XDC Ventures, the investment arm of trade blockchain company XDC Network, is hoping to “re-energise” trade finance platform Contour after acquiring it from Xalts.
Singapore-based XDC bought a 100% stake in Contour, designed to streamline banks’ trade finance processes with a focus on digital letters of credit (LCs), for an undisclosed amount last week, the company’s co-founder Ritesh Kakkad told GTR.
XDC, whose main offering involves digitising and tokenising trade assets such as invoices, is now hoping to “re-energise Contour’s network” and use its technology to enable faster blockchain-powered settlements.
“Contour is a very prominent player when it comes to trade finance because they digitise LCs, and still many banks use the backroom of Contour. So, for us, that was a strategic decision,” Kakkad said, adding XDC also bought Contour’s debt.
When it went live in 2020, Contour was backed by major banks including HSBC, BNP Paribas, Citi, Standard Chartered and DBS.
The company appeared to have a meteoric rise in its first few years. However, it struggled to secure enough funding to scale, before finally shutting down in 2023.
It was then revived by another Singapore-based blockchain-powered fintech, Xalts, in February last year. Xalts went on to heavily restructure Contour, with the firm eventually “reduced by almost 90%”, Kakkad said.
Most of the “30-plus agreements that are under the Contour network” are “not active”, he confirmed. “Many customers who joined initially are not using the systems.”
But “banks like DBS, or stakeholders like Bangkok Bank, or some startups… they are still live with the platform”, Kakkad claimed. “[Contour] is not completely shut down.”
A spokesperson for Xalts told GTR that Contour “added new clients, including marquee names such as Tata International and MUFG Bank” over the last 18 months.
“The platform also continued to receive strong support from its existing bank and corporate clients, including DBS Bank, Bangkok Bank and Tata Steel.”
Xalts said it continued to “believe in the potential and mission of Contour” but that selling it had been part of a “strategic decision to consolidate our efforts around scaling our AI-powered financial technology business”.
“Contour is on a positive growth trajectory and with XDC’s leadership, global network, and partners, we believe it has the vision and capability to expand further,” the spokesperson added.
XDC’s Kakkad said the “[market] temperature is very exciting”, and that “some of the top banks’ venture arms want to enter as strategic partners again into the company”.
While Kakkad declined to provide further details, he said XDC had “very serious interest from two organisations” that were early members of the Contour network in its first iteration.
XDC Ventures has also secured future investment commitments from “leading funds to fuel Contour’s geographic expansion and drive adoption among banks and corporates”, it said in a statement.
Future strategy
The new Genius Act in the US, which aims to create a comprehensive regulatory framework for stablecoins, also drove XDC’s decision to buy Contour, as it “changed the legislative thought process” about how it could utilise its network in XDC’s stablecoin offering, Kakkad said.
The fintech firm’s plans for Contour now include fully integrating the XDC Network as its “settlement and tokenisation backbone, enabling faster, lower-cost cross-border transactions”, the company said in the statement.
This will initially take place through the launch of a so-called ‘stablecoin lab’ that will run pilots with banks and corporates for regulated stablecoin issuance and settlement, and “leveraging Contour’s infrastructure for pilots that optimise treasury returns and working capital efficiency”, according to the statement.
Crucially, it will focus on “developing APIs”, which are software that act as digital bridges, for stablecoin-based LC settlement that will “reduce processing from days to near real-time”.
“We see Contour not only as a trade finance network but as an enabler of compliant stablecoin use-cases that can deliver new efficiencies and revenue streams for banks and corporates”, Kakkad said. “Banks need settlement rails, treasury optimisation, and compliance frameworks. We’re building all three.”
Under the XDC Network umbrella, Contour will still operate as a separate team, with the new owners having retained existing employees. The company also recruited a new strategic advisor for Contour.
Additionally, XDC is “talking to some of the members from the original core Contour team”, Kakkad said.
“One or two people who might be from a top management, [may be] going to join us as well. Very soon we [may] see some members from the ex-team going to join this new team.”
