a16z Crypto Shield Raises $5M for International Crypto Transactions

Shield Secures $5 Million Seed Funding to Revolutionize Cross-Border Payments

Shield, a crypto neo-bank, announced Monday the successful completion of a $5 million seed funding round. The investment was spearheaded by Giant Ventures.

From Launch to Payments Focus

Established in 2022, the company strategically shifted its focus to payments processing in 2024. Shield facilitates cross-border transactions for exporters and importers, utilizing U.S. dollar-based cryptocurrencies.

The platform also incorporates crucial compliance measures, actively addressing concerns related to sanctions and potential money laundering activities.

Addressing a Gap in the Crypto Landscape

According to Emmanuel Udotong, co-founder and CEO, Shield was born from a dissatisfaction with the limited practical applications of cryptocurrency. He noted a prevalence of illicit activities dominating the crypto space.

“We aimed to integrate blockchain technology into the mainstream economy by providing solutions to tangible problems,” Udotong explained to TechCrunch. He collaborated with his brother, Isaiah, and close friend, Luis Carchi, to explore the potential of stablecoins in international payments.

The Challenges of International Trade

The founders personally experienced the difficulties of international trade while attempting to establish their own business. They recognized a significant pain point in the existing system.

“Businesses in regions such as Latin America, Africa, and Asia frequently encounter delays of days or weeks for international wire transfers,” Udotong stated. “They also face substantial fees and often lack access to U.S. dollars.”

These limitations can restrict trade opportunities, hinder growth, and even lead to business failures.

Shield's Solution: Expanding Market Access

Shield intends to empower international businesses by broadening their reach and increasing profitability through improved access to diverse markets. The company operates as a registered money service business within the U.S.

Furthermore, it is registered as a crypto exchange in the European Union, ensuring regulatory compliance.

A Resurgent Crypto Market

The cryptocurrency market has experienced a notable resurgence in the past year, with the emergence of new unicorns and substantial investment inflows. This follows a period of reputational challenges.

Since its inception, Shield has processed over $100 million in payments, with $40 million occurring in the most recent month alone.

However, the company enters a competitive landscape, facing numerous startups and established players like PayPal’s Xoom and Stripe’s Bridge.

Investors and Future Plans

Shield connected with its lead investor, Giant Ventures, through a mutual founder connection. Additional investors include Chris Dixon’s a16z crypto startup accelerator, Factor Capital, and strategic angel investors from Coinbase and Bank of America.

To date, the company has raised a total of $7 million.

The newly acquired capital will be allocated to strengthening banking partnerships – Shield currently maintains relationships with two key banking institutions, though their identities remain undisclosed.

Investment will also be directed towards enhancing the company’s compliance infrastructure.

Strengthening Compliance and Global Competitiveness

“This includes broadening our licensing coverage, improving transaction monitoring and fraud detection capabilities, and expanding our compliance team’s expertise,” Udotong clarified.

Ultimately, Udotong envisions Shield leveling the playing field for businesses operating on a global scale.

“Our success will translate into increased survival and growth for businesses in underserved regions, fostering job creation and wealth generation within their communities,” he concluded.