Some entrepreneurs are capitalizing on the current trend by offering liquidity through a revolving line of credit in stablecoins, while payment providers investigate stablecoins for real-time settlement and cross-border payments more and more.
One of these is Mansa, a company established in Dubai with an emphasis on Africa, whose product enables payment businesses to rapidly fund customer accounts and settle transactions. The company has raised $10 million in seed money, which includes loan and stock. The $3 million equity investment was led by Tether, a stablecoin provider.
The money will help the business grow into Southeast Asia and Latin America, two areas where cross-border transactions are hampered by liquidity issues.
Mansa claims that its approach positions it as a major role in the future of payments by improving clients’ cash flow at a lower cost than fiat alternatives. Its co-founders, COO Nkiru Uwaje and CEO Mouloukou Sanoh, each have years of experience in web3, payments, and finance.
Sanoh was formerly employed at web3 VC firm Adaverse and is now an investor in multiple African fintechs. Uwaje oversaw blockchain strategy for Dell in the UK and Ireland and served as an innovation manager at SWIFT.
International trade depends on cross-border payments, but many payment processors struggle with liquidity, which causes settlement delays and increased operating expenses, particularly in developing nations. Developing nations are disproportionately affected by remittance costs, which average 6.5% worldwide. By 2030, it is anticipated that cross-border payments will total $290.2 trillion annually, although inefficiencies exist the current system could cost businesses billions.
According to Mansa, it solves this by providing quick, adaptable embedded pre-funding options that allow due diligence to be finished in less than a month. Additionally, it sources cash at scale using decentralized financing (DeFi) and, in contrast to traditional lenders, underwrites loans based on real-time transaction data rather than collateral. It pools money from hedge funds, family offices, quant funds, and DeFi platforms.
Some of these institutions provided Mansa with $7 million in liquidity for its seed round. Faculty Group, Octerra Capital, Polymorphic Capital, and Trive Digital are among the other investors who joined Tether in the equity round.
Sanoh told TechCrunch, “Transactions are moving on chain, but for that to happen, you need to have the on-chain liquidity to be able to settle instantly.” “That is why we are working closely with Tether to make it the main stablecoin in emerging markets and why our partnership with it is so consequential.”
The founders stated that despite USDC’s explosive rise in the previous year, Mansa is optimistic about Tether’s USDT because of its widespread accessibility, adaptability in terms of usage, and market domination, all of which continue to increase in tandem with the surge in on-chain payment activity, particularly in emerging nations.
Given that Tether and nine other digital assets were recently delisted from EU-regulated platforms for failing to comply with MiCA compliance guidelines, it also makes logical that Mansa’s clients are not headquartered in Europe. Among stablecoins worldwide, Tether continues to command 70% of the market share in terms of trading volume.
However, Mansa claims that from the standpoint of compliance, it is concentrated on following regulations. To improve its regulatory control, the fintech recently brought on the top legal officer of Franklin Templeton and the former head of HSBC North Asia.
In a similar vein, the stablecoin liquidity platform claims to be constructing strong risk frameworks for payments and liquidity, guaranteeing adherence to active transaction monitoring, sanction screening, AML checks, KYC (Know Your Customer), KYB (Know Your Business), and blockchain analytics tools. Nkiru emphasized, “We approach everything with that mindset because we’re building a fintech.”
The stablecoin provider is “proud to collaborate with Mansa and support their efforts to reshape global payment infrastructure,” according to Tether CEO Paolo Ardoino.
With access to more than $200 million in liquidity through its network of partners, Mansa has already paid out more than $18 million in financed payments to its clients. According to the fintech, there haven’t been any defaults yet.
In a similar vein, since its introduction six months ago, its transaction volume has increased dramatically, rising from $1.6 million in August of last year to $11 million in January, compounding at a 37.5% monthly growth rate. In that time, it has processed almost $31 million. According to Sanoh, the company’s current total payment volume (TPV) run rate is $240 million, but it hopes to increase to $1 billion this year.
B2B payment platforms, virtual card providers, stablecoin infrastructure, FX platforms, and remittance companies operating in Africa, Latin America, and Southeast Asia are just a few of the diverse clientele served by the two-year-old fintech.
According to the fintech, after onboarding, these clients have reported a 10% rise in revenue and a 30% increase in transaction volumes. Mansa’s own earnings, on the other hand, which come from fees on financed transactions — have grown 350% in the past six months.
The first step for Mansa is lending. But, according to Sanoh, it wants to do more. According to CEO Sanoh, “we’re starting by being the primary liquidity provider to the biggest payment companies across emerging markets.”
We may then take care of payouts and provide other services, such as foreign exchange. “It’s an evolution that could see it become an on-chain version of Stripe,” the CEO stated. “The goal is to create a one-stop payment platform where they can finance their payments, settle transactions instantly, and access foreign currency — all in one place.”