Crypto Bank Let’sBit Closes a Pre-Seed Round Led by Angel Ventures

According to a report by Galaxy Digital Research, US$33 billion of venture capital that was invested around the world in 2021 went to crypto, blockchain and decentralized finance (DeFi) startups.

This figure suggests that we are likely to see even more investment in these sectors in Latin America. After all, Web3 and DeFi are two of the most attractive sectors for VC investors in 2022.

As we start to get used to this new destination for investment, the Argentinian crypto Let’sBit has some news: it has just raised a pre-seed round led by Angel Ventures for an undisclosed amount. Other investors such as Primary Ventures of Grupo MATBA-ROFEX, the main derivatives market in Argentina, also participated.

According to the press release, the new capital will be used by Let’sBit to leverage its growth in the Peruvian market. The company will seek to have a larger market share in Peru the same way it has done in Argentina and Colombia.

Crypto, What?

A crypto bank like Let’sBit doesn’t use the traditional banking infrastructure to offer banking services such as payments, transfers, credits and investments. For example, it does not use physical branches, proprietary technology or linkage with international transfer systems such as SWIFT. Instead, it uses crypto infrastructure built on top of blockchain protocols.

Santos Barrios, co-founder and CFO of Let’sBit, told Contxto that his company seeks to be a bridge between both infrastructures. “We are the connection with the traditional financial world. Our technology allows the bank accounts that users already have in traditional banks to be used for transferring their money into crypto and benefiting from putting it under DeFi protocols.”

According to Barrios, DeFi companies like Let’sBit solve some of the traditional banking system’s limitations. For example, interest rates are determined by regulatory issues; credits smaller than what is established cannot be given; transfer processes are complicated and, therefore, slow.

While fintech companies seek to simplify these processes by building products like a card and an app with good UX/UI experience, they are basically the same products.

“Crypto plays with completely different rules and allows for more innovative products that are more tailored to each user,” says the CFO. The reason? The protocols are more accessible to those who want to use them.

An example: if a user wants to use Compound, a protocol that allows lending and borrowing in crypto, they only have to integrate into the Compound blockchain through their wallet. “It’s not like in the bank, where I have to interact with a very complicated and limited user experience.”

This way, instead of putting your fiat money in a fixed-term investment that earns very little interest, Let’sBit allows you to turn your money into cryptocurrencies and place it under DeFi investment protocols, which give better returns.

The existence of more companies like Let’sBit also shows that not all crypto-related companies are necessarily cryptocurrency exchanges.

“We don’t see ourselves as an exchange like Bitso or Coinbase, but as an alternative to a bank,” explains Barrios. “What we are looking for, for example, is that people want to save in a stablecoin savings account. We do offer the purchase of cryptocurrencies, but we emphasize that what is best for the user is to save in stablecoins because they make better use of their money.”

In countries like Argentina, where the volatile price of the local currency directly affects savings and investments, the alternative of saving in stablecoins is certainly attractive.

Speed, Even in Growth

Let’sBit started in 2018. It was financed entirely by Barrios and his three other co-founders: Joaquín Gómez (COO), Agustín Abraham (CPO) and Camilo Cristia (CEO). They started to scale very recently and now have 50 thousand users, mainly in Argentina. The goal is to eventually reach the Mexican market.

In the last two years, Let’sBit has grown more than 50 times its size. This happened organically, based on customer revenue. Among its product offerings is also Pay On Rails, the company’s B2B payment and cryptocurrency processing API.

The company’s team consists of just over 50 people. By the end of 2022, it seeks to triple their number of clients. This would put Let’sBit on a path to compete directly with traditional banks in terms of market share and number of users.

You can also be interested in: Q&A | “Funding with Stablecoins Will Allow Us to Grow at an Accelerated Pace”: delt.ai