Financial infrastructure provider Zynk Labs Pte. Ltd. today announced it has raised $5 million in a seed round to build on its mission to eliminate prefunding and liquidity issues for payment companies worldwide.
The investment round was led by Hivemind Capital, with participation from Alliance DAO, Coinbase Ventures, Transpose Platform VC, Polymorphic, Tykhe Ventures and Contribution Capital.
Zynk delivers instant settlement capabilities that allow companies to send funds cross-border without needing to maintain prefunded accounts or manage complex operations.
In finance, it’s often needed to prefund accounts three to four days before payments resolve. This process is required to provide speed and reliability because many cross-border payment processes cannot settle instantly. By having a prefunded account with the necessary money, companies can manage risks of delays or failures.
“We’ve been building the financial pipes that make global payments instant,” said co-founder and Chief Executive Prashanth Swaminathan. “Access to prefunding has become a moat in cross-border payments — and we’re breaking that moat.”
Swaminathan said the objective of the company is to make payments “as mobile as data” and free up business capital by eliminating idle balances and prefunding requirements.
Zynk’s service works across a hybrid financial structure by supporting both traditional currency and stablecoins. The company’s infrastructure currently supports USD, EUR, AED, INR, MXN and PHP.
Stablecoins are cryptocurrencies designed to maintain a stable value, often pegged to assets like USD. Unlike bitcoin, which can be volatile, stablecoins aim for price stability, with tokens typically valued at $1 if matched to the dollar.
Stablecoins are being increasingly adopted by major corporations and financial institutions both in the United States and around the world. In the U.S., this is tied to a major shift in government sentiment in favor of the digital currency. Companies such as Apple Inc., Amazon.com Inc., X Corp., Google LLC and others have all reportedly begun exploring stablecoins on their platforms. Payment companies such as PayPal Inc. and Stripe Inc. have already integrated the cryptocurrency into their processes.
Zynk said that since its launch in April, it has experienced 70% month-over-month growth, which the company touted as evidence that real-time settlement is in demand. The company added that its infrastructure allows partners to enter into new markets virtually overnight by allowing them to eschew maintaining local accounts.
“Cross-border payments are a tenet of global commerce and finance, yet they remain dragged down by antiquated technologies and a swath of immobilized capital,” said Emmanuel Vallod, partner and head of ventures at Hivemind Capital.
The company said it will use the new funding to expand the coverage of cross-border payment capabilities, strengthen its liquidity and compliance stack, and build partnerships with payment providers across the globe.
Image: Pixabay
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