Stacs, a Singapore-based blockchain development startup that offers distributed ledger technology to financial firms, has secured USD 3.6 million from its pre-Series A funding round led by Wavemaker Partners.
The round, with participation by Singapore-based Tribe Accelerator and existing shareholder Stellar Partners, has raised the firm’s total funding to USD 6 million. The new capital will support the firm’s ambition to expand its ecosystem of leading financial institutions and building sustainable technology infrastructure, according to its statement on Tuesday.
The fintech startup hopes to tackle the pain points of fragmentation in financial markets where institutions have operated on different systems and ledgers. This is a “linearly dependent process” which leaves USD 800 billion of capital being locked up every day in the international clearing system, according to Stacs’ chairman, Ray Ferguson.
“On top of that, due to multiple layers of processing, nearly USD 300 billion is being spent on transaction costs in a model that one would be hard-pressed to argue is efficient. In Europe, about 6% of trades fail to settle, resulting in EUR 35 billion in penalties annually. This is all wastage—wasted time, wasted money, wasted carbon footprints—that we at Stacs are committed to addressing through our distributed ledger technology,” he added.
The news comes at a time when Southeast Asia’s state banks and bourses have flocked to leverage blockchain technology on bond issuance. In January, Singapore’s government investment company Temasek and its bourse formed a joint venture to tap distributed ledger technology to beef up its digital infrastructure of digital asset issuance and resettlement.
Last December, Stacs also announced the completion of a blockchain pilot project with Malaysia’s national stock exchange Bursa Malaysia, taking place in Malaysia’s offshore market Labuan, in collaboration with the Labuan Financial Exchange (LFX), a wholly owned subsidiary of Bursa Malaysia, Fintech News Malaysia reported.
The startup has helped to create a blockchain-powered platform that enables a single source of information being stored in a shared, distributed database between Bursa Malaysia and participating banks, including CCB Labuan, CIMB, and Maybank. This is a solution that stimulates bond issuance on the platform.
“The value of being able to tap such an ecosystem is immense. There is a huge amount of potential in Singapore, which is fast-emerging as a regional blockchain hub, and we look forward to further supporting Stacs and companies within our ecosystem,” said Tribe CEO Yi Ming Ng.
Founded in 2019, the firm also counts notable financial institutions as its customers, including Deutsche Bank, BNP Paribas, Eastspring Investments, EFG Bank, and Bluecell Intelligence. It is set to announce a Series A funding round “later this year,” according to the release.