Decentralized credit protocol Goldfinch has raised $25 million in a Series A extension round led by Andreessen Horowitz (a16z), which had led the protocol’s $11 million Series A round last June.
- Goldfinch serves as an open marketplace for loans without collateral using a decentralized loan underwriting process. The Goldfinch protocol extends credit lines to lending businesses, which can draw stablecoins from the Goldfinch pool and then deploy the capital to local borrowers.
- Goldfinch provides the access to global capital but leaves the loan origination and servicing to the lending businesses.
- Investors can deposit crypto into the Goldfinch pool to earn yield. When lending businesses make interest payments back to Goldfinch, the money is disbursed to all of the participating investors.
- Goldfinch has grown its outstanding loan volume from $250,000 a year ago to over $38 million. The protocol is serving over 200,000 borrowers in 18 countries. Goldfinch capital is being used for a wide range of uses, including motorcycle taxis in Kenya and small businesses in Brazil.
- “By removing the need for crypto collateral and providing a means for passive yield, Goldfinch is dramatically expanding lending to more potential borrowers and capital providers,” wrote a16z General Partner Arianna Simpson in an announcement post.
- Other investors in the round included noted hedge fund manager Bill Ackman, crypto investment firm BlockTower and investment management firm Kingsway Capital.
- Goldfinch also announced in a post on Medium that it was restructuring. The company has launched the Goldfinch Foundation to help move the protocol into its next phase of growth.
- The initial team behind Goldfinch is spinning out into Warbler Labs, which will become a separate organization contributing to the Goldfinch community and broader decentralized finance (DeFi) ecosystem.