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Xalts has big ambitions in trade finance. The company revealed in February it had acquired digital trade finance consortium Contour, which ran into difficulties the previous October after failing to secure sufficient funding from its bank backers. 

Contour’s central offering was based on bringing down processing times for letters of credit, from an average of 10 days to under 24 hours. But following the acquisition, Xalts’s co-founders said they intended to “expand the scope” of its network and “build it into a rail that enables businesses to access digital solutions for trade and supply chain finance”. 

In the company’s first interview since that announcement, GTR speaks to Xalts chief executive Ashutosh Goel and chief operating officer Supreet Kaur, former executives at HSBC and Meta respectively, about the background to the Contour acquisition and their ambition to use its infrastructure to accelerate trade finance digitalisation.

 

GTR: Can you tell us about Xalts’ genesis and vision?   

Goel: Xalts is building digital treasury, trade and supply chain finance infrastructure to enable seamless flow of data and value between businesses and financial institutions. Operations for products offered in this space are currently manual and dependent on disconnected systems and processes. Our infrastructure digitises these processes, is easy to implement and removes the burden of large upfront cost and time commitment from different parties involved: large global banks, medium-sized and regional banks, global corporates and SMEs.  

The genesis for Xalts was with money becoming real-time. However, its wholesale adoption in treasury, trade and supply chain finance will be challenging due to these disjointed operational processes and systems. Real-time money is not very useful if the operational processes of the other leg of the transaction are manual and slow.  

Our modular infrastructure is designed in a way that parties with different levels of operational complexity can use it easily and implement end-to-end digitisation for their leg of a trade finance transaction.   

Our vision is to drive digitisation in this space to simplify and speed up the exchange of data and value. This will enable better risk attribution, reduce the inefficiencies in the current processes and unlock capital availability.   

 

GTR: Who are Xalts’ backers and what is your approach to growth?  

Kaur: We are backed by Accel, which is a marquee venture capital firm, and Citi Ventures. This mix of investors enables us to have a long-term growth mindset while keeping our focus on compliance processes that must be followed when you build for financial institutions.   

A long-term growth mindset has been integral to companies which had transformational impact in large ecosystems, such as Stripe in payments. It’s the same approach that drives us, and our investors are very supportive of that.  

 

GTR: Why did Xalts decide to acquire Contour, and more broadly, why does trade finance present such a major opportunity?  

Kaur: Both Contour and Xalts had a similar problem statement and were focused on a similar set of markets and customers. For us, a major driver to acquire Contour was its network of banks and corporate customers. We believe that with time and our technology advantage, we can scale it much faster.  

The nature of trade finance is highly interconnected networks of corporations importing and exporting and working with a wide set of global, regional and local banks. This enables us to benefit from network effects and introduce a product suite for the dense networks. With our modular technology, this also enables us to introduce market or industry specific features to accelerate our customers’ digitisation efforts.  

 

GTR: What progress has been made so far, and are there any specific industry segments or geographies Xalts is targeting?  

Goel: Post acquiring Contour in February 2024, our product and technology teams have started work on upgrades, incorporating a lot of customer feedback. We will be rolling out these upgrades in the near future.  

Banks and corporate customers continue to transact on the network. The growth focus remains very much global, because trade is global. However, to accelerate adoption, we have started adding operations and sales capability in key markets in Asia.   

 

GTR: What can we expect to see from Xalts over the next 12 months?  

Goel: Our objective is to enable our customers to progress on their trade digitisation journey. We are going to roll out new products, features that enhance usability and integrations. For example, we will roll out a separate co-drafting feature where buyers and sellers can co-draft in real time, thereby saving significant time and improving auditability.   

We are also going to introduce a simplified integration process with external platforms that will allow embedded finance product offering for our customers. We are also working with banks to add more products beyond letters of credit to the network, such as supply chain finance. In the next 12 months you will see a lot more from us in terms of upgrades, features and products.  

Kaur: However, our technology alone is just one pillar of adoption. Financial institutions and corporations need a multitude of services to come together for a truly transformational solution. We are partnering with several global leading organisations to bring all the pillars together and accelerate the adoption for our customers. We are soon going to announce these strategic partnerships to jointly deliver important innovations for the financial services industry using our technology.