Secured Finance raises USD4.0m in seed funding

Secured Finance, a platform provider for the cryptocurrency loans and derivatives market, has raised USD4.0 million in its oversubscribed seed funding round. 

The successful raise, with demand of more than double of Secured Finance’s initial target, was co-led by GSR Markets, a leading trading firm in the cryptocurrency ecosystem; open-source research, development, and deployment laboratory Protocol Labs; venture capital firm FinTech Collective; global technology investment firm HOF Capital; and strategic investment arm, Huobi Ventures. Several high-profile individual investors also contributed, such as Board Member at Nomura Holding America James DeNaut, South African entrepreneur and Civic’s CEO Vinny Lingham, Twitch Co-Founder, and Founder of Goat Capital, Justin Kan, Quantstamp CEO Richard Ma, Chief Operating Officer at CoinList Scott Keto, and Creator of IPFS and Filecoin, Juan Benet.

Masakazu Kikuchi, CEO and Co-Founder, Secured Finance, says: “Today, we stand at a critical juncture in the journey to democratising the finance system. Our vision is to become leaders in decentralised finance and to spearhead this movement through the creation of an institutional-grade P2P cross-chain settlement protocol. The tremendous interest and backing of our investors and strategic partners will enable us to grow the Secured Finance team and secure regulatory approval and legal compliance for our platform across jurisdictions globally.”

Established in 2020, Secured Finance seeks to revolutionise decentralised finance by offering investment-bank-grade financial products and services for cryptocurrencies and digital assets. Using decentralised ledger technology (DLT), it builds P2P derivative exchanges to cater for loans, forwards, swaps, and options.

Due to regulatory requirements for reserve liquidity to cover the crypto’s high-risk weight, attractive crypto-financial products are not typically available through traditional institutions. By fully complying with ISDA guidelines and redesigning trade lifecycle and banking operations in a peer-to-peer manner, deployed on the Ethereum blockchain, Secured Finance eliminates the need to account for such middleman risk. Secured Finance’s smart contracts manage collateral autonomously, so users can trade loans and swaps without worrying about counterparty risk.

Rich Rosenblum, President, and Co-founder at GSR Markets, says: "Since 2009, most developed economies have been operating with record low interest rates. In the digital asset space, rates are double or even triple digits, which opens up a lot of valuable investment opportunities, particularly in fixed income. Secured Finance has the right team and vision to bring fixed income products to DeFi while also solving some of the most difficult liquidity problems in the space."

Fady Yacoub, Co-Founder and Managing Partner at HOF Capital, says: "By introducing fixed-rate lending and yield curve structures to the DeFi ecosystem, Secured Finance will enable traditional financial institutions to sell crypto-linked products, unlocking hundreds of billions of dollars in additional annual transaction volume for DeFi instruments."

Sean Lippel, Partner and Head of Digital Assets at FinTech Collective, says: “A lack of a yield curve in DeFi results in wildly variable utilization based rates that lead to a lack of predictability and forecasting for DeFi ecosystem participants. We believe Secured Finance is building a new financial primitive that will spur further innovation around crypto interest rate swaps, forwards, and derivatives. We are excited to back such a strong team out of Asia, combining their DeFi ethos with decades of experience in institutional structured finance.”

Unica Yin, Director at Huobi Ventures, says: “Secured Finance is one of the rare teams with a deep understanding of both financial products and the on-chain market. We have been in close communication with the team for over six months and have witnessed first-hand their outstanding R&D and execution capabilities. We believe that Secured Finance will become an indispensable infrastructure within the Filecoin ecosystem."

Prior to this funding round, Secured Finance was financed through its participation in the Filecoin Launchpad Accelerator, Powered by Tachyon. Offering funding, advice, and supports for startups that are building more open, interoperable, and programmable tools, infrastructure, and applications for the distributed web, the program was essential in Secured Finance’s development from a hackathon project to a mature investor-ready company. 

Colin Evran, Ecosystem Lead at Protocol Labs, says: “Secured Finance is a shining example of the power of the Filecoin Launchpad Accelerator to transform promising early-stage projects into high growth businesses on the brink of making a huge impact in traditional markets and Web3. Given the success of companies such as Secured Finance, we are delighted that Launchpad received a record number of applications for the second iteration of the program. We’re excited to help the next cohort of innovators turn their visions for Web 3.0 into reality.

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