STACS Secures $3.6 Million in Pre-Series A Funding

STACS Pte Ltd, a fintech company headquartered in Singapore, has announced the successful completion of a $3.6 million USD pre-Series A funding round. The company specializes in the development of blockchain platforms designed for seamless integration with the current infrastructure utilized by financial institutions.

Core Technology and ESG Focus

STACS’ foundational technology also underpins GreenSTACS, a platform dedicated to facilitating investments centered around environmental, social, and governance (ESG) principles. This funding round was spearheaded by Wavemaker Partners, a venture capital firm concentrating on enterprise and deep tech ventures within Southeast Asia.

Investor Participation and Government Backing

The Tribe Accelerator, a blockchain startup program supported by the Singaporean government, also participated in the investment. Notably, STACS was a participant in the Tribe Accelerator program last year, alongside Project Ubin, the Monetary Authority of Singapore’s initiative for blockchain-based multi-currency payments.

Total Funding and Future Plans

Since its establishment in 2019, STACS has accumulated over $6 million in funding. The company is currently preparing for a Series A funding round anticipated later this year.

Addressing Fragmentation in Financial Systems

A primary objective of STACS is to resolve the fragmentation inherent in the technological systems employed by financial institutions. This fragmentation often leads to capital immobilization within international clearing systems, increased transaction costs, and penalties associated with failed trade settlements.

The STACS Blockchain Solution

The company’s central offering is a technology stack built upon the STACS blockchain. This allows for the integration of various platforms, including payment systems like Ubin, trading platforms, and external software such as user management systems. Furthermore, it supports the implementation of smart contracts and digital ledgers.

Client Base and Product Offerings

STACS’ product portfolio includes a real-time trade processing platform currently utilized by prominent clients like Eastspring Investments and BNP Paribas Securities Service. Additional clients include Deutsche Bank, Bursa Malaysia, EFG Bank, and Bluecell Intelligence.

Benjamin Soh, co-founder and managing director of STACS, indicated to TechCrunch that the company aims to establish a network encompassing over 30 institutions by the year’s end.

GreenSTACS: Monitoring ESG Investments

Launched last month in collaboration with Bluecell Intelligence, GreenSTACS is designed to assist companies in the certification and monitoring of green and sustainability-linked loans and bonds.

Addressing Challenges in ESG Impact Monitoring

According to Soh, STACS received significant demand from financial institutions seeking effective impact monitoring for ESG projects. However, these institutions faced challenges due to “asymmetric information sources, a lack of common data infrastructure, and the inherent inefficiency in serving ESG financing.”

Vision for GreenSTACS

STACS intends to position GreenSTACS as the standard infrastructure for ESG financing and impact monitoring. The platform allows for the programming of loan and bond parameters into security tokens and connects with data sources – such as IoT devices or satellite imagery – to generate real-time impact reports on a distributed ledger.

Combating Greenwashing

This functionality is intended to mitigate “greenwashing,” the practice of misrepresenting the environmental or sustainability benefits of a product or service.

Soh stated that this approach will “boost investors’ and banks’ confidence with green financing by ensuring green money is strictly used in achieving pledged green goals and policies.”

Wavemaker Partners' Perspective

Gavin Lee, general partner at Wavemaker, commented in a press release, “There is an immense opportunity to help financial institutions process large volumes of trade more quickly, securely and accurately while reducing costs and illiquid capital.”

He further added, “As an enterprise distributed ledger technology provider, STACS has productized a secure layer that can be deployed instantly above existing infrastructure. Enterprise sales is never easy for young companies, but Benjamin is a convincing and seasoned serial entrepreneur who has secured numerous leading financial institutions as key clients.”