Decentralized credit protocol Goldfinch has raised $25 million in a Series A extension round led by Andreessen Horowitz (a16z), which had led the protocol’s $11 million Series A round last June.
Goldfinch serves as an open marketplace for loans without collateral using a decentralized loan underwriting process. The Goldfinch protocol extends credit lines to lending businesses, which can draw stablecoins from the Goldfinch pool and then deploy the capital to local borrowers. Goldfinch provides the access to global capital but leaves the loan origination and servicing to the lending businesses.Investors can deposit crypto into the Goldfinch pool to earn yield. When lending businesses make interest payments back to Goldfinch, the money is disbursed to all of the participating investors.Goldfinch has grown its outstanding loan volume from $250,000 a year ago to over $38 million. The protocol is serving over 200,000 borrowers in 18 countries. Goldfinch capital is being used for a wide range of uses, including motorcycle taxis in Kenya and small businesses in Brazil.“By removing the need for crypto collateral and providing a means for passive yield, Goldfinch is dramatically expanding lending to more potential borrowers and capital providers,” wrote a16z General Partner Arianna Simpson in an announcement post.Other investors in the round included noted hedge fund manager Bill Ackman, crypto investment firm BlockTower and investment management firm Kingsway Capital.Goldfinch also announced in a post on Medium that it was restructuring. The company has launched the Goldfinch Foundation to help move the protocol into its next phase of growth. The initial team behind Goldfinch is spinning out into Warbler Labs, which will become a separate organization contributing to the Goldfinch community and broader decentralized finance (DeFi) ecosystem.