Trace Finance, a Brazilian fintech startup that enables faster and more streamlined cross-border banking for startups, has announced a $4.3 million seed funding round. The investment is led by HOF Capital (investors in Dapper Labs, Terra, Flutterwave, and SpaceX) with participation from Circle Ventures (the company behind USDC – a leading USD-pegged stablecoin with a $50 billion fully diluted market cap), The Chainsmokers (via their fund Mantis VC), and others. Seed funds will be used to expand the company’s seamless global banking solution for startups, beginning with the US and Brazil. Currently, Latin American startups – particularly those based in Brazil – who raise venture capital funding have to deal with a slow and expensive process when accessing funds from their US-based holding companies and transferring them to local operations. They have limited options for banking institutions to work with and pay upwards of a 4% fee every time they transfer money. Furthermore, this process can take 1.5 months on average, during which these businesses cannot access banking or credit, and undergo extensive scrutiny. Trace Finance solves these problems by automating the onboarding process and working with multiple banks on the backend – reducing the spread from 4% to 0.2% and offering a more user-friendly experience.
Trace Finance is at the forefront of bridging the benefits of crypto with traditional finance, starting with treasury management and seamless cross-border payments for startups in Latin America. The funding will be used to create a US-based bank account for LatAm startups, expand operations in both Brazil and the United States, and further streamline the process of exchanging capital across borders. Trace Finance currently has over 30 enterprise clients including Noh, Condoconta, Pomelo, Zippi, The Coffee and Big Bets and a big waitlist for the US banking product. Trace Finance is a fintech platform founded in early 2021 by Bernardo Brites, Rafael Luz, and Leone Parise, who have extensive experience in crypto and fintech businesses. The company is based in São Paulo, Brazil and works with startups and investors to improve the experience of moving money across borders and enables them to have a seamless banking experience in each of the jurisdictions they operate in, with an interconnected financial platform. The founding team has successfully scaled prior businesses such as Binance, Trust Wallet and Decred.