Fintech startup Tensec Holdings Ltd. wants to transform the way financial services are delivered to small and medium-sized businesses after closing on $12 million in seed funding and building what it says is a frictionless, real-time cross-border payments service.

Today’s round was led by Costanoa Ventures and saw participation from Quiet Capital, WillowTree Investments, Cambrian VC, Ignia Partners, Montage Ventures, Renegade Partners and Endeavor Scale Up Ventures.

The startup is targeting global trading companies, trade compliance consultants, investment firms and foreign exchange brokers, giving them a way to enable seamless cross-border transactions and provide banking services to their clients, which are primarily SMBs. To do this, it has created a global financial infrastructure platform that allows them to quickly integrate international payments, FX services, treasury, loans and other services, which were previously only available through traditional banks at high costs.

According to Tensec co-founder and Chief Executive Helcio Nobre, SMBs facilitate almost half of all global trade, yet they find it very difficult to access the kinds of financial services that larger enterprises can leverage to grow their businesses. “We’re flipping the model by empowering global trade companies to deliver these services directly to their partners, making global commerce faster, cheaper and more accessible,” he said.

Most cross-border payments continue to go through traditional banks, which rely on the 40-year-old Society for Worldwide Interbank Financial Telecommunications or SWIFT network that facilitates transactions between them via its global network. The SWIFT network is notoriously inefficient, with transactions typically taking days to process and coming with very high costs.

Tensec points out that while there has been significant innovation in terms of consumer and enterprise payments, SMBs still have to rely on decades-old bank wire transfers, even though they account for something like 40% of the $25 trillion annual trade in physical goods.

The startup believes that these SMBs’ global trade partners are in the best position to alter this state of affairs, which is why it consolidates global payments, hedging and trade finance services into a single platform with no integration work. It makes it simple for them to offer a range of services to their clients that were previously only available through banks. The actual payments and banking services are provided by local banks that work with Tensec – in the case of U.S. partners, it’s working with Stearns Financial Services Inc.

With Tensec’s platform, trading companies can onboard their SMB clients in minutes, using intelligent Know Your Business and Know Your Customer verification tools, giving them access to a more efficient payments infrastructure that facilitates transactions in minutes rather than days, and at lower costs. It supports transactions in more than 150 countries and over 70 global currencies. In addition, they’ll also be able to offer FX hedging services to capitalize on fluctuating exchange rates, as well as treasury tools for creating customizable pricing models and recurring revenue streams.

Tensec’s platform can be integrated with client’s platforms in just a few minutes, and features built-in risk assessment and artificial intelligence-powered compliance checks.

“Our services let the companies already engaged in global trade offer their own financial services innovations,” Helcio explained. “It fills a real need, and helps their clients to thrive.”

Costanoa Ventures Partner Amy Cheetham said she was attracted to Tensec because it helps global trade companies to better serve their customers. “It’s a win-win, bringing new revenue for trading companies and modern financial tools to SMBs who have been underserved for decades,” she said.

Image: Tensec