Many commentators see a natural marriage emerging between the worlds of digital currency and alternative finance.
One of the platforms attempting to bring that union to life has just received a €200,000 seed-stage cash injection. Bitbond is a peer-to-peer bitcoin lending platform catering to small business borrowers from all over the world. The fundraise was led by early-stage investment firm Point Nine Capital. The Berlin-based Bitbond is looking to use the money to attract more users to the platform, speed up the process of loan origination, and add to its programming team in order to improve the user experience. The platform is also reportedly planning new features such as exchange rate linked loans, user communication, analytical features and an improved mobile site.
Radoslav Albrecht, Founder of Bitbond, commented:
“Wallets, payment providers, brokers and exchanges are already on a fairly well-developed level.”
“Financial services are just at the beginning and Bitbond wants to contribute to a bitcoin ecosystem where financial inclusion isn’t just limited to cashless, instant worldwide payments.”
The Bitbond platform has facilitated just €36,000 of loans thus far – a number that is bound to veer upwards in the wake of this fundraise. The platform boasts a user base of 4,100 people – hailing from over 100 different countries. Those users have access to a global pool of loan deals and/or investors, using the global currency that is bitcoin.
Point Nine Capital Co-Fouder and Managing Partner Pawel Chudzinski weighed in on the unique benefits that Bitbond can offer:
“International payments are still very expensive if you’re using traditional banking services, especially when the transactions are small. To focus on Bitbond, I think lending smaller amounts of money internationally to private customers and small businesses is still rather unheard of.”
Rather unheard of indeed, although there are certainly a few platforms out there with some overlap. Emerging Crowd and Lendahand are two platforms that allow investors to invest, via equity and debt respectively, in SMEs within emerging markets. But Bitbond is not just limited to one kind of market. A brief glance at the loan listings on the platform reveals business borrowers from Indonesia, the US, and France all listed alongside one another.
A business that is borrowing from foreign investors will typically expose itself to fluctuating exchange rates when repaying both the principle and interest on a loan. Being a global currency, Bitbond borrowers will not have to wrestle with exchange rates. On the flip side, the value of bitcoins is highly volatile – a risk that both investors and borrowers on the platform will have to consider. We’ll track the progress of Bitbond with interest.