Fintech
Caliza Raises $8.5M to Bring Real-Time Money Transfers to Latin America Using USDC
Real-time payments are becoming commonplace for individuals and businesses, but not yet for cross-border transactions. Here’s what Caliza hopes for change, starting from Latin America.
Founded in 2021 by American entrepreneur Ezra Kebrab, who now lives in São Paulo, Brazil, Caliza offers an alternative to SWIFT transfers, which are the norm in the Americas but can take days to complete.
Instead, Caliza provides an API and a front-end payment system that uses cryptography stablecoins — specifically, Circle’s reserve-backed USDC — and existing real-time payment networks to enable instant transfers and provide international merchants with U.S. digital dollar accounts.
The startup declined to name its customers, but said they are banks or fintechs interested in better supporting businesses transacting internationally, as well as individuals for functions such as remittances and payroll.
The company just raised an $8.5 million funding round led by Initialized.
Kebrab doesn’t have a background in crypto: His previous role was at Visa, where he saw how companies needed faster transactions, especially in Latin America. He gave the example of a company that nearshored to Mexico: if production doesn’t start before the advance payment is completed, every day of delay costs money.
Mentioning Mexico was no accident, as Caliza plans to expand there in the fall. A few months later than planned. Kebrab didn’t say why, but he did mention the company’s focus on regulatory and compliance standards, which includes obtaining licenses.
For now, the majority of Caliza’s 10-person team is based in Brazil, where it plans to double its workforce with its new funding round. The startup is also following up on its Previously announced local launch.
Brazil is no newcomer to real-time transactions. Its digital payments scheme, Pix, which is similar to India’s UPI, has become so omnipresent that even coconut sellers accept it, Kebrab said.
But cross-border transactions are a different beast. Europe has solved much of that problem with the Single Euro Payments Area (SEPA), but the Americas are much less integrated, making it less likely that Caliza will be replaced by an equally better alternative to SWIFT.
Caliza itself is trying to help incumbents, rather than disrupt them. “There will always be banks that are government-regulated intermediaries,” Kebrab said. But he thinks his company is also here to stay, hence its name; in Spanish, “caliza” means limestone, a reference to the material many long-lasting buildings are made of.
Currency volatility has been a cause for concern in Latin America. The Brazilian real has weakened by about 13% against the U.S. currency this year and 6% in June alone.
This kind of volatility fits well with Caliza’s stated mission to “empower everyone, regardless of location or circumstance, to access instant and stable liquidity.” The location part also suggests that Latin America is just the beginning. Since Kebrab is the son of Ethiopian and Eritrean immigrants, Africa might be a logical next target.
The company had previously raised $5.3 million in 2021. The new round is led by Initialized, with participation from Abstract Ventures, Class 5 Global, Digital Currency Group, Kraynos Capital, New Form Capital, and Quona, as well as fintech executives as angel investors.
Correction: An earlier version of this story said Caliza was Initialized’s first investment focused on Latin America. Caliza is based in the U.S., and Initialized has invested in other companies operating in Latin America, according to a spokesperson.