
“Credix was very impressed with the a55 team and their vision to co-develop revenue-based financing. This DeFi loan is the start of a partnership and exciting growth journey to revolutionize global credit markets,” said Thomas Bohner, CEO at Credix, also in the statement.
With growing customer demand for “smart capital,” a55 has expanded its financing offering by leveraging data models developed with its historical expertise in financing SaaS and e-commerce companies. The fintech has leveraged its earlier experience so it can now approve other types of companies in various sectors using the same types of data it has used to help digital companies during the past four years.
a55’s model was inspired by Pipe.com, a fast-growing U.S. startup that scaled the recurring revenue model in North America. Given the idiosyncrasies of the capital markets environment in most countries in Latin America, a55 opted to scale its technology stack through DeFi to create a country-agnostic financing infrastructure – a “Pipe.com, through DeFi, for Latin America.”
Mathecowitsch also told LABS that a55’s list of goals for 2022 includes improving fintech predictability models, incorporating new company datasets into the platform, such as ERPs, CRMs, web analytics, and inventory management systems, as well as expanding commercially the solution allowing other interested parties, such as investors, to have access to the platform.