As payment companies increasingly look into stablecoins for international transactions and immediate settlements, several startups are harnessing this trend by offering liquidity through revolving credit lines backed by stablecoins.
One notable startup is Mansa, based in Dubai and focused on the African market. Their platform enables payment companies to instantly settle transactions and fund customer accounts. Mansa has successfully secured $10 million in seed funding, comprising both equity and debt, with Tether leading a $3 million equity round.
The capital will aid Mansa’s growth into Latin America and Southeast Asia, where liquidity issues pose obstacles to cross-border transactions.
Mansa claims its approach improves clients’ cash flow at a lower expense compared to traditional fiat options, positioning itself as a critical player in the future of payments. Co-founders Mouloukou Sanoh (CEO) and Nkiru Uwaje (COO) bring extensive expertise in finance, payments, and web3 technologies.
Sanoh has invested in numerous African fintech ventures and previously worked with the web3 VC firm, Adaverse. Uwaje served as an innovation manager at SWIFT and played a pivotal role in Dell’s blockchain strategy in the U.K. and Ireland.
Cross-border payments are vital for global trade, yet many payment service providers struggle with liquidity shortages, resulting in delayed settlements and elevated operational costs, especially in emerging markets. According to the World Bank, remittance costs average 6.5% globally, disproportionately impacting developing countries. With cross-border payments projected to hit $290.2 trillion yearly by 2030, inefficiencies in the present system could cost enterprises billions.
Mansa addresses these challenges by providing rapid and adaptable embedded pre-funding solutions, completing due diligence in under a month. Unlike conventional lenders, they base loan approvals on real-time transaction data instead of collateral, while they source liquidity at scale from decentralized finance (DeFi) platforms. They aggregate capital from a variety of sources, including DeFi platforms, quantitative funds, family offices, and hedge funds.
In its seed round, Mansa managed to secure $7 million in liquidity from several of these institutions. Additional investors in the equity round included Faculty Group, Octerra Capital, Polymorphic Capital, and Trive Digital, in addition to Tether.
“Payments are transitioning on-chain, and in order for that to happen, on-chain liquidity is crucial for instant settlements,” Sanoh remarked to TechCrunch. “That’s why our collaboration with Tether is so significant, and we are actively working together to make it the leading stablecoin in emerging markets.”
Despite the rapid expansion of USDC last year, Mansa remains optimistic about Tether, citing its widespread accessibility, adaptability, and dominant market position, which continues to grow with the increase of on-chain payment activities, particularly in emerging economies.
It’s worth noting that Mansa’s clientele is not located in Europe, where Tether and nine other digital assets have been recently delisted from EU-regulated platforms for failing to comply with MiCA regulations. Tether retains 70% market share in terms of trading volume among stablecoins worldwide.
On the regulatory front, Mansa prioritizes compliance. The fintech recently onboarded the former head of HSBC North Asia and the chief legal officer of Franklin Templeton to bolster its regulatory oversight.
Additionally, the stablecoin liquidity platform is developing comprehensive risk management frameworks for liquidity and payment services, ensuring compliance with AML regulations, sanction screening, KYC (Know Your Customer), KYB (Know Your Business), active transaction monitoring, and blockchain analytics. “We’re building a fintech, and every aspect of our approach reflects that mentality,” Nkiru emphasized.
In agreement, Tether’s CEO Paolo Ardoino stated that they are “delighted to partner with Mansa to support their initiative in transforming global payment frameworks.”
To date, Mansa has disbursed over $18 million in payment financing to its clients, backed by over $200 million in liquidity from its partner network. The company reports no defaults thus far.
Since its launch six months ago, Mansa’s transaction volume has surged from $1.6 million in August to $11 million in January, boasting a monthly growth rate of 37.5%. Over the same timeframe, it has managed nearly $31 million in processed payments. The firm anticipates achieving a total payment volume (TPV) of $1 billion this year, up from its current run rate of $240 million, according to Sanoh.
The two-year-old fintech caters to a diverse clientele, including B2B payment platforms, virtual card issuers, stablecoin infrastructure, forex platforms, and remittance services operating across Africa, Latin America, and Southeast Asia. These clients have reported a 30% increase in transaction volumes and a 10% boost in revenue since integration, Mansa stated. This has translated to a 350% growth in Mansa’s own revenue, generated from fees associated with financed transactions, over the past half-year.
While lending is Mansa’s initial focus, the company has broader aspirations, according to Sanoh. “We are starting by being the main liquidity provider for major payment companies in emerging markets,” the CEO stated. “From there, we can handle payouts and introduce additional services like foreign exchange. Our vision is to evolve into an all-encompassing payment platform where clients can finance payments, settle transactions instantly, and seamlessly access foreign currency—all in one location,” he added, highlighting an evolution that could position Mansa as an on-chain counterpart to Stripe.
Compiled by Techarena.au.
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