The fintech company Tribal has raised a funding round of US$40 million. The Stellar Development Foundation (SDF) and the risk funding company Partners for Growth (PFG) financed this round. This debt round is significant because it combines fiat money with stablecoins; it includes US$20 million in Stellar USDC (USD coin).
The reason why this financing has integrated Stellar USDC responds to Tribal’s interest in providing access to capital in an easier, cheaper, and faster way, according to Tribal’s chief strategy officer Mohamed Elkasstawi. The deal is one of the first hybrid debt rounds worldwide.
The new funds will be used to expand Tribal’s financing and payment services to small and medium enterprises (SMEs) throughout Latin America.
Towards the World of Crypto
A stablecoin is a cryptocurrency that is pegged to a “stable” asset in order to establish its price. This can be something such as a fiat currency or gold.
Elkasstawi explained that this type of currency is quickly growing, which proves that blockchain technology can have many different applications. Stablecoins are very useful for SMEs in emerging markets when it comes to solving some difficulties in accessing capital.
Interest rates fluctuate between 20% and 200% annually. In contrast, cryptocurrencies offer easier access to rates ranging from 10% to 50%. Something important to note is that this hybrid debt raise does not mean that Tribal will offer crypto services to its customers, who are mainly SMEs. Or, at least, not for now.
The fintech plans to continue making important announcements during the year, thanks to the US$34 million Series A investment it raised in 2021. Some of these plans include crypto-related products, according to Elkasstawi.
You might also be interested: Tribal will start operations in Peru, Colombia and Chile
