The DeFi protocol Goldfinch, which provides unsecured crypto loans, closed an $11 million Series A round led by Andreessen Horowitz (a16z).
/0 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
The round also included Mercy Corps Ventures, A Capital, Access Ventures and Divergence Ventures.
The San Francisco–based startup will deploy the funding to build a network of borrowers and lenders. Talks are underway with marketers and underwriting specialists to broaden its regional footprint.
The Goldfinch protocol relies on the concept of “trust through consensus”. It involves assessing borrowers’ creditworthiness based on the views of other participants. The value of the crypto assets held is not included in its calculation.
Going forward, the resulting metric is used to automatically allocate the capital provided by lenders, enabling them to earn passive income.
The project’s lender community consists of experts in traditional financial services, funds and crypto enthusiasts.
The team has submitted the protocol code for audit and pledged to increase the project’s decentralisation.
The project’s founders, former Coinbase employees Mike Sall and Blake West, set out to democratise crypto lending.
Goldfinch targets individuals and corporate entities in developing countries that may not meet collateral requirements for loans. According to the IFC, in such countries about 40% of micro-, small and medium-sized businesses lack funds for growth. Many are not bank clients.
West’s estimates put the year-to-date Goldfinch loan portfolio up 2.5x, with thousands of entrepreneurs across India, Indonesia, Mexico, Nigeria, Thailand, Singapore and Vietnam taking out loans.
In June, DeFi project Unbound Finance attracted $5.8 million.
In May, ForkLog reported plans for a16z to launch the third crypto fund with assets worth $2 billion.
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