21 January 2021 – Tradeteq, the technology provider for bank asset distribution, has announced the successful completion of its Series A funding round, securing USD9.4 million from a consortium of US technology investors. It brings the total raised since the company launched to more than USD16 million.
Tradeteq provides banks, credit insurers and asset managers with technology and services to streamline asset distribution and reduce friction costs through automation. 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 a diverse range of bank 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. Tradeteq is already processing tens of thousands of trade finance instruments every year for its users.
Greater asset distribution also helps banks to reduce the ‘trade finance gap’ – the disparity between the amount of trade financing corporations and SMEs need, and the amount that banks can lend without exceeding their capital and regulatory requirements. This gap is worth USD1.5 trillion, equivalent to 10 per cent of the trade finance market. The incoming Basel IV rules, which mandate even higher capital requirements for banks, are set to increase the gap to USD2.5 trillion.
Meanwhile, 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.
Christoph Gugelmann, Co-Founder and CEO of Tradeteq, says: “Trade finance distribution is more than just allowing banks and investors to transact assets. It is about fundamentally transforming the way trade finance divisions, and the wider global trade ecosystem, operate. Greater automation and digitisation are key to increasing efficiency and unlocking the potential value of this market. This funding will allow us to speed up our product development, expand our geographical reach and ultimately reduce friction in the trade finance market.
“The completion of our Series A round marks an important milestone for Tradeteq. The significant interest we received in our latest funding round is proof that the industry shares our vision to address a key barrier for financing that many businesses face, help banks manage their regulatory requirements and close the ever-expanding trade finance gap.”
Vittal Kadapakkam, a private technology investor who joined the Tradeteq board as an investment director, added: “I am excited to invest in Tradeteq's world-class management team and in their vision to create more automation and efficiencies through digitisation of trade finance. We are at the early stages of a massive opportunity to transform the asset distribution market.”