Tradeteq, a technology provider for bank asset distribution with offices in Singapore and London, announced on Thursday the completion of its Series A funding round, securing $9.4 million from a consortium of US technology investors.
It brings the total funding raised by the company to over $16 million.
“This funding will allow us to speed up our product development, expand our geographical reach and ultimately reduce friction in the trade finance market,” Tradeteq co-founder and CEO Christoph Gugelmann said.
Tradeteq provides banks, credit insurers, and asset managers with technology and services to streamline asset distribution and reduce friction costs through automation, the company said. This includes the ability to package trade finance products into standardised investments that can be bought and sold through private distribution networks and settled like common fixed income products.
Tradeteq’s platform is being used by banks and non-bank financial institutions, such as members of the International Trade and Forfaiting Association (ITFA)-led Trade Finance Distribution Initiative, which benefit from real-time reporting and faster deal implementation, the company said.
Greater asset distribution also helps banks to reduce the ‘trade finance gap’ — the disparity between the amount of trade financing that corporations and SMEs need, and the amount that banks can lend without exceeding their capital and regulatory requirements, the startup said. This gap is $1.5 trillion, equivalent to 10% of the trade finance market, Tradeteq said.
The forthcoming Basel IV rules, which mandate higher capital requirements for banks, are set to increase the gap to $2.5 trillion, it added.
Institutional investors and credit insurers gain easier access to a low-risk asset class that is based on the flow of tangible goods. This makes it less susceptible to bouts of volatility observed in other financial markets.
Founded in London in 2016, Tradeteq is building the infrastructure to power trade finance investments and help transform trade finance into an efficient, transparent, and global financial market.
Tradeteq is the official technology partner of the Trade Finance Distribution Initiative, the industry-led group that sets the standards for global trade finance distribution.