Investment Notes: Stables (formerly Tiiik)

Today, we’re pleased to share the news of our latest seed investment in Tiiik, a visionary Aussie fintech on a mission to simplify access to a better financial system. The team, led by co-founders Erez Rachamim, Bernardo Bilotta, Daniel Li, Tony Tao, David Nichols & Peter Duan combines expertise in digital assets and traditional fund management to bring a regulated approach to decentralised finance, or DeFi.

This USD$3.76M round was led by Global Founders Capital, Jump Capital and Fintech Collective. Also participating—alongside Investible—is a connected, strategic collective of investors including a number of sector-focused VCs, plus founders and operators behind leading products like Zip Co, SupraOracles and Pocketbook. This funding will help the company accelerate its go-to-market efforts for its wholesale digital wallet.

Many wholesale investors have been sitting on the sidelines of the digital asset boom, hesitant to gain exposure due to a myriad of reasons including how to securely trade and hold the assets and how to mitigate downside risk. Many firms have institutional mandates preventing investments in unregulated products. These concerns have seemingly been nullified by Tiiik, who are paving the way for wholesale investors to access digital assets in Australia.

Leading with a wholesale high-yield deposit product, Tiiik has a vision to provide a holistic suite of wholesale, retail, and business DeFi products globally. The company aims to bridge the gap between the traditional fiat and cryptocurrency ecosystems by streamlining the process required to gain access to digital assets.

Here are three leading factors behind our investment in Tiiik.

Standing out in a white hot sector

To call the blockchain ecosystem a white-hot space at present is an understatement.

The sheer amount of both human and financial capital, being applied to decentralised projects is unfathomable. DeFi Pulse estimates the total value locked in DeFi projects to be ~USD$90B, which is up from ~USD$10B two years prior. Investible has been tracking the greater blockchain ecosystem closely, having reviewed a number of companies in the past year. We were yet to deploy capital into this space until Tiiik came onto our radar. It became clear the company was ‘Tiiiking’ a lot of the boxes we had established for the Web3 space – an experienced founding team, mitigation of regulatory risk as a licensed provider and being arm’s length to cryptocurrency volatility through the selection of a principal-protected stablecoin protocol. (The initial savings protocol used by Tiiik is the Anchor Protocol on the Terra blockchain.)

The ducks are in a row

The Tiiik team has successfully managed all structuring, operational, and back-office particulars required to bring this financial offering to market. Possibly the greatest single hurdle to launching a DeFi wholesale deposit product in Australia has been achieved, with the company obtaining a license to operate as a wholesale digital assets fund – one of only a handful of licensed providers in Australia.

On the human capital side, the founding team has grown to include individuals with experience across a variety of functional domains to ensure all required knowledge and particulars are resourced and internalised. With their ‘ducks in a row’, the company is well positioned to accelerate the go-to-market for the wholesale digital wallet, invest in product and launch.

The nascent state of regulation of cryptocurrencies and digital assets in Australia provides an opportunity for Tiiik to be a thought leader as the findings of the Select Committee on Australia as a Technology and Financial Centre as adopted. This will ensure Tiiik remains compliant and relevant as the regulatory environment matures.

A novel, distinct offering

Tiiik provides a novel offering in the Australian wholesale market, by providing users with a “low touch” approach to investing  in digital assets. The product is wholesale user centric with depositors only transacting in fiat through a single and secure digital wallet, that leverages institutional grade infrastructure.

The initial flagship product seeks to capitalise on the current low interest rate environment by providing wholesale investors a compelling high yield deposit proposition when compared to traditional deposit products. The strong pre-launch traction speaks to the Company’s unique value proportion, with $25m+ FUM pledged from wholesale users, a 8k+ organic waitlist and acceptance into CoinList’s Seed Fall 2021 Batch.

This opportunity is aligned to the vision of the founding team, what has been accomplished to-date and the global tailwinds behind decentralised finance. Australia is the sandbox where Tiiik will launch with wholesale investors, before expanding to key international markets. The successful execution of the wholesale strategy should demonstrate the track record to launch the retail product. We look forward to working closely with the Tiiik team as they seek to create a world class solution that gives inclusive access to a more equitable financial system.