Revolutionising emerging market credit using DeFi rails
Bengaluru, 10th June 2024: Qiro Finance, a decentralized finance (DeFi) company established by Akshay Poshatwar and Nishikant Bahalkar, aims to address the substantial credit gap prevalent in emerging markets. This gap is attributed to the dominance of banks in the credit market and their risk-averse approach. The Fintech and DeFi experts disclosed a successful $1.2 million funding round for their new venture, Qiro Finance. The company headquartered in Singapore focuses on building a decentralized credit protocol to connect emerging market asset originators (NBFIs) with global investors by leveraging blockchain and stablecoin rails.
According to a report by KKR, the APAC region currently commands only a 21% share of private lenders, in stark contrast to the 67% held by the US. This asymmetry presents a significant impediment to borrowers in emerging markets seeking access to non-bank credit. Qiro Finance seeks to address this disparity by facilitating connections between the region and global credit investors, thereby positioning itself as an effective conduit for capturing the dynamism of the region’s businesses.
The fundraising round was led by Alliance, an early-stage web3 accelerator, with involvement from prominent entities like Druid Ventures, Escape Velocity (EV3), Trident Digital and CMT Digital. Additionally, Qiro Finance secured a 100,000 MATIC grant from Polygon under the ‘Polygon’s Village Build Ideas Program’ and a US$50,000 development grant from the Aptos Foundation.
Imran Khan, Founder of Alliance, highlighted, “Real World Assets (RWAs) are gaining traction, signalling a noteworthy shift as traditional firms pursue alternative financing avenues embedded in crypto. This trend not only broadens global financing options but also fosters enhanced accessibility.” The Qiro team’s acceptance into Alliance’s program is geared toward extending global access to private credit through RWAs.
The emergence of RWA tokenization, evident in the involvement of industry behemoths like Blackrock and Franklin Templeton launching their funds on-chain, has been a predominant theme in the crypto market in recent years, driving the sector to an $8 billion total value locked, as outlined in a Messari Report.
Qiro is developing a decentralized credit protocol with the capability to facilitate a wide range of tokenized RWA-backed credit applications. This is achieved by unifying asset originators, investors, and credit underwriters within a single framework. Nishikant Bahalkar , CPO and Co-founder. explained, “RWA credit on-chain isn’t a novel concept; however, Qiro is trailblazing open credit data and risk underwriting infrastructure for RWA credit protocols, addressing the adverse selection and credit defaults affecting on-chain credit transactions.”
The allocated pre-seed funding will be strategically directed to uphold the development and expansion of Qiro Finance. The primary emphasis will centre on product development and ecosystem expansion in preparation for the forthcoming mainnet launch within the current year.
Chris Pizzo, Co-Founder and General Partner at Druid Ventures articulated his perspective on Qiro, asserting, “Qiro has the potential to become the de facto credit data infrastructure, featuring a scalable and robust risk management layer at the protocol level.”
Concluding on an affirmative note, Akshay Poshatwar, CEO and Co-founder expressed, “We are eagerly anticipating the journey ahead to revolutionize the private credit market. Our initial focus will revolve around supporting fintech asset originators within the Southeast Asian (SEA) markets, with an expansion roadmap encompassing other emerging markets. By harnessing the potential of DeFi and Blockchain technology, we remain resolute in establishing a more transparent, efficient, and accessible credit ecosystem.”
