Amsterdam-based crypto payments infrastructure startup Fung has raised $2.7m in a pre-seed funding round co-led by by Global Founders Capital, Kingsway Capital, Kindred Capital and Karatage.
What does Fung do?
Fung is setting up the infrastructure to enable ecommerce merchants to accept crypto payments, handling the behind-the-scenes “payment rails” to convert digital assets into fiat money, as well as the compliance issues related to these transactions. To begin with, the company is targeting ecommerce SMEs.
Fung says it’s “on a path” to becoming fully regulated by the Dutch Central Bank for both fiat and crypto — and seems pretty confident it will secure this status, as it’s already billing itself as “the first regulated payments platform unifying crypto and fiat payment rails”.
Who’s investing in Fung?
- Global Founders Capital
- Kingsway Capital
- Kindred Capital
- Karatage
What’s the crypto payments infrastructure market like?
- Fung’s main, larger rivals are the crypto payments startup MoonPay and, as of fairly recently, Stripe. In Europe, Warsaw’s Ramp also handles on and off-ramping for crypto payments and the compliance issues that go with that, and it’s raised $65m to date.
- Fung is hoping that targeting a specific niche will give it an edge. The company says that SME ecommerce businesses that want to accept fiat and crypto payments have been left behind by the likes of MoonPay thus far.
- European regulators are grappling with how to regulate the crypto market — including questions about reporting transactions over a certain value (something that doesn’t happen with fiat currencies) and banning “unhosted” wallets, which are held by an individual rather than an exchange or financial institution.
- Places like Switzerland and Singapore have more rules specific to crypto in place, leading some crypto startups to base themselves out of these countries to avoid issues with regulation at a later stage of growth.
- If Fung manages to get its activities regulated by the Dutch central bank from an early stage, this will put it in an advantageous position as it’s less likely to reach a regulatory standstill when it has more clients on board further down the line.
What’s next for the company?
- Fung hasn’t fully launched just yet, but is currently allowing early sandbox access on its website. Cardano payments and merchant back office and reporting is live.
- Fung is in the process of launching Ethereum payments and fiat payments — and next up will be Solana payments, embedded checkouts and configurable payments in multiple currencies, along with issuing IBANs for merchants.
- The company is currently hiring for 12 team members.
- Location-wise, it’s starting out by targeting EU-based merchants. It’s currently reviewing local licensing laws so that it can expand into the UK, rest of Europe and LATAM and the US in future.
Sifted’s take
Taking on the likes of Stripe and MoonPay is no mean feat, and Ramp has been gaining considerable ground in Europe helping companies with crypto payments. But regulation is the golden ticket for these startups — it’s something everyone wants but no one’s got yet. If Fung does achieve this status in the Netherlands soon, this could give it an edge over competitors — and don’t underestimate the size of the SME ecommerce business market in Europe right now, either.
Amy O’Brien is Sifted’s fintech reporter. She coauthors Sifted’s fintech newsletter and tweets from @Amy_EOBrien.
Credit: Source link
