Untangled Finance Launches DeFi's First Institutional Private Credit Pool

London, UK — 2nd May, 2024 — Untangled Finance, a real-world asset (RWA) DeFi protocol underpinned by institutional-grade assets, has announced the launch of its first on-chain securitization pool on the Celo blockchain. This marks a significant milestone in bringing private credit into the decentralized finance ecosystem with enhanced security measures. 

Structured under Luxembourg's established securitization framework, and open to accredited investors who complete a robust KYC process, the pool utilizes comprehensive asset ring-fencing to protect assets against the risk of originator bankruptcy. Collateralized by a diverse portfolio of French working capital assets originated by Karmen, a fintech lender specializing in instant loans and working capital for digital small and medium-sized enterprises (SMEs) in France, the pool has established a debt ceiling of $6 million USDC. Verified investors gain access to pool-specific credit analytics and other relevant documentation. The Credit Collective, a Celo community-led consortium of builders and investors has provided an early commitment. Backed by Fasanara Capital as the senior lender, this initiative is part of a broader €100 million senior facility agreement being finalized with Karmen. 

Commenting on the launch, Manrui Tang and Quan Le, Co-Founders of Untangled Finance, stated, "Traditionally, private credit has been accessible primarily to large financial institutions due to complexities in asset vetting and liquidity issues. At Untangled, our goal is to democratize access to these investment opportunities for DeFi investors worldwide in a risk-adjusted manner, while enhancing capital access and making financing more accessible for the growth engines of economies—SMEs. As stablecoins continue to gain traction, these high-quality private credit securities provide robust backing, significantly enhancing their stability and reliability as a medium of exchange."

Founded in 2020, Untangled leverages blockchain technology to tokenize real-world collateral, such as invoices and SME loans, making it available to investors globally. In turn, this streamlines access to capital markets for SMEs around the world, particularly those in emerging markets. 

“The Untangled Finance team is pioneering private credit tokenization,” said Isha Varshney, Head of Ecosystem at the Celo Foundation. “By bringing fintech lending onchain with an innovative credit assessment models, Untangled showcases the potential of tokenized real-world assets to improve access to funding and risk management for entrepreneurs and businesses worldwide.”

Francesco Filia, CEO of Fasanara Capital, remarked on the impact of this integration, “The integration of sophisticated fintech lending with the digital asset ecosystem through Untangled Finance represents a transformative shift in finance. This initiative foresees a significant expansion in the tokenized debt market, and sets new benchmarks for available asset classes in the rapidly evolving landscape of decentralized finance.”

Untangled has access to over 140 fintech lenders, each rigorously vetted and funded by Fasanara through a detailed due diligence process that can span up to eight months. Following the initial Karmen token pool, several additional pools will be launched, including the Fasanara Diversified Fund on-chain, and a senior note backed by Eastern European invoice finance assets. 

Gabriel Thierry, Co-Founder & CEO of Karmen, highlighted the operational synergies, saying, “Our collaboration with Untangled Finance has revolutionized access to capital for fintech originators, bridging the gap between traditional finance and DeFi technology, thereby enabling Karmen to accelerate its deployment of working capital loans for French SMBs.” 

Today’s launch of Untangled’s credit pool on Celo is the latest development in a period of booming RWA-related activity on the blockchain. Earlier this year, USDC and USDT deployed natively on Celo. The integrations allow users to leverage the stablecoins for transactions and to pay gas fees. 

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About Untangled Finance:

Founded in 2020 by two industry veterans in traditional finance and RWA tokenization, Untangled sets itself apart by exclusively working with institutional-grade private credit assets, secured through a robust securitization structure. The protocol has pioneered the first RWA credit oracle infrastructure, enabling dynamic pricing of RWAs with comprehensive on-chain monitoring of asset performance and underlying collateral. Additionally, the protocol incorporates a built-in liquidation mechanism to facilitate price discovery and provide exit opportunities for investors. With these innovations, Untangled is leading the charge in RWA Credit 2.0. For more, visit Untangled.Finance

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