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Digital trade finance network Contour has completed a series A+ fundraising round, bringing in a new shareholder bank and announcing plans to expand its blockchain-based offering beyond the letter of credit (LC) into open account trade – historically the preserve of competing network Marco Polo.

Participating in the funding round were existing shareholders Bangkok Bank, BNP Paribas, Citi, CTBC, HSBC, ING, SEB and Standard Chartered. Contour’s non-bank shareholders include Bain & Company, CryptoBLK and R3. Coming in for the first time is SMBC, which became the first and only Japanese bank to join the Contour beta network in September 2020. This is the latest in a number of strategic investments for SMBC, which earlier this month also entered commodity trade finance platform Komgo’s funding round.

Contour has not disclosed the sum raised, but Carl Wegner, the company’s CEO, tells GTR that funds will be used to “double our company size, as our network is expanding rapidly and we need to support the new demand and influx of clients and transactions”.

Since transitioning into beta as a standalone legal entity in January 2020, Contour has chalked up numerous firsts, including the first paperless renminbi-denominated deal in the iron ore industry in May last year, and has added several banks as members – including Singapore’s DBS, Vietnam’s HDBank, and South Africa’s Standard Bank.

In October Contour went fully live, becoming the world’s first open-to-all, decentralised trade finance network. Currently, 13 institutions are using Contour’s technology with their customers in a live business environment across 25 countries, and work is underway to scale up adoption further – including a new domestic network in Bangladesh that was launched last week.

To date, the platform has aimed at digitalising the LC process, with results from a global trial with more than 50 banks and corporates demonstrating a reduction in processing times of over 90%, from between five and 10 days to under 24 hours. With this new funding, though, the network says it will now branch out into new areas – notably open account trade, which up until now has been the focus of the Marco Polo Network.

“We will absolutely move into open account,” says Wegner. “The foundation for all trade finance starts with a purchase order and an invoice, and our customers can expect significant process improvements through the power of connecting buyers, sellers and banks on a common decentralised network. Our intention is to experiment and look into all areas of trade finance in order to make our network accessible to all clients and be able to equip them with the tools for their different trade finance requirements and needs.”

Contour says in a statement that it has already formed an in-house development team to experiment with these new trade product offerings.

What this means for Marco Polo, which was originally developed as an open account trade finance platform, is unclear.

Currently, more than 30 banks are part of Marco Polo, making it the largest trade finance network that leverages blockchain technology. However, progress has been slow. The network originally planned to move into production by early 2019, and a revised go-live date of Q2 2020 was also missed. By Q4 2020 Marco Polo was officially live with two modules: receivables discounting and payment commitments.

“One of the main reasons that it took longer than anticipated for distributed ledger technology  solutions to become mainstream is the legal engagement with the banks and the corporates,” Daniel Cotti, managing director of the centre of excellence for banking and trade at TradeIX – the fintech firm that operates Marco Polo – tells GTR. “These challenges are expected, especially when we are building and creating something so new and innovative. This has since been resolved, and we now have a big waiting list of banks and companies that want to join.”

He also adds that it is “not clear cut” to say that Marco Polo covers open account and Contour covers LCs. “There is a grey area in between, and for us the grey area is the payment commitment module. Our corporate customers tell us that the irrevocable payment commitment (IPC) instrument has the potential to replace some of their flow LC business,” he says. “It is obviously up to the clients to decide if they need a letter of credit, an IPC or open account.  However, our offering is a brand-new trade instrument that fulfils the functions of a letter of credit and open account.”

Nonetheless, as a growing range of industries, such as metals, energy, petrochemicals, textiles, soft commodities and retail, conduct transactions on Contour, the network appears now to have set its sights on dominating the world of blockchain-enabled trade finance.

“With this investment, we move ever-closer to realising our vision of becoming the new global standard for trade finance by simplifying and removing barriers in the trade ecosystem, making the industry economically, environmentally and socially sustainable,” says Wegner.