Business
Startup Hercle raises $10 million build out stablecoin-based global money transfers
Gabriele Sabbatini notes that, even in an age of instant communication, moving money around the globe is often slow and expensive. That’s why he started Hercle, a firm that uses stablecoin technology to make global transactions more efficient.
On Wednesday, Hercle announced it has raised $10 million in an equity round led by F-Prime, a global venture capital firm. It also raised a $50 million credit facility to support global expansion. Sabbatini declined to disclose Hercle’s valuation.
The name Hercle is a variation of Hercules, the hero in Greek mythology who had to complete twelve labors. In a sense, Sabbatini says, his company is taking many challenges head-on, just like Hercules.
“We work with global businesses and payment service providers to move money instantly,” Sabbatini said in an interview with Fortune. “We provide the end-to-end, institutional grade infrastructure to do that.”
Hercle’s fundraise comes at a time when stablecoin technology, or a type of cryptocurrency pegged to the U.S. dollar, is the hottest new thing in blockchain. This summer, Congress passed legislation which created the regulatory framework for stablecoins. The bill opened the door for Big Tech companies and major financial institutions to expand their blockchain offerings. Other startups are also jumping at the opportunity to use stablecoins to move money internationally more easily.
Sabbatini, who serves as CEO, is one of three co-founders of the company, along with the CFO Arturo Schembri and the CTO Marco Levarato. The company has 30 employees and is generating revenue by charging fees for its services, although Sabbatini declined to say how much the company is bringing in.
Targeting payments and trade finance
Sabbatini describes what Hercle does as twofold. First, it works with payment service providers, some of whom send remittances, or international payments. Hercle works with these so-called PSP’s to integrate stablecoins into their infrastructure from the beginning to the end of the transaction. With its infrastructure, Hercle intends to make these money transfers instant and make them cheaper. These money transfers would typically be from one regular person to another.
Hercle’s second function involves using stablecoins to help businesses in different countries pay each other. Take the example of a Swiss company buying cacao from Brazil. Switzerland and Brazil both have an instant settlement method for domestic payments. But international payments between businesses, which can involve hundreds of thousands of dollars (or more), can be costly. Hercle aims to add integration between countries’ networks using stablecoins, which would move the money instantly using blockchain technology.
“Settlement should be measured in minutes, not days,” Sabbatini said in a press release on Wednesday. “When you can compress a three-day settlement to just a few minutes, it fundamentally changes the economics of global finance.”
The company says that since its launch, it has processed over $20 billion in transactions. It says that 90% of transactions are completed in under five minutes, and that the company has more than 200 institutional customers worldwide.
Hercle says it will use the funding to continue to expand across South America, the Middle East, and Africa and also to broaden its global regulatory footprint.
