Rising interest in blockchain-based digital finance has seen AUDD close its pre-seed funding round at $600k as investors sought to increase their early stage-investment in the business. In the two years since its inception, the AUDD multichain stablecoin has rapidly gained traction in the market, exceeding more than $25 million in payments volume, within just the last quarter.
The increased investment, up from $300k last month, is a nice win for payments company Novatti Group (ASX: NOV) which retains an 80% stake while the pre-seed funding round enables AUDD to become self-funding and accelerate its growth.
Raised from seasoned fintech investors and the AUDD management team, the funding round was completed at a pre-money valuation of $2.4 million. This coincides with AUDD already generating revenue from offboarding fees, as well as interest on Assets Under Management. Currently there is $2.5 million of AUDD in active circulation,1-for-1 backed by Australian Dollars.
Mark Healy, CEO of Novatti, emphasised the strategic importance of AUDD’s financial independence, stating, “AUDD’s holding company is now self-funding, removing the operational cost from Novatti as we continue to simplify the business and pursue positive cash flow.
“With Novatti retaining an 80% interest in AUDD, we will continue to benefit from any upside growth.”
The bigger picture for AUDD is its functionality as a stablecoin that can facilitate efficient transactions within the financial system, including, but not limited to, the international movement of money without the need to transact via traditional SWIFT payment rails, but with the security and transparency of blockchain technology.
AUDD can play a valuable role for payments companies like Novatti which operates an international ecosystem with clients all over the world. Compared to traditional international transfers, stablecoin transactions can settle in minutes, offering a faster alternative and showing why institutions have a growing interest in stablecoins.
Some central banks and governments are also exploring central bank digital currencies (CBDCs), including Australia where Novatti was selected for participation in the pilot program.
Highlighting the market for stablecoins, the world’s largest stablecoin Tether has more than $140 billion in active circulation, followed by USDC with more than $37 billion in circulation.
Although AUDD is still in its infancy, its backing by a trusted payments provider of Novatti’s reputation has accelerated its growth to date and is expected to open further commercial opportunities for AUDD.
A multi-chain stablecoin, AUDD recently launched on Solana as the fourth native blockchain integration while already being live on Ethereum, Ripple (XRP Ledger), and Stellar.
Without any further funding support from Novatti, the funding round ties in with Novatti’s strategy to achieve positive operating cash flow by mid-2024.
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