Trace Finance announced on Wednesday, June 17, that it raised US$32 million (R$162.5 million) in a Series A funding round, validating its role as a stablecoin banking infrastructure company and its decision to abandon plans to be the "bank for startups."
The startup reported that the funding round was led by Coinfund, an investment fund focused on crypto assets, and included a wide range of investors. There are 13 investment firms in total – in addition to Coinfund, the company received investments from Coinbase Ventures , Valor Capital , Haun Ventures, Jump Capital, HOF Capital, Polymorphic, SNZ, Titan Fund, Kadan Capital, Clocktower, FJ Labs, and Animoca.
The funding round also saw the participation of strategic investors, including Chainlink Labs, a company that developed a decentralized Web3 infrastructure platform, as well as founders and executives from the stablecoin, payments, and banking ecosystems. Among these names are Anatoly Yakovenko, co-founder of the Solana blockchain, and Ricardo Villela Marino, vice-chairman of the board of directors of Itaú Unibanco.
Without disclosing the valuation , but stating that the value "is around ten times greater" than the US$24 million the company was valued at in the seed round in 2022, when it raised US$4.3 million, Bernardo Brites, co-founder and CEO of Trace, tells NeoFeed that the round opens the way to new markets and serves as a "business card" to attract larger clients.
“Even processing billions of dollars in volume for the largest payment companies in Brazil and the world, we were a seed- round company that raised US$4 million,” he says. “There was a disconnect between how much we raised and our category, what we were doing, with a healthy and sustainable operation. Now, we will be seen as a serious and large institutional company.”
With the stamp of a company that has reached Series A funding, raising more than two of the leading startups with Brazilian founders and international recognition – Kalshi (US$ 30 million) and Brex (US$ 7 million) – Trace aims to expand into new markets around the world and consolidate its current ones, adding major global names to its portfolio.
The funding round was structured in the middle of last year with the intention of obtaining resources to open an office in Singapore, which will serve as a base for expansion throughout the Asia-Pacific region.
The plan also includes reaching the Middle East and expanding in locations where it already operates – Trace currently has operations in the United States , Mexico , Colombia, and Argentina , in addition to Brazil. In the case of Europe, the strategy is to continue operating through partners initially, eventually establishing an additional presence on the continent.
According to Brites, at least 20% of the resources will be used to meet the regulatory requirements of each region. This includes everything from meeting the minimum capital requirements set by local authorities and obtaining licenses to hiring local teams for compliance and operational matters.
Trace has been expanding its team recently. With offices in São Paulo and New York, the company grew from 23 employees in January to 48 in five months.
Brites wants to bring more "white heads" into the operation, meaning experienced professionals to help Trace break new ground. "We want to hire people who have spent 20 years in large banks, who have already done what we want to do on a large scale, and who have done it for decades," he says.
This funding round also consolidates Trace's position as an infrastructure company. In 2023, with the collapse of Silicon Valley Bank (SVB) , the bank for technology companies in Silicon Valley, the startup saw an opportunity to fill the void that had formed in the supply of banking services for startups.
Founded in 2021 by Brites, Leone Parise, and Rafael Luz, the Trace platform was used by startups to receive funds from investment rounds via foreign exchange, a service offered by SVB. With the collapse of the American bank, Trace launched its own bank account to meet this demand, in partnership with BNY Mellon . But it wasn't the only one to have this idea.
“When SVB collapsed, suddenly JP Morgan , First Republic, and even BTG Pactual and XP started banking this segment. We started having many competitors, bigger and better. So, we abandoned that idea in 2023 and started focusing on what we've always been very good at: high-volume payments and companies that require advanced technology to carry out these transactions,” says Brites.
The strategy proved successful. With over 700 clients, such as Buser and Conta Simples , Trace has processed more than US$10 billion since last year. The company does not disclose financial data, but Brites states that the company has already reached breakeven and that "we generated more revenue last year than we raised in the seed round."
