Masa Finance, a hybrid credit score protocol and decentralized credit score bureau based by Pngme CEO Brendan Playford in late 2020, has raised $3.5 million in pre-seed funding. In response to an announcement, the corporate seeks to “disrupt conventional centralized credit score infrastructure by offering people, companies and builders with the instruments to entry credit score” by way of blockchain expertise.
The core precept for blockchain facilities on the possession of property, together with cash and monetary knowledge. The system considerably tries to cut back the management of conventional monetary establishments resembling banks and credit score bureaus which have, for many years, collected and saved monetary data of the world’s banked folks.
Decentralized finance’s premise transcends this section of banked folks. Analysts have argued that the expertise can attain locations not coated by these monetary establishments. In response to them, blockchain can enable the unbanked to have sooner entry to providers resembling lending, borrowing and shopping for insurance coverage.
But, there’s nonetheless room for collaboration between each worlds, or at the very least in Masa Finance’s case, even because it targets underserved folks.
Masa Finance hyperlinks conventional monetary accounts and property from credit score bureau programs and financial institution knowledge to crypto holdings of customers. This connection permits the corporate to create non-fungible credit score studies for customers, which they will use to entry credit score and different monetary instruments.
“The imaginative and prescient that I’ve had for a really very long time has been how do credit score bureaus evolve and what would they seem like sooner or later,” founder Playford informed TechCrunch on a name. “The way forward for the Masa protocol is to be absolutely decentralized, turning governance and administration right into a DAO construction.”
Earlier than beginning Pngme, an open finance startup that has raised over $18 million in VC funding, Playford actively labored within the blockchain and crypto house for nearly a decade. Final February, he revealed that this involvement led him to supply short-term crypto loans to entrepreneurs, notably in Kenya and Tanzania — and conventional loans by way of Pngme earlier than pivoting to an open finance play.
Masa Finance is the results of these collective ventures. In response to Playford, the corporate is constructed on three blocks: unlocking monetary knowledge (which Pngme does), new sources of capital, and permitting people to personal their credit score historical past and share it with any lender themselves.
The startup’s web3 infrastructure works with over 10,000 off-chain knowledge sources from credit score bureaus, financial institution knowledge aggregators, and various knowledge throughout 78 countries permitting Masa to create on-chain credit score scoring for its customers.
Thus, by aggregating off-chain and on-chain knowledge right into a non-fungible credit score report, Masa says it offers lenders, and developers entry to the instruments wanted to consider borrower danger and launch lending merchandise for people and companies globally.
“The world we’re constructing for is the place folks’s knowledge are owned themselves. It will join an off-chain world with centralized knowledge to a brand new on-chain world that will probably be rising over the following 10 to twenty years,” remarked Playford, who runs Masa with the chief of workers Dusty Swartz. “So you’ll be able to join totally different knowledge sources to create a credit score profile saved on Masa in a decentralized manner and have sovereignty over your decentralized credit score profile.”
Masa says its on-chain knowledge covers 26 integrations, from exchanges to wallets — opening up a 4.95 billion-person market the place 67% are credit score invisible. These wallets embrace Binance, Coinbase, FTX, Gemini and Metamask.
“The explanation why they’re partnering with credit score bureaus is it will increase protection for essentially the most variety of customers. Our mission is to deliver the following billion folks to DeFi by offering credit score bureau studies. And to do this, you must assist present infrastructure and associate with these at the moment out there,” mentioned Playford when requested why Masa selected a hybrid mannequin as a substitute of a full decentralized mannequin.”
Playford mentioned Masa is constructing on Celo and Ethereum, and the platform, which is launching out of beta, has 36,000 folks signed up already. Most of its present customers are based mostly in sub-Saharan Africa — Nigeria and Kenya specifically. Customers from these international locations, together with Uganda and the Philippines, are liable for the very best quantity of loans acquired in Goldfinch, a lending protocol Masa Finance hopes to associate with quickly that raised $25 million from a16z and Coinbase Ventures in January.
Masa Finance says it has greater than 2,100 node operators on its stay testnet, supporting zero-knowledge personal transactions and good contracts. There are additionally as much as 300 developer registrations, with seven initiatives registered to combine. The primary credit score merchandise launching on the protocol embrace a credit score builder mortgage, uncollateralized loans and an SME line of credit score via its app, the corporate mentioned in an announcement.
Aided by the brand new capital, Masa claims to have recorded double-digit progress every month for the reason that begin of the 12 months. The spherical, which has no lead investor, comes from conventional and web3-focused VCs. They embrace Unshackled Ventures and Lateral Capital (backers of Pngme), executives from GoldenTree Asset Administration, Flori Ventures, and GSR. Different collaborating buyers are Decentranet Intersect VC, Peer VC, Alves Ventures and a few angel buyers within the fintech/blockchain house.
“This is Unshackled‘s second time backing Brendan Playford, and it’s no accident,” mentioned Manan Mehta, founding basic associate of Unshackled Ventures. “What Masa displays is a extra equitable future that gives entry to capital to a world inhabitants, largely ignored by conventional finance.”
What’s subsequent for Masa is to boost a seed spherical, it mentioned in an announcement. The next funding will enable the corporate to rent extra engineers, launch the protocol’s manufacturing launch, conduct a public token sale, scale node operators, and produce builders and lenders to the platform.