A company that provides the infrastructure for cross-border payments , today announced it has closed a Series A funding round. Layer2 Financial raised $10.7 million, led by Galaxy Ventures, with participation from Accomplice and Sapphire Ventures, and intends to use the money to further its plans to “revolutionize the way money moves around the globe," the company said in a statement.
Layer2 Financial, a Toronto-based company, securely moves billions of dollars of both fiat and digital currencies across the world each year. Layer2’s customers include non-bank financial institutions, traditional banks, neobanks (also known as fintechs , such as Revolut and Monzo), enterprise organizations, and other payments companies.
"Our long term goal is to replace Swift over the next 10 years, and we're going to do that by building operations in a number of countries, with jurisdictions globally. And once we do that, money will never have to touch the Swift system," Bhanu Kohli, CEO and founder of Layer2 Financial, told Fortune . "It will basically go over a blockchain, from one jurisdiction to another," he added.
The company's multi-partner platform provides its customers with compliant payments for multiple currencies. Using its API, a customer can collect and send payments, in addition to transferring currencies (including from digital to fiat, and vice versa), using ACH, Fedwire, Swift, SEPA, and tokenized assets, among others. The platform is currently regulated in approximately 34 U.S. states, which constitutes the bulk of its businesses. It is also licensed in Canada and Europe.
AngelList , the American fundraising software company, which connects start-ups, angel investors and limited partners, is among Layer2 Financial's customers. "You may have an LP sitting in Europe or the U.K. that wants to invest into a fund in the U.S. on AngelList platform. AngelList uses us to collect from the LP," Kholi explained. So, for example, an LP might send $1 million of USDC to the platform, which is then converted into USD and sent to the fund, in less than 24 hours. If the LP had to send that money via Swift, it would take longer, explained Kholi.
Cross-border business-to-business payments are “fundamentally complex,” he added, but Layer2’s infrastructure makes the process “faster, more transparent, and cost-effective," Mike Giampapa, general partner at Galaxy Ventures, said in a statement. “The evolution of the payments system, especially leveraging digital assets and stablecoins alongside fiat, presents a unique opportunity that we are very excited to be a part of — Layer2’s platform is uniquely positioned to disrupt the traditional payments ecosystem,”
The company plans to utilize the funding to advance its product development, expand in new jurisdictions, and to grow its team.
This story was originally featured on Fortune.com
Most Popular
Comments / 0