Notabene raises seed round to bring confidence to crypto transactions
We are thrilled to announce a significant milestone for Notabene — we have raised $1.765 million in venture capital led by Castle Island Ventures, joined by Green Visor Capital, Lynett Capital, Dialectic, Pardon Makumbe, and more.
This seed round brings our total funding to date to $2.3 million with some of our early supporters including Y Combinator, Signature Ventures, Joachim Sonne, and others.
We are also excited to welcome Matt Walsh of Castle Island Ventures to the Notabene Board of Directors. Matt explains why they invested in us:
Regulatory compliance has been a barrier to entry to public blockchain assets for most financial services firms. The Notabene team has built a best in class solution that is the safest and most convenient way to immediately address these compliance requirements.
Lou Forster from Green Visor Capital adds:
Green Visor believes that compliance in the entire cryptocurrency ecosystem will be a growth area. As cryptocurrency and blockchain solutions are developed for more and more use cases, regulatory authorities will focus keenly on the sector and will demand guardrails, disclosure and oversight. Notabene is well-positioned to develop tools to address the regulatory concerns whilst influencing the regulatory process itself.
We are incredibly excited to work with these great investors and have already benefited from the great insight and experience they bring.
The promise of regulatory clarity is opening crypto to the world
This year, we have seen a remarkable resurgence of interest in virtual assets by central bankers, regulators, and institutional investors. Despite that interest, adoption is still only just starting to happen more broadly. Traditional-finance actors have most often noted a lack of regulatory clarity and trust in transactions preventing broader and faster adoption.
The global Anti-Money Laundering watchdog, FATF, recently started to change this by introducing the first global regulatory framework for crypto assets. It consists of extending existing rules for financial service firms to the crypto industry. Major economies are currently implementing these rules locally by introducing new licensing regimes for crypto businesses.
One of the most challenging requirements is the “Travel Rule”, which requires businesses to exchange customer information when performing transfers between an originator and beneficiary customer.
The Travel Rule is not new and has been a foundation of most traditional payment systems such as SWIFT since the 90s. Implementing it will not only allow crypto businesses to receive operating licenses but will also open up banking relations with traditional financial service firms. This can have a serious positive business impact.
Complying with these new rules is quickly becoming a major competitive advantage. One of our clients, Wirex, is the first crypto native platform to have received MasterCard principal member status. Wirex CEO Pavel Matveev says:
One of Wirex's key value propositions to customers is remaining secure and compliant with any regulatory changes, including the Travel Rule. The simple fact is that Travel Rule compliance will be a must for companies like Wirex going forward. In Singapore, it's already a requirement and we are working with local providers to integrate Travel Rule compliance there. Likewise in the US, Wirex is regulated as a Money Service Business with Fincen, and we are exploring solutions to ensure compliance with Fincen rules. Regulatory compliance is a top priority for us, as ultimately it ensures we can continue to provide quality services to our customers.
How we are helping crypto businesses today
We started Notabene with a mission to give people and businesses more confidence in crypto transactions. Our CEO, Pelle Braendgaard, explores our mission and product vision in this blog post.
We take a holistic view of managing the regulatory risk of crypto transactions. Our current offering consists of a unified API and dashboard helping compliance officers within crypto businesses to manage risk for both Travel Rule and non-custodial transactions. We provide our customers with access to the widest reach of crypto businesses for them to interact with. Notabene does more than simplify compliance for them. We also bring more confidence to transactions on their platforms - ultimately helping them grow the number of their transactions and, thus, revenue.
We believe in the importance of data privacy and are deeply committed to it, just like our customers. Our founding team has worked together before at uPort (ConsenSys) to build the framework for privacy-preserving, user-centric identity. We started Notabene bringing this prior knowledge and expertise to help the crypto industry solve these new regulatory burdens the right way - without compromising privacy. We have built our core architecture around privacy-preserving identity data, and customer data is always segregated and encrypted.
Since we launched our product in August, over a dozen companies have started using Notabene for Travel Rule compliance. We have had deep dives with compliance teams at over 100 crypto businesses. This strong focus on their needs is quickly making us the default choice for exchanges looking to implement the Travel Rule. By the end of 2021, we expect a significant portion of exchange-to-exchange transactions to be managed through Notabene.
What is next for Notabene
The crypto industry is rapidly evolving, and innovation must be allowed to continue as it already has. However, we need to channel this innovation into safe products that can be used by everyone.
With our current momentum and this new funding, we’re excited to continue simplifying compliance for the crypto industry. The new investment will help us grow our traction among crypto businesses and extend our market to meet the needs of traditional financial institutions. We will also introduce an offering for service providers operating with Defi and layer 2 technologies, as they develop increasingly acute risk management needs.
As we continue to build out our platform, we will be growing our team.
Thank you to our investors, customers and partners for joining us on this journey. It is only the beginning!