ReSource Finance Raises $1.7M to Offer Undercollateralized Credit to Web 3 Businesses
[PRESS RELEASE – San Francisco, United States, 12th August 2021]
Decentralized credit protocol, ReSource Finance completed a $1.7 million funding round led by Future Perfect Ventures, NGC Ventures, and ExNetwork to enhance decentralized credit access to Web 3 businesses. Other investors in the round include Davoa Capital, BlockRock Capital, Moonwhale Ventures, Follow the Seed, Floem Capital, Flori Ventures (a Celo-focused ecosystem fund), and Tokenomik.
The financing will be used to boost customer acquisition on the ReSource Finance dApp and better its reputation-based decentralized lines of credit to small-scale businesses. In a statement, the firm reiterates the need to provide credit to these “authentic economy builders” on a peer-to-peer platform without an intermediary.
Jalak Jobanputra of Future Perfect Ventures, the lead investor in ReSource, said the latest funding aims to complete the common goals shared with ReSource. Future Perfect Ventures launched in 2014 with a goal of partnering with entrepreneurs, providing business consultation, and building new business models in an effort to “create a more participatory, equitable and sustainable economy.”
ReSource is expected to use the funding to provide a platform for much-needed credit to startups and small businesses locked out of the traditional credit facilities.
“The ReSource team, with their unique backgrounds and skill sets, epitomizes this mission at a time when it is more important than ever to support individuals and local economies that we believe will lead the global recovery,” Jobanputra said.
ReSource is built on the Celo Network and leverages its fast and low fee platform allowing any business to easily access loans from their peers. The platform automatically creates a novel reputation system to rate the creditors in order to select the best businesses to extend lines of credit. ReSource uses diverse data oracles to create creditworthiness scores by providing data on a number of factors including FICO credit scores, bank statements, accounting software APIs, and marketplace reviews.
“ReSource is redefining the DeFi mutual credit economy. Aligned with Celo’s mission of creating the conditions of prosperity for all, ReSource is leading the way in uncollateralized credit with crypto for small businesses,” said Xochitl Cazador, Ecosystem, Celo Foundation.
In May, ReSource launched its minimum viable product, a business-to-business (B2B) interest-free credit line payable in its native stablecoin, ReSource Dollars (rUSD), and payment network in Asheville, North Carolina. It is tailored for non-crypto natives, who can use their non-custodial wallets to receive, pay and request loans without understanding Web3.
In only two months, ReSource has extended over $380,000 in interest-free B2B credit lines in rUSD and recorded close to $40,000 in transaction volume. Small businesses in NC have benefited greatly from the decentralized service with over 250 companies using the product ranging from organic food delivery, water, co-working spaces, professional services, and other industries.
Simply, users create mutual credit facilities between their peer businesses without the need for an intermediary or external pools of capital from lenders. Instead, the freelancers and small businesses take credit lines and agree to pay back by selling their goods and services. The system then automatically updates the credit lines based on the transaction history, reputation, and option collateral.
The investment round also welcomed top angel investors in crypto including Eran Haggiag, Founder of ClearX, Eyal Hertzog, co-founder of Bancor Network, Jeanne Lim, former CEO of Hanson Robotics, Noah Gale, Simon Schwerin, Winslow Strong, Alan Laubsch, Stefano Bernardi, Yoon Kim, Anthony Yoon, Joeri van Geele, Simon Schwerin, Jake Vartanian, John Lee, Felix Machart, Jascha Samadi, Alexander Friedrichs, Kjell Fischer, Sebastian Blum, and Justin Wiley.
The continued development in decentralized finance (DeFi) is clear and ReSource aims to compete with other DeFi lending platforms in the market. Maria Alegre, Co-Founder and Managing Partner of Flori Ventures, a Celo-focused pre-seed fund that believes ReSource holds an advantage over its competitors “because of its potential for financial inclusion.”
“ReSource has built a product for real-world businesses to access the benefits of DeFi,” Alegre said. “Their novel stablecoin design enables these businesses to start spending and earning crypto today based upon their reputation rather than their knowledge or ownership of crypto.”
ReSource grants businesses access to interest-free, uncollateralized credit they can use to buy from each other on the ReSource Marketplace. Crypto startups cover their SaaS & Web 3 costs across the spectrum from blockchain node infrastructure hosting, crypto accounting & API calls.