Untangled Finance has raised $13.5 million in “strategic funding” as it seeks to tokenize “real world private credit assets.” This includes SME loans, invoices, and more.
The funding was provided by Fasanara Capital, a UK-based investment firm and technology platform that manages around $4 billion.
Untangled was founded in 2020 by finance professionals.
The company explains that it aims to make capital more accessible and more fairly priced. Big corporations tend to receive more favorable financing terms, but information asymmetry is more pronounced for SMEs, which leads to a higher cost of capital. This challenge is exacerbated when it comes to cross-border credit.
Untangled believes that tokenization, or utilizing blockchain technology, can improve the credit environment as these digital assets can offer fractional ownership along with improved transparency and security.
The company notes that the global private credit market surpasses $1.5 trillion, and DeFi’s stake in private credits Real World Assets (RWAs) is currently around $500 million. The company sees this as an opportunity for DeFi to capture a larger share of this market.
Untangled will partner with Fasanara to access more than 130 verified asset originators across 60 countries, offering investors the opportunity to access institutional-grade assets traditionally exclusive to major financial institutions.
Untangled Finance says it will be launched on the Celo blockchain, followed by Polygon and Ethereum via Chainlink’s Cross Chain Interoperability Protocol (CCIP), making Untangled among the first multichain and interoperable RWA credit protocols.
Manrui Tang, Untangled Finance’s co-founder, said their focus has been on real-world asset tokenization and the partnership with Fasanara is a step towards developing reliable DeFi yield mechanisms.
Francesco Filia, CEO and CIO of Fasanara Capital, said they see a merging of worlds with Fintech lending one one side and the way values are being transferred within the new world of digital assets on the other.
“The Untangled team has a rare combination of being rooted in real world finance and yet has acquired deep expertise in blockchain and DeFi. We are looking forward to working with Untangled to engineer these entirely new financial rails so, for the first time, being able to handle users at scale.”