Mansa Raises $10M Seed Round for Stablecoin Liquidity

Stablecoins and the Future of Cross-Border Payments

As payment firms increasingly investigate the use of stablecoins for international transactions and immediate settlement, several startups are responding to this trend by offering stablecoin-based revolving lines of credit to provide liquidity.

Mansa's Seed Funding and Expansion

Dubai-based Mansa is one such company. It provides a solution enabling payment companies, primarily those operating in Africa, to settle transactions and fund customer accounts with speed.

The startup has successfully secured $10 million in seed funding, a combination of equity and debt financing. Tether, a leading stablecoin provider, spearheaded the $3 million equity investment.

These funds will be utilized to facilitate the company’s expansion into Latin America and Southeast Asia, regions where limited liquidity poses a significant obstacle to cross-border transactions.

Improving Cash Flow and Expertise

Mansa asserts that its approach enhances clients’ cash flow at a reduced cost compared to traditional fiat-based methods. This positions the company as a potentially pivotal force in the evolution of payment systems.

The co-founders, Mouloukou Sanoh (CEO) and Nkiru Uwaje (COO), possess extensive experience in finance, payments, and web3 technologies.

Sanoh, a seasoned investor in African fintech ventures, formerly held a position at web3 venture capital firm Adaverse. Uwaje previously served as an innovation manager at SWIFT and directed blockchain strategy for Dell in the U.K. and Ireland.

The Challenges of Cross-Border Payments

Cross-border payments are essential for global trade, yet many payment providers encounter liquidity constraints. This results in delayed settlements and increased operational expenses, particularly within emerging markets.

Globally, remittance costs average 6.5%, disproportionately impacting developing regions. With projections indicating cross-border payments will reach $290.2 trillion annually by 2030, inefficiencies in the current system could lead to substantial financial losses for businesses.

Mansa's Solution: Fast, Flexible, and Data-Driven

Mansa addresses these issues by offering rapid, adaptable, and embedded pre-funding solutions. The company completes its due diligence processes in under a month.

Unlike conventional lenders, Mansa bases its loan underwriting on real-time transaction data rather than requiring collateral. It also secures liquidity at scale through decentralized finance (DeFi).

The company aggregates capital from DeFi platforms, quantitative funds, family offices, and hedge funds.

Investment Details and Strategic Partnerships

During its seed round, Mansa obtained $7 million in liquidity from various institutions. Additional investors in the equity round, alongside Tether, include Faculty Group, Octerra Capital, Polymorphic Capital, and Trive Digital.

“Payments are moving on chain, but in order for payments to move on chain you need to have the on-chain liquidity to be able to settle instantly,” stated Sanoh in an interview with TechCrunch. “That is why our partnership with Tether is so consequential and why we’re working very closely together to make it the primary stablecoin in emerging markets.”

Focus on Tether's USDT

Despite the growth of USDC last year, the founders expressed confidence in Tether’s USDT, citing its widespread accessibility, flexibility in usage, and dominant market position. This position continues to strengthen alongside the increasing activity of on-chain payments, especially in emerging markets.

It’s noteworthy that Mansa’s clientele is not primarily located in Europe, where Tether, along with nine other digital assets, were recently delisted from EU-regulated platforms due to non-compliance with MiCA standards. However, Tether still commands a 70% market share in terms of trading volume among stablecoins globally.

Compliance and Risk Management

From a regulatory standpoint, Mansa emphasizes its commitment to compliance. The fintech recently appointed the former head of HSBC North Asia and the chief legal officer of Franklin Templeton to bolster its regulatory oversight.

The stablecoin liquidity platform is also developing robust risk frameworks for both liquidity and payments. These frameworks will ensure adherence to AML checks, sanction screening, KYC (Know Your Customer), KYB (Know Your Business), active transaction monitoring, and blockchain analytics tools. “We’re building a fintech, and we approach everything with that mindset,” Uwaje emphasized.

Tether's Support and Early Traction

Tether CEO Paolo Ardoino affirmed the stablecoin provider’s commitment to collaborating with Mansa and supporting its efforts to reshape global payment infrastructure.

To date, Mansa has disbursed over $18 million in financed payments to its clients, with access to more than $200 million in liquidity through its partner network. The fintech reports having no defaults thus far.

Growth and Future Plans

Mansa’s transaction volume has experienced significant growth since its launch six months ago, increasing from $1.6 million in August to $11 million in January, representing a monthly growth rate of 37.5%. The company has processed nearly $31 million in transactions during this period.

The company anticipates reaching a $1 billion total payment volume (TPV) run rate this year, a substantial increase from its current $240 million run rate, as disclosed by Sanoh.

The two-year-old fintech serves a diverse range of clients, including B2B payment platforms, virtual card providers, stablecoin infrastructure providers, forex platforms, and remittance companies operating in Africa, Latin America, and Southeast Asia.

Clients have reported a 30% increase in transaction volumes and a 10% revenue boost after integrating with Mansa. Meanwhile, Mansa’s revenues – generated from fees on financed transactions – have grown by 350% in the last six months.

Beyond Liquidity: A Vision for a Comprehensive Platform

Sanoh explained that lending is just the starting point for Mansa. “We’re starting by being the primary liquidity provider to the biggest payment companies across emerging markets.”

“From there, we can handle payouts and also offer additional services like foreign exchange. The goal is to create a one-stop payment platform where they can finance their payments, settle transactions instantly, and access foreign currency seamlessly — all in one place,” said the CEO, suggesting a potential evolution towards becoming an on-chain version of Stripe.