Categories: Ethereum

Commercial Debt Market Goes Live With Backing From Coinbase Ventures

Click here to view original web page at www.coindesk.com

Cadence, an ethereum-powered marketplace for commercial debt, is out of its test phase.

The startup, which recently secured a place on the Bloomberg terminal for its pools of commercial loans, is now open to all institutional and accredited investors. Such users can now contribute funds to packages of short-term loans that help businesses cover payroll, inventory and other unexpected costs.

“Cadence is doing its part to help power the growth of small to medium-sized enterprises by providing them market-driven cost efficiencies,” Cadence founder and CEO Nelson Chu said in a statement. The loan packages are made transparent by the ethereum blockchain.

In private beta with select investors, Cadence saw $5.67 million pass through its offerings since January.

With the news, Cadence is also announcing the closure of a pre-seed round of venture funding. Led by Recharge Capital, a fintech-focused family office, the $2 million round also included Argo Ventures, the venture arm of Argo Group, a New York Stock Exchange-listed specialty insurance company; Coinbase Ventures, the investment arm of the unicorn cryptocurrency exchange; and InBlockchain, a leading crypto investor based in Asia.

The round also included individual investors, many of whom serve as executives at banks that might buy debt on Cadence. With more investors than he had room for on his cap table, Chu explained how he picked partners:

“The value is really in how much they can help us drive institutional adoption.”

The market for private credit is growing rapidly. According to a report by BNY Mellon, it first hit $1 billion in 2017, and it has since grown to a market in the hundreds of billions of dollars. In a widely cited forecast, the Alternative Credit Council estimates it should reach $1 trillion by 2020.

How it works

Cadence offers short-term loans paid to businesses to cover operational needs, targeting a 10 percent annual return. So a three-month loan term could return over 2 percent at maturity.

For a hedge fund, this can be a nice, reliable place to stick some excess capital without holding it up for too long, in case something really amazing pops up.

“We are by far the best ‘try before you buy’ model,” Chu said. “We’ve had hedge fund managers put in $500 to see if it works, and then it comes back with interest and they put in $25,000.”

Once an investor has their identity checks run and is granted access to the system, they’ll see an array of loans on offer and how much space is left in each round. All these offerings are also viewable inside the Bloomberg Terminal as well, for traders who live inside that system.

All the attributes of each pool – such as sector, risk profile, the originator and other details – are viewable on each loan. All the loans include multiple borrowers, to help spread out risk.

One advantage of getting into a pool is that previous investors get first dibs if it rolls over. If an instrument cycles over again, existing investors get a few days to renew their allocation before it opens up to new investors.

“If you go on any other private crowdfunding platform, the biggest complaint is you get locked out,” Chu said. “That first look, investors really appreciate.”

Cadence CEO Nelson Chu speaks at World Blockchain Forum New York 2018. Photo via Twitter/Cadence

The startup, which recently secured a place on the Bloomberg terminal for its pools of commercial loans, […]

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama
Tags: eth ether ethereum blockchain exchange platform

Recent Posts

  • Bitcoin Business

Robinhood App Encroaches on Banking Turf with High-Yield Money Tool

Popular stock market and crypto trading app Robinhood is going after legacy banks with the relaunch of a cash management… Read More

13 mins ago
  • Bitcoin Business

The blockchain/crypto week in quotes

“The world that Satoshi Nakamoto, author of the Bitcoin whitepaper envisioned, and others are building, is an unstoppable force.” US… Read More

13 mins ago
  • Bitcoin Business

Art and watch collectors: Here’s how blockchain can stamp out fakes

According to an OECD report on counterfeiting, the world trade in fake goods is worth upwards of S$624 billion a… Read More

13 mins ago
  • Bitcoin Business

Litecoin and the Miami Dolphins Join Hands Over Charity

Who would have known American football and cryptocurrency would go so well together? In a press release, The Miami Dolphins… Read More

6 hours ago
  • Bitcoin Business

Crypto News: Grayscale’s Record Inflows, Shell’s New Blockchain Investment

Increasing amounts of capital are flowing into the crypto and blockchain start-up markets. By following the money, investors can uncover… Read More

6 hours ago
  • Bitcoin Business

David Koepsell (YICB 07), Co-founder of Encrypgen, LLC and Blockchain in Healthcare Global

David Koepsell is the co-founder and chief executive officer of Encrypgen, a software company creating next-generation blockchain solutions for genomic… Read More

6 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More