Citi has made a strategic investment into LiquidX, a fintech startup that offers an electronic platform for the exchange of trade finance, working capital and insurance assets.
The size of the investment was not disclosed, but came as part of a funding round led by existing investor Broadridge, which has been in a referral, sales and marketing alliance with LiquidX since 2016.
Launched in 2020, InBlock, LiquidX’s central offering, uses blockchain and other automation tools to ingest, digitise and automate the management of purchase orders, invoices, insurance policies, loans, and other trade finance assets, linking relevant parties via custom workflows for updating, modifying, servicing and analysing these assets.
Last year, the company launched an automated digital distribution tool for trade finance assets, as part of efforts to do away with inefficient paper-based processes.
LiquidX said at the time that its solution addresses the manual distribution of bank-intermediated trade finance, which totals around US$400-500bn each year, by allowing banks and asset managers to initiate single-click trading with their investor networks under existing agreements, or to the LiquidX network of over 50 funders. This enables banks and asset managers to increase their trade finance volumes while eliminating manual processes that are a source of delay, inefficiency, fraud risk, and error, the company added.
The digital distribution functionality is built into LiquidX’s 360 trade finance platform, which includes receivables finance, supply chain finance, dynamic discounting, and inventory finance.
In a statement, Sandeep Arora, head of digital and chief investment officer for Citi’s institutional clients group, says that the bank sees its investment into the startup as a means to bolster its working capital business.
“We are committed to delivering innovative solutions that enable our clients to transact without friction,” he says. “In today’s digital world, that means bringing supply chain networks into a connected, digital environment. LiquidX will help our clients to improve working capital efficiency and provide them with seamless access to a range of other services offered by Citi to institutional clients.”
This is the latest investment by Citi into a tech platform. In April this year, the bank led a US$10mn funding round for SME finance platform Crowdz, as part of wider plans to grow recurring revenue finance as an asset class.