XREX bags $17 million in pre-series A funding round

XREX Raises $17M to Expand Fiat Currency Portfolio and Partnerships

Inclusion Times
Inclusion Times

Blockchain technology has the potential of solving cross border transactions, and XREX, a blockchain startup that tapped into this technology to solve dollar liquidity shortage issues in emerging markets, has closed a $17 million pre-Series A round.

CDIB Capital Group led the round. It included participation from SBI Investment (a subsidiary of SBI Holdings), Global Founders Capital, ThreeD Capital, E.Sun Venture Capital, Systex Corporation, MetaPlanet Holdings, AppWorks, BlackMarble, New Economy Ventures and Seraph Group. XREX’s last funding was a $7 million seed round in 2019.

CDIB Capital Innovation Fund head Ryan Kuo said in a statement about the funding, “CDIB was an early investor in XREX. After witnessing the company’s fast revenue growth and their commitment to compliance, we were determined to double our investment and lead this strategic round.”

Founded in Aug 2018, Blockchain startup XREX was launched to help cross-border businesses in emerging markets perform faster transactions with products like a payment escrow service and crypto-fiat exchange platform. XREX will use part of the funding to apply for financial licenses in Singapore, Hong Kong and South Africa and partner with banks and financial institutions, like payment gateways.

“We specifically wanted to build a regulatory-friendly cap table,” XREX co-founder and chief executive officer Wayne Huang said in an interview with TechCrunch. “It’s really hard for a startup like us to raise from banks and public companies, but as you can see, this round we deliberately to do that, and we were successful.”

How XREX works

To use the platform, merchants and their customers sign up for XREX’s wallet, including a commercial escrow service called Bitcheck. According to Huang, it is similar to having a standby letter of credit from a commercial bank. Buyers can use it to guarantee they will be able to make payments. Bitcheck uses digital currencies like USDT and USDC, stablecoins that are pegged to the U.S. dollar.

Merchants pay stablecoin to suppliers, and XREX escrows the funds until the supplier provides proof of shipment, at which point it moves the payment to them. XREX’s crypto-fiat exchange allows users to convert USDT and USDC to U.S. dollars, which they can also withdraw and deposit through the platform.

CEO Huang also pointed out that the company will use part of the latest funding round to expand its fiat currency platform, but they are looking to add more cryptocurrencies. He said, “because we’re not built for crypto traders, we’re built for businesses, and brand matters to them. Brand and compliance, so whatever the U.S. Comptroller of the Currency says is a good stablecoin is what they’re going to use.”

NewsDigital inclusionFinancial inclusion