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Blockchain startup processes $1 billion in trade finance

trade container shipping

Yesterday Singapore based dltledgers announced that in the last 18 months it has processed more than $1 billion in trade finance on its blockchain trade platform. The company wants to “uberize” the trade finance model. It also recently secured a $2.5 million pre-Series A financing from Walden International.

One of the first high profile announcement came eight months ago. Singapore’s DBS Bank said it was funding shipments for agribusiness company Agrocorp ($3 billion revenues) on the platform. In turn, Agrocorp was onboarding 4,500 Australian farmers onto the platform so supermarkets and restaurants could trace their products.

Standard Chartered also publicized that it had financed an Agrocorp shipment of chickpeas delivered from Australia to BSM Global in Bangladesh.

The platform combines both supply chain traceability and the trade finance aspect. Dltledgers says it now has more than 30 banks and over 340 international trade house customers globally.

Agrocorp alone has already processed 50 transactions worth $100 million on the platform. The agribusiness company was initially attracted to the traceability aspect. But it estimates that the blockchain platform has reduced its financing costs by 15-20%. Additionally, the streamlined processes have freed up staff time.

EuroFinance quoted Nitin Jan, Agrocorp’s Head of Treasury as saying “we’ve had even more interest in what we’re doing with blockchain from our bankers than from our customers”.

Given the transactions are private, Ledger Insights queried how the company knew the figures. They gathered the information from banks and hence they also know there have been over 1,000 transactions so far.

Trade finance

We also asked which other banks are involved, but the company needs clearance to reveal names. Samir Neji, dltledgers founder and CEO, told Ledger Insights: “Banks are open to working with us as we give them more business.”

So far it’s all open account finance of both accounts payable and receivables. Agrocorp noted that only 10% of its business was in container shipping (but 50% of transactions), and it was only these that could currently go through the platform. The balance is bulk shipping.

“We are still working on how to do this with the bulk shipments, particularly with any transactions that involve Letter of Credit confirmations and discounting,” said Agrocorp’s Jan. “For those large ticket size transactions, banks and customers still need the comfort of physical documents”.

Business models and technology

Dltledgers has two models. The one is a SaaS monthly subscription which applies to 80% of customers. For the balance who want a more pay-as-you-go experience, they pay a setup fee and $75 per transaction.

The technology is based on Hyperledger Fabric. Dltledgers is a big fan, and CEO Neji commented that it’s scaling well. So far it’s running more than 65 nodes across Azure, Google Cloud and SAP Cloud.

It’s integrated with ERP systems including SAP ERP, SAP HANA and Microsoft Dynamics. But it also works with trade systems such as Bolero and essDOCS.

The company started with the agribusiness sector. But now it supports minerals, metals, petroleum, coal and merchandising products.

Kris Leong, VP of Walden International Singapore, summed it up: “We are impressed with dltledgers’ execution. In less than 18 months, its blockchain platform has facilitated more than US$1 billion of trade executed across 30+ banks and a network which is growing on a global scale.”