Highlights:
- Huma Finance raised $38 million to expand its PayFi platform to Solana and Stellar’s Soroban network.
- The funding comprises $10 million in equity and $28 million in yield-generating real-world assets.
- Huma Finance’s recent merger with Arf aims to enhance the tokenization of real-world assets, with $10B in transactions expected next year.
Huma Finance, a tokenized real-world assets (RWA) platform, has raised $38 million in funding to expand its payment financing network. The investment round includes $10 million in equity and $28 million in yield-bearing RWAs, signaling a significant boost for the San Francisco-based company’s growth plans.
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Announcing $38M in funding to hyper-scale our PayFi Network! This round fuels our mission to transform global payment financing.
Read more: https://t.co/4veDkOaRz8 pic.twitter.com/plCVeZFORJ— Huma Finance 🟣 (@humafinance) September 11, 2024
Strategic Investment and Expansion Plans
Venture capital firm Distributed Global spearheaded the equity portion of the funding, with significant contributions from Hashkey Capital, Folius Ventures, the Stellar Development Foundation, and TIBAS Ventures, the venture arm of Turkey’s largest private bank, İşbank. Meanwhile, the Stellar Development Foundation took the lead in the RWA portion, contributing $10 million.
The investment in tokenized RWAs consisted of multitranche bonds with varying maturities. In addition, it is wrapped into exchange-traded products issued by Switzerland-based Arf Capital under Swiss Distributed Ledger Technology (DLT) laws. According to Huma co-founder Erbil Karaman, this structure ensures regulatory compliance and enhances the platform’s credibility.
Huma Finance plans to use the new funds to expand its platform to other blockchain ecosystems, such as Solana and Stellar’s Soroban smart contract network. This expansion will drive Huma’s growth and position the company as a leader in the rapidly evolving RWA tokenization space.
Growing Adoption of Tokenized RWAs
Tokenized real-world assets are emerging as one of the fastest-growing applications of blockchain technology. Financial institutions and digital asset firms worldwide are racing to bring traditional instruments such as bonds, credit, and investment funds onto distributed ledgers. This shift promises faster settlements, improved transparency, and greater operational efficiency.
Huma’s PayFi platform uses blockchain technology to address the liquidity needs of trade finance. The company claims its platform offers a more efficient and accessible service than traditional banking methods. Consequently, it aims to disrupt a market long plagued by inefficiencies and limited access.
Earlier this year, Huma Finance merged with cross-border payments firm Arf to enhance its focus on RWA tokenization. Despite the merger, both companies continue to operate independently under a shared holding entity. Together, they offer a comprehensive platform for tokenized assets, with projections to process $10 billion in payments-financing transactions next year.
A Paradigm Shift in Payment Financing
The PayFi platform is designed to bring essential liquidity and interoperability to the payment financing industry. According to Chao Deng, CEO of Hashkey Capital, one of the key investors in Huma, the platform represents a paradigm shift in the industry.
Deng stated:
“Huma’s PayFi network marks a significant advancement in payment financing, addressing inefficiencies and expanding access to liquidity.”
Huma Finance’s recent investment round marks a critical step towards establishing a robust, blockchain-powered ecosystem for improved trade finance solutions. With expansion plans for Solana and Soroban, the company is well-positioned to lead in this burgeoning space.
By focusing on the tokenization of RWAs, Huma Finance aims to create new financial markets around the time value of money. This innovative approach to on-chain finance could enable new financial primitives, product experiences, and broader financial access that are impossible in traditional or even Web2 finance.
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