a16z has Invested $25 Million into Goldfinch Finance, which sets the stage for the African continent to lead the market
Partner at Andreessen Horowitz (a16z), Arianna Simpson, announced the VC’s $25 million investment into Goldfinch Finance, a Defi startup.
Goldfinch Finance is a decentralized credit platform helping underserved markets get access to loans by leveraging crypto’s growing capital.
Goldfinch’s protocol expands lending credit behind banks, operating as an open marketplace for getting loans without collateral.
In Ariana Simpson’s words, “Goldfinch specifically provides global access to capital and as well as the utility of crypto, leaving the actual loan servicing and origination to the businesses that can best handle it.”
Credit lines are extended to lending businesses which then draw down stablecoins from a pool and make them available to local markets.
Investors can take advantage of Goldfinch by depositing crypto into the pool to earn profit. Payments made to the protocol by lending businesses are immediately disbursed to investors.
Most web3 lending platforms only support over-collateralized loan lending against existing assets, so it’s safe to say Goldfinch’s service is a game-changer. This allows only borrowers who hold crypto assets to benefit from Defi.
According to Goldfinch, Defi can scale globally when it starts providing loans without collateral as – it’s the missing piece.
“Majority of borrowers in the world today can’t actually borrow on Defi because it requires over-collateralization with crypto. Goldfinch protocol removes that crypto collateral requirement, unlocking an entirely new level of borrower capacity,” said Goldfinch finance.
Goldfinch has increased its active loans from $250,000 to more than $38M since it launched in January 2021. In the same period, the number of borrowers from the protocol has grown from 100 to over 230,000 borrowers currently.
Goldfinch has extended its pools to Tugende, an asset and credit finance firm in Kenya providing loans to enable people to purchase motorbikes for business.
Participants in the round include new investors like Bill Ackman, Helicap Blocktower, Kingsway Capital, YC Alumni Fund and Jinglan Wang.
Repeat investors include Stratos Technologies and Kindred Ventures.
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