Crypto neo-bank Shield announced on Monday that it has successfully closed a $5 million seed funding round, spearheaded by Giant Ventures.
Founded in 2022, Shield shifted its focus to payment solutions in 2024, offering exporters and importers the ability to carry out cross-border transactions utilizing U.S. cryptocurrencies. Additionally, the platform provides vital compliance screenings to address potential sanctions and money laundering issues.
Co-founder and CEO Emmanuel Udotong expressed his motivation for creating Shield, stating that he and his team were “disappointed by the lack of competitive mainstream applications for cryptocurrency.” He noted that “bad actors” have dominated the headlines recently, underscoring the need for a legitimate solution.
Udotong recounted, “We aimed to leverage blockchain technology to solve tangible issues within the real economy.” He collaborated with his brother Isaiah and college friend Luis Carchi to explore how stablecoins could facilitate international payments, addressing a significant challenge they encountered while previously attempting to establish a trade business.
“Currently, trade enterprises in areas such as Latin America, Africa, and parts of Asia experience delays of days or even weeks for international wire transfers, incur exorbitant fees, and, in many cases, lack access to U.S. dollars altogether,” Udotong elaborated. “Numerous companies contend with limited trade corridors, reduced buyer access, inhibited growth, and, too often, outright failure.”
This is where Shield steps in, with aspirations to enhance the international reach and profitability of businesses by broadening customer access across various markets. The company is officially recognized as a money service business in the U.S. and as a cryptocurrency exchange in the EU.
After a challenging period, the crypto market has seen a remarkable resurgence over the past year, leading to the emergence of new unicorns and attracting substantial investments. Shield has reportedly facilitated over $100 million in payments since its inception, with $40 million of that volume occurring in just the past month. It is worth noting, however, that Shield is entering a competitive sector with a plethora of startups and established names like PayPal’s Xoom and Stripe’s Bridge vying for market share.
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Shield was introduced to its primary investors, Giant Ventures, through a mutual connection in the startup community. Other participants in the funding round include Chris Dixon’s a16z crypto startup accelerator, Factor Capital, with strategic angel investments from Coinbase and Bank of America. To date, the company has successfully raised a total of $7 million.
The newly acquired capital will primarily be directed towards securing additional banking partnerships. While two significant banking alliances have already been established, the names remain undisclosed. Furthermore, Shield aims to enhance its compliance product, encompassing broader licensing coverage, advanced transaction monitoring, fraud detection capabilities, and an increase in compliance team personnel and expertise, according to Udotong.
Ultimately, Udotong hopes that Shield will empower businesses by leveling the playing field in the global marketplace. “If we succeed, we’ll help businesses in underserved regions not only survive but thrive, creating employment opportunities and wealth for their communities, instead of leaving them behind,” he concluded.
