In its pre-seed investment round, Qiro Finance, a rising force in the decentralized finance (DeFi) market, successfully raised $1.2 million. Leading Web3 accelerator Alliance led the round, which included participation from a number of well-known investors, including Escape Velocity, CMT Digital, Trident Digital, and Druid Ventures. This cash infusion is expected to support the startup’s efforts to develop new products, hire more staff members, and expand its ecosystem.
Akshay Poshatwar and Nishikant Bahalkar co-founded Qiro Finance in 2023. It is a decentralized platform for financial lending that is secured by assets. The startup intends to use stablecoin and blockchain technology to close the significant credit gap that exists in emerging economies. The primary reason for this disparity is that traditional banks, who control the majority of the loan market, are risk averse. Qiro Finance links emerging market asset originators, sometimes known as non-bank financial institutions, or NBFIs, with international investors through the development of a decentralized credit system.
The foundation of Qiro’s approach is stablecoins, a class of cryptocurrency intended to keep a steady value by being linked to another asset class. In areas where traditional credit access is scarce, the platform aims to offer a more inclusive and accessible credit system to both business-to-business (B2B) and consumer (B2C) sectors.
Apart from the funds collected, Qiro Finance has also been awarded a $50,000 development grant by the Aptos Foundation and a $100,000 MATIC grant by Polygon’s Village Build Ideas Program. These awards will help Qiro’s creative financial solutions continue to grow and flourish.
The CEO and co-founder of Qiro Finance, Akshay Poshatwar, expressed excitement about the money and the company’s future. We are looking forward to the road that lies ahead in order to transform the private credit industry. Supporting fintech asset originators in Southeast Asian (SEA) markets will be our primary emphasis initially, with plans to expand into other emerging economies. We are committed to creating a credit environment that is more open, effective, and easily accessible by utilizing the possibilities of DeFi and blockchain technology,” he stated.
One cannot exaggerate the importance of Real World Assets (RWAs) in the cryptocurrency market. RWAs are becoming more popular as conventional businesses investigate the alternate funding channels found in cryptocurrencies, expanding access to financing opportunities worldwide. “Real World Assets (RWAs) are gaining traction, signalling a noteworthy shift as traditional firms pursue alternative financing avenues embedded in crypto,” said Alliance founder Imran Khan, highlighting this trend. This trend promotes improved accessibility in addition to expanding worldwide finance possibilities.
This change is in line with Qiro Finance’s goal. To enable tokenized RWA-backed credit applications, the business is creating a decentralized credit protocol. The problems with credit defaults and adverse selection that have traditionally dogged on-chain credit transactions are addressed by this method.
“RWA credit on-chain isn’t a novel concept, but 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,” said co-founder and CPO Nishikant Bahalkar.
The money is needed as the Reserve Bank of India (RBI) has warned against cryptocurrencies, claiming they pose systemic threats to financial systems. A 30% tax on cryptocurrency sales and a 1% TDS on transactions over INR 10,000 have been enforced by the Indian government. These difficulties haven’t stopped the bitcoin business from growing. For example, in March 2024, Bitcoin saw an incredible surge that saw it surpass $73,000 and increase the total market capitalization of cryptocurrencies to $2.5 trillion, which is just 10% less than its peak of $2.8 trillion.
India is one of the biggest cryptocurrency users. Peer-to-peer (P2P) cryptocurrency trading is one of the top five activities in the nation, and 75% of users on centralized exchanges (CEXs) are under 35. Despite legislative obstacles, this demographic shift points to an increasing acceptance and adoption of digital currencies.
Focusing on emerging markets is a particularly timely move for Qiro Finance. A KKR analysis states that the US has a 67% share of private lenders, whereas the Asia-Pacific (APAC) region only has a 21% stake. This discrepancy emphasizes the difficulties emerging market borrowers encounter when trying to obtain non-bank borrowing. Qiro Finance seeks to harness the vitality of these regions’ enterprises and create a more equitable credit system by connecting them with international credit investors.
With its Singaporean headquarters, the company is well-positioned to capitalize on the rapidly expanding Southeast Asian market. Qiro Finance is poised to play a significant part in revolutionizing the decentralized finance environment as it gets ready to deploy its mainnet, the culmination of its blockchain project, later this year.
To sum up, Qiro Finance’s successful pre-seed funding round and subsequent grants highlight the potential of DeFi solutions and the growing interest in them as a means of closing credit gaps in emerging markets. With a strong plan that makes use of stablecoin and blockchain technology and a concentration on RWAs, Qiro Finance is well-positioned to transform the credit ecosystem and make it more open, effective, and accessible.
