Tradeteq, a trade finance-focused fintech startup, is to expand its distribution platform and release new applications and services after raising US$6.3mn of equity investment.
The seed extension funding round was led by venture capital firm ADV, with the participation of several of Tradeteq’s existing individual and family office investors. It is the company’s most significant investment to date, bringing the total raised thus far to US$7mn.
Tradeteq is the provider of a trade finance distribution platform that connects trade finance originators with institutional investors and enables them to interact and transact. The aim is to open up the trade finance market to a broader set of investors, using advanced technology such as artificial intelligence (AI) and machine learning to provide sophisticated credit analytics, reporting, investment and operational solutions for their trade finance exposures.
So far, assets worth US$150mn have been processed through the platform, which went live earlier in the year after a soft launch in 2017.
The founders, Christoph Gugelmann and Nils Behling, worked together at Bank of America Merrill Lynch and then Galena, the asset management arm of commodity trader Trafigura, before setting up Tradeteq, run out of London.
Speaking to GTR, Behling says the new investment is a “significant step” for the company and its vision of making trade finance investable and establishing trade finance as an alternative asset class.
“It’s building on the foundation that we have laid over the past months, but it will really be bringing our offering to the next level,” he says.
Investment delivery is one of the areas where Tradeteq will now look to enhance its offering: within the next few months the firm will launch a flexible repackaging offering that transforms exposures into notes that can be purchased, held and transferred as traditional fixed income instruments. This will make it more straightforward for institutional buyers to invest in trade finance exposures.
Another focus area will be the implementation of AI for credit scoring: Tradeteq will now be able to “speed up the development, to hire additional resources and to expedite building further on what we have”, explains Gugelmann. He adds that the firm will also seek to “expand aggressively by teaming up with third parties in non-core areas, such as credit insurance and fraud detection systems”.
The company opened a Singapore office in March, from which it is now building its Asia client base. The firm also plans to open an office in the US by the end of the year.