a16z crypto-backed Shield raises $5M to help facilitate international business transactions in crypto

On Monday, Shield, a crypto neo-bank, announced it has successfully raised $5 million in its seed funding round, which was spearheaded by Giant Ventures. Since its inception in 2022, the company has shifted its focus to payment solutions as of 2024, enabling exporters and importers to execute cross-border transactions using US cryptocurrencies. Moreover, Shield emphasizes compliance by offering screenings to combat issues related to sanctions and money laundering. Emmanuel Udotong, co-founder and CEO of Shield, expressed his motivation behind launching the platform, citing frustration with the limited mainstream applications of cryptocurrency. "While the space has been tarnished by bad actors, we aimed to integrate blockchain technology into the tangible economy by addressing real-world challenges," Udotong shared with TechCrunch. Together with his brother Isaiah and college friend Luis Carchi, he identified a pressing need for stablecoins to facilitate international payments, a challenge they encountered while attempting to establish a trade business in the past. Udotong highlighted the difficulties faced by trade businesses in regions such as Latin America, Africa, and parts of Asia, which often experience delays of days or even weeks for international wire transfers, incur exorbitant fees, and frequently lack access to US dollars. "The limitations in trade corridors and buyer opportunities can hinder growth and, in some cases, lead to business failure," he noted. Shield aims to empower international businesses to expand their reach and profitability by connecting them with customers across diverse markets. The company is officially registered as a Money Service Business in the US, as well as a crypto exchange in the EU. Following a significant resurgence in the crypto sector this past year, which has seen the emergence of new unicorns and substantial investments, Shield reported processing over $100 million in payments since its launch, with an impressive $40 million processed just last month. Despite its promising start, Shield enters a competitive landscape dominated by numerous startups and established players like PayPal’s Xoom and Stripe’s Bridge. Udotong revealed that the company connected with its lead investors, Giant Ventures, through a mutual founder. Other participants in this funding round include Chris Dixon’s a16z crypto startup accelerator, Factor Capital, along with strategic angel investors such as Coinbase and Bank of America. To date, Shield has raised a total of $7 million. The newly acquired capital will primarily be allocated to securing additional banking partnerships, as the company currently collaborates with two main banking partners, although their identities remain undisclosed. Furthermore, Shield plans to enhance its compliance offerings, which includes expanding licensing, improving transaction monitoring and fraud detection, and increasing the expertise within its compliance team. Udotong envisions that Shield will provide businesses in underserved regions with a better opportunity to thrive in the global marketplace. "If we are successful, we will enable more businesses in these areas to survive and flourish, ultimately generating jobs and wealth for their communities instead of leaving them behind," he concluded.