As crypto and DeFi products become more mainstream, a Canadian startup is looking to make it easier for FinTech startups and challenger banks to offer these services to consumers.
Calling itself a “crypto banking-as-a-service provider,” Cybrid Technology has secured $3.8 million CAD ($3.1 million USD) in equity seed financing to bring its technology to market.
The round was led by Golden Ventures, with participation from FinTech-focused investors Luge Capital and Harvest Venture Partners.
Founded in 2021, Cybrid is the creation of CEO Avinash Chidambaram and CTO Brent Carrara. The pair come from their previous startup Ario, which was acquired by FinTech company Driven (formerly Thinking Capital). Chidambaram brings to the table years of experience in finance, identity and engineering at companies like Interac and Nortel, and also worked on BlackBerry Payments and ID.
Chidambaram and Carrara are taking a similar approach to Cybrid as was taken at Ario, which used APIs to provide companies with white-labelled financial solutions like lending and payments. The idea behind Cybrid is to make it easy for challenger banks, financial institutions, and payment providers to integrate crypto and DeFi capabilities into their existing products.
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Cybrid claims to take on the often-difficult infrastructure and compliance concerns that come with building crypto and DeFi products. Almost like a two-sided marketplace, Cybrid has struck partnerships with liquidity providers, exchanges, and custodians, through which it has created APIs that FinTech companies can use to easily offer products like a crypto exchange, for example.
Decentralized finance (DeFi) products have become increasingly mainstream in the lending, exchange, or asset management space. Crypto, specifically, has seen more exchange platforms being approved by regulators, and the likes of popular Wealthsimple moving into the space.
After speaking with FinTechs and challenger banks in Canada and the United States Chidambaram found that virtually every one of them has a strategy around crypto. His goal, he said, is to make Cybrid the solution that powers that.
In Canada specifically, players like Wealthsimple and Mogo have pushed into crypto. Upstart Neo Financial, which recently launched an investment platform, has also been exploring crypto.
Cybrid is connected to Neo through Harvest Builders, which has backed both companies and is known to create synergies between its portfolio companies (case in point: portfolio company OneVest partnered with Neo to launch its investment product).
While Cybrid’s product has yet to hit the market, Chidambaram told BetaKit that his company is starting to work with customers and has been talking with FinTechs and challenger banks in Canada. The CEO noted that Canada presents a strong opportunity to build DeFi solutions, given how regulators are working to embrace and understand the tech.
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However, as Cybrid starts to bring its product to market it has seen more interest from south of the border. Chidambaram attributed that to a larger market, and possibly more demand from consumers to have alternative finance options.
Cybrid is not the only Canadian company to try to build on this trend. Also founded in 2021, Diagram Ventures company Conduit offers DeFi integrations for FinTech startups, neobanks, exchanges, and traditional financial institutions. Conduit CEO Kirill Gertman likened the approach to Stripe for DeFi.
Karim Gillani, co-founder and general partner at Luge Capital, called what Cyrbid is doing “the connection between traditional financial products and the future of finance.” Golden Venture’s Ameet Shah added, “Cybrid is building the future of financial services that will one day seem obvious in hindsight.”
Having spent the first year of its existence building its product, Cybrid still has a long way to go if it hopes to power the crypto and DeFi products of the world’s FinTech companies.
Chidambaram is confident, though, that he and his team have the experience in finance and building infrastructure that it will take to win in this emerging market.