Grain Raises $50M to Hedge Against FX Volatility

Foreign Exchange and Business Operations

Fluctuations in foreign exchange rates can significantly impact businesses engaged in international trade. However, effectively monitoring and reacting to the FX market presents a challenge, particularly for companies that aren't global enterprises.

Introducing Grain: A New Approach to FX Hedging

Grain, a newly launched startup, is addressing this issue with a product designed to help finance teams of all sizes better understand and respond to FX changes through transaction hedging. The company has secured over $50 million in funding and has already processed more than $1 billion in transactions during its stealth phase.

The Scale of Cross-Border Transactions

While $1 billion is a substantial figure, it represents a small fraction of the total global cross-border transaction volume. Grain estimates that over $150 trillion in such transactions occur annually, highlighting the company’s potential for growth.

Funding Details

Grain’s funding was secured in two rounds. A recent $33 million Series A round was led by Bain Capital Ventures, with participation from existing investors Aleph, Vesey Ventures, and Hanaco Ventures. Prior to this, the Tel Aviv-based company raised an $18 million seed round.

Grain’s Core Concept

Founded in 2022, Grain’s product leverages concepts proven successful in other areas of fintech.

Traditional FX Trading vs. Grain’s Solution

Traditionally, FX trading is primarily utilized by large corporations working with investment banks. These entities actively monitor markets and employ derivative algorithms to manage currency purchases and sales, aiming for stable balances and profitability.

This is particularly beneficial when a U.S. company, for instance, sells goods in a market experiencing currency devaluation. Hedging against FX fluctuations can help maintain optimal revenue and margins.

However, access to these benefits has historically been limited to very large organizations.

Democratizing FX Hedging

Grain’s product is built on the principle of scaling this concept to smaller transactions. Drawing parallels to Robinhood’s fractional share investing, Grain utilizes FX derivatives and artificial intelligence to identify optimal hedges. Multiple trades are then aggregated to achieve economies of scale.

This process is seamlessly integrated into existing financial interfaces used by finance teams for data analysis. The resulting currency adjustments can then inform pricing strategies across various marketplaces.

A New Paradigm for Derivatives

As Grain’s co-founder and COO, Michal Beinisch, states, “What Stripe did for payments, we have done for derivatives.”

The Team Behind Grain

Grain’s ability to attract significant funding while operating in stealth mode is largely attributed to the experience of its founding team, all of whom have backgrounds in financial services.

Founders’ Expertise

Dor Golan, CEO and co-founder, previously served as a managing partner at Blue Orca Capital and co-founded Horizon, a crypto liquidity firm. Aharon Navon, chief business officer, formerly led Barclays CEEMEA FX and rates trading.

Michal Beinisch was the COO of Barclays Israel and global head of Rise, Barclays’ fintech innovation platform, while Nir Galon, chief product officer, has held product leadership roles at Melio, Bluevine, and Rewire.

Investor Confidence

The Series A round was led by Mark Fiorentino of Bain Capital Ventures, who previously held a key role at Stripe. This demonstrates strong investor confidence in Grain’s potential.

Key Strengths of Grain

Fiorentino emphasized the importance of “founder-market fit,” highlighting the team’s unique technical and commercial expertise in cross-border payments and banking connectivity. He also noted Grain’s AI-native, user-centric approach, which promises greater stability, cost savings, and revenue improvements for customers while streamlining operations.

Conclusion

Grain is poised to disrupt the FX hedging landscape by making sophisticated financial tools accessible to businesses of all sizes. By leveraging technology and a team with deep industry experience, the company aims to empower organizations to navigate the complexities of international trade with greater confidence and control.