Masa Finance, a hybrid credit score protocol and decentralized credit score bureau based by Pngme CEO Brendan Playford in late 2020, has raised $3.5 million in pre-seed funding. In accordance with a press release, the corporate seeks to “disrupt conventional centralized credit score infrastructure by offering people, companies and builders with the instruments to entry credit score” through blockchain know-how.
The core precept for blockchain facilities on the possession of belongings, together with cash and monetary information. The system considerably tries to cut back the management of conventional monetary establishments akin to banks and credit score bureaus which have, for many years, collected and saved monetary data of the world’s banked folks.
Decentralized finance’s premise transcends this section of banked folks. Analysts have argued that the know-how can attain locations not lined by these monetary establishments. In accordance with them, blockchain can enable the unbanked to have quicker entry to companies akin to lending, borrowing and shopping for insurance coverage.
But, there’s nonetheless room for collaboration between each worlds, or no less than in Masa Finance’s case, even because it targets underserved folks.
Masa Finance hyperlinks conventional monetary accounts and belongings from credit score bureau programs and financial institution information to crypto holdings of customers. This connection permits the corporate to create non-fungible credit score stories for customers, which they will use to entry credit score and different monetary instruments.
“The imaginative and prescient that I’ve had for a really very long time has been how do credit score bureaus evolve and what would they appear to be sooner or later,” founder Playford informed TechCrunch on a name. “The way forward for the Masa protocol is to be totally decentralized, turning governance and administration right into a DAO construction.”
Earlier than beginning Pngme, an open finance startup that has raised over $18 million in VC funding, Playford actively labored within the blockchain and crypto area for nearly a decade. Final February, he revealed that this involvement led him to supply short-term crypto loans to entrepreneurs, notably in Kenya and Tanzania — and conventional loans through Pngme earlier than pivoting to an open finance play.
Masa Finance is the results of these collective ventures. In accordance with Playford, the corporate is constructed on three blocks: unlocking monetary information (which Pngme does), new sources of capital, and permitting people to personal their credit score historical past and share it with any lender themselves.
The startup’s web3 infrastructure works with over 10,000 off-chain information sources from credit score bureaus, financial institution information aggregators, and different information throughout 78 countries permitting Masa to create on-chain credit score scoring for its customers.
Thus, by aggregating off-chain and on-chain information right into a non-fungible credit score report, Masa says it offers lenders, and developers entry to the instruments wanted to consider borrower danger and launch lending merchandise for people and companies globally.
“The world we’re constructing for is the place folks’s information are owned themselves. This may join an off-chain world with centralized information to a brand new on-chain world that will probably be rising over the following 10 to twenty years,” remarked Playford, who runs Masa with the chief of workers Dusty Swartz. “So you may join completely different information sources to create a credit score profile saved on Masa in a decentralized method and have sovereignty over your decentralized credit score profile.”
Masa says its on-chain information covers 26 integrations, from exchanges to wallets — opening up a 4.95 billion-person market the place 67% are credit score invisible. These wallets embody Binance, Coinbase, FTX, Gemini and Metamask.
“The rationale why they’re partnering with credit score bureaus is it will increase protection for essentially the most variety of customers. Our mission is to deliver the following billion folks to DeFi by offering credit score bureau stories. And to do this, it’s a must to assist present infrastructure and accomplice with these presently out there,” mentioned Playford when requested why Masa selected a hybrid mannequin as an alternative of a full decentralized mannequin.”
Playford mentioned Masa is constructing on Celo and Ethereum, and the platform, which is launching out of beta, has 36,000 folks signed up already. Most of its present customers are based mostly in sub-Saharan Africa — Nigeria and Kenya particularly. Customers from these international locations, together with Uganda and the Philippines, are answerable for the very best quantity of loans acquired in Goldfinch, a lending protocol Masa Finance hopes to accomplice with quickly that raised $25 million from a16z and Coinbase Ventures in January.
Masa Finance says it has greater than 2,100 node operators on its dwell testnet, supporting zero-knowledge non-public transactions and sensible contracts. There are additionally as much as 300 developer registrations, with seven tasks registered to combine. The primary credit score merchandise launching on the protocol embody a credit score builder mortgage, uncollateralized loans and an SME line of credit score by means of its app, the corporate mentioned in a press release.
Aided by the brand new capital, Masa claims to have recorded double-digit development every month for the reason that begin of the yr. The spherical, which has no lead investor, comes from conventional and web3-focused VCs. They embody Unshackled Ventures and Lateral Capital (backers of Pngme), executives from GoldenTree Asset Administration, Flori Ventures, and GSR. Different collaborating traders are Decentranet Intersect VC, Peer VC, Alves Ventures and a few angel traders within the fintech/blockchain area.
“This is Unshackled‘s second time backing Brendan Playford, and it’s no accident,” mentioned Manan Mehta, founding normal accomplice of Unshackled Ventures. “What Masa displays is a extra equitable future that gives entry to capital to a worldwide inhabitants, largely ignored by conventional finance.”
What’s subsequent for Masa is to lift a seed spherical, it mentioned in a press release. The next funding will enable the corporate to rent extra engineers, launch the protocol’s manufacturing launch, conduct a public token sale, scale node operators, and convey builders and lenders to the platform.