Crypto Bank Let’sBit Closes Pre-Seed Round Led by Angel Ventures

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According to a report by Galaxy Digital Research, $33 billion in venture capital invested globally in 2021 went to crypto, blockchain, and decentralized finance (DeFi) startups.

This figure suggests that we are likely to see even more investment in these sectors in Latin America. After all, Web3 and DeFi are two of the most attractive sectors for venture capitalists in 2022.

As we begin to get used to this new investment destination, Argentinian crypto Let’sBit has some news: it has just raised a pre-seed round led by Angel Ventures for an undisclosed amount. Other investors such as Primary Ventures of Grupo MATBA-ROFEX, the main derivatives market in Argentina, also participated.

According to the press release, the new capital will be used by Let’sBit to leverage its growth in the Peruvian market. The company will seek to have a greater market share in Peru in the same way as it did in Argentina and Colombia.

Crypto, what?

A crypto bank like Let’sBit does not use traditional banking infrastructure to offer banking services such as payments, transfers, credits and investments. For example, it does not use physical branches, proprietary technology, or linkage to international transfer systems such as SWIFT. Instead, it uses encryption infrastructure built on blockchain protocols.

Santos Barrios, co-founder and chief financial officer of Let’sBit, said context that his company seeks to be a bridge between the two infrastructures. “We are the link with the traditional financial world. Our technology allows bank accounts that users already have in traditional banks to be used to move their money into crypto and benefit from bringing it under DeFi protocols.

According to Barrios, DeFi companies like Let’sBit solve some of the limitations of the traditional banking system. For example, interest rates are determined by regulatory issues; credits lower than established cannot be granted; transfer processes are complicated and therefore slow.

While fintech companies seek to simplify these processes by creating products like a map and an app with a good UX/UI experience, they are essentially the same products.

“Crypto plays with completely different rules and allows for more innovative products that are more tailored to each user,” explains the CFO. The reason? Protocols are more accessible to those who want to use them.

An example: if a user wants to use Compound, a protocol that allows lending and borrowing in crypto, he only has to integrate into the Compound blockchain via his wallet. “It’s not like in the bank, where I have to interact with a very complicated and limited user experience.”

This way, instead of putting your fiat money into a fixed-term investment that earns very little interest, Let’sBit allows you to turn your money into cryptocurrencies and place it under DeFi investment protocols, which provide higher yields.

The existence of more companies like Let’sBit also shows that not all crypto-related companies are necessarily cryptocurrency exchanges.

“We don’t see ourselves as an exchange like Bitso or Coinbase, but as an alternative to a bank,” Barrios explains. “What we are looking for, for example, is that people want to save in a stablecoin savings account. We offer the purchase of cryptocurrencies, but we emphasize that what is best for the user is to save in stablecoins because he makes better use of his money.

In countries like Argentina, where the volatile price of the local currency directly affects savings and investments, the alternative of saving in stablecoins is certainly attractive.

Speed, even growing

Let’sBit started in 2018. It was fully funded by Barrios and his three other co-founders: Joaquín Gómez (COO), Agustín Abraham (CPO) and Camilo Cristia (CEO). They started to evolve very recently and now have 50,000 users, mainly in Argentina. The goal is to eventually reach the Mexican market.

Over the past two years, Let’sBit has grown more than 50 times in size. This happened organically, based on customer revenue. Among its product offerings is also Pay On Rails, the company’s B2B payment and cryptocurrency processing API.

The company’s team is made up of just over 50 people. By the end of 2022, it aims to triple their number of customers. This would put Let’sBit on the path to direct competition with traditional banks in terms of market share and number of users.

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