Merge has secured $9.5 million in capital via a seed round in order to create its API-powered banking and payments solution, effectively bridging the gap between fiat and cryptocurrency-based ecosystems.
Merge aims to address the ongoing struggle that many firms in the crypto economy face in being able to access traditional financial services without the high fees and poor functionality that are often associated with these nascent services.
The firm’s investment round has reportedly been led by Octopus Ventures and included contributions from Hashed, Coinbase Ventures, Alameda Research as well as Ethereal Ventures, alongside angel investors which included some of the most prominent names in crypto / traditional finance; the founder of Aave, co-founder of Polygon, CEO of Ledger, and former CEO of Barclays Consumer Banking, amongst other key investors.
The web3 economy is expected to represent around a $1 trillion market opportunity, however, crypto firms are perceived as high-risk by tier 1 banking institutions and continue to be underserved by virtual payment providers that lack the necessary products and services, as well as international coverage that crypto and Web3 platforms require to be able to grow and scale effectively.
Zihao Xu, investor at Octopus Ventures, stated:
“As the crypto economy moves further into the mainstream, it’s increasingly clear that the current financial infrastructure isn’t fit to serve the rapid expansion of crypto-native businesses and many providers aren’t specialised enough to gauge risk.
Kebbie Sebastian, a former PayPal and Barclays executive, alongside former Coinbase and Luno executives have come together to provide the solution.
Merge will aim to offer an intuitive way for cryptocurrency-related and Web3 firms to hold and transfer fiat money, convert between fiat currencies and crypto-assetts as well as manage compliance, all within its simple to integrate API.
Zihao Xu added:
“Merge’s vision is to build the infrastructure necessary to allow crypto businesses to operate without fear of shutdown by regulators or third-party risk teams. We’re excited to back them as they build that and, ultimately, unleash even more innovation in crypto and DeFi.”
Baek Kyoum Kim, partner at Hashed, remarked:
“Exponential growth of crypto startups evidently led to dramatic increase in CeFi and DeFi assets under management, giving us strong confidence in Merge as the infrastructure provider to those institutions. Institutional players will naturally seek a reliable compliance infrastructure, and Merge is the only one-stop solution that is specifically catering to their needs.”