Decentralized finance brings new credit instruments to startups. This results in more money channeled directly to innovation. In the end, DeFi reaches those who would only sometimes have access to funding for their new businesses, which brings diversity to the market.
For Hugo Mathecowitsch, founder and CEO of fintech a55, it is past time to think of other ways to finance companies since the classic format, in which banks centralize the operations, has only benefited a small portion of people and companies.
a55: business loans in the new economy
Created in 2017 by Hugo and his partner André Wetter, a55 was the first fintech in Brazil that developed specific solutions for loans for the new economy businesses, accelerating more than 600 Brazilian and Mexican companies.
One of the reasons for the creation of the fintech was the credit supply scenario in Brazil.
“Nowadays, if you want to receive large funding in Brazil, you must preferably be male, straight, white, speak English, and have studied at an American university. Having that, you are in the 0.01% of people eligible to have a venture capital partner”, Mathecowitsch points out.
To have another form of investment, which is to have a partnership, the companies also enter a short list of eligible people since they need to be publicly traded for this.
“The credit market organized as an Exchange does not exist in Brazil or in the world. For every corporate transaction, there are 20 credit transactions. The corporate transactions market is small and has a minor parcel that accesses the capital markets”.
According to the CEO of a55, it is because the credit market has been “treated through the bank logic”. DeFi can change such a scenario by decentralizing operations and allowing each person to invest directly in others securely.
“Why can we buy a stock on the stock exchange but not have the possibility of using savings to finance companies openly?. According to the executive, DeFi can create mechanisms and infrastructure for users to lend money to each other.
Credit solutions from DeFi
Recently, a55 launched DeFi-TradFi. in partnership with Credix. The new line used a credit protocol based on the Solana blockchain to raise funds to finance companies.
“DeFi can bring gains in time and transparency, as well as access to a larger investor base”, comments Mathecowitsch, who is already preparing a new protocol release for the Mexican market.
The lines of code, says the CEO, manage to be cheaper, faster, and more reliable, besides offering the option for individuals to invest and international users to enter the Brazilian market.
Since 2018, a55 has been operating a lending methodology: financing based on future revenue.
“We were able to forecast companies’ future revenue, granting the financing in advance. It is a way to bring credit instruments to the connected economy”, comments the CEO.
Startups with recurring revenue, as well as other technology companies, usually have a varied amount of data that can be analyzed to prospect the revenue forecast.
“The data can derive from payment systems, social networks, ERP, CRM, or even be related to the exchange rate. On the other side, we raise investment means to be able to finance these credits”, Mathecowitsch exemplifies.
Since 2018, a55 sums more than a thousand operations completed, and more than R$ 400 million have been granted in credit for startups in Brazil and Mexico.
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