we.trade, a blockchain-based platform for open account trade, has entered a strategic alliance with CRIF, a provider of credit bureau and business information, outsourcing and processing services, as part of a successful €5.5mn capital round.

Last year, the platform’s financial future looked uncertain, after funding raised from some shareholder banks proved lower than expected, with many opting not to reinvest in recent rounds. At the same time, a potentially significant injection of funding from Euler Hermes – believed to be in the region of €2-3mn – did not materialise. As a result, we.trade was forced to cut around half of its workforce and turn its focus to bringing in new additional funding from shareholders and licensees.

A source close to we.trade’s operations tells GTR that IBM, which took a 7% stake in the company last year, agreed to defer certain financial obligations owed to it by we.trade, paving the way for the company’s board to chart a financial way forward.

This allowed for a new capital round to take place, in which Omer Ahsan, chairman of we.trade, tells GTR that six of the platform’s 12 member banks, among them HSBC, La Caixa, Nordea and Santander, invested a total of €3mn.

In addition to the investment from the member banks, CRIF has also come on board, putting in €2.5mn in the same round.

Although CRIF’s activities are not directly related to open account trade digitisation, Ahsan says that its entry into we.trade will not lead to a change in strategic direction for the platform.

“It was always the intention of we.trade to develop a trade ecosystem that involves multiple partners. Banks are a critical part, but our vision was always to involve logistical partners and complimentary services that are needed for trade,” he tells GTR, adding that the plan will be to integrate CRIF’s knowledge management services into the platform to enable we.trade users to access counterparty risk and credit scorecards to help facilitate transactions.

Paola Galassi, CRIF’s executive director of global B2B services, will now take a seat on we.trade’s board.

According to Ahsan, the money raised by we.trade will be used “wisely”, with the priority being product development and sales activity. “we.trade has 500 real transactions under its belt, which is a very decent number,” he says. “We are expecting that towards the second half of this year, once we have addressed some product gaps and got the message out to the market once again, we will be ramping that up even further.”

While the company will make some strategic hires as part of the investment raise, it has ruled out any hiring spree in the wake of last year’s job cuts. “Getting the headcount was the right decision from the point of view of setting the company up for success, because we need to make sure that the company is right sized for the future, and that is what we are doing,” he says, adding: “We are trying to build a service company that has technology at the heart of it, but we are not building a humongous technology company.”

As part of these new developments, Ciaran McGowan, who has been the platform’s general manager since April 2019, has left the company, in what Ahsan describes as a mutual agreement.

“Ciaran was instrumental in setting the foundations of the company. However, the management and the board felt that we need to see we.trade evolve now as part of this capital round,” says Ahsan. “We need to accelerate product development, we need to put more focus on sales and development, and therefore we need to bring in a different variant of that top management talent to take the company to the next stage of its journey. Bearing that in mind, it was a mutual agreement between Ciaran and ourselves that it was the right time for him to step aside.”

For the time being, Mark Cudden, we.trade’s chief technology officer, will lead the company while a replacement is sought.