Exclusive: Tare raises $13 million from Blockchain Capital to manage private credit transactions on the blockchain

Today’s private credit market is fragmented.

Nonbank lenders often depend on several providers to make and manage loans, keep records, distribute payments, and ensure transactions are accurate.

Because those providers all rely on different internal systems, the process can be slow and costly.

That’s why a Brooklyn-based fintech company called Tare is pledging to simplify the process by using blockchain technology to bring those functions onto a single platform.

Cofounded by credit and crypto veterans Kevin Miao, Keerthi Moudgal, and Lucas Vogelsang, Tare announced Wednesday that it had raised a $13.25 million seed round, which closed in March.

The company plans to use the funding to build software on the Avalanche blockchain that creates digital records of loans, while automating the administrative work involved in managing them.

Blockchain Capital led the round, joined by Janus Henderson, Strobe Ventures, the Venture Dept, Neoclassic Capital, and the Avalanche Foundation.

Individual backers included Aave CEO Stani Kulechov, Tether cofounder Phil Potter, and Privy CEO Henri Stern.

Tare declined to disclose its valuation following the seed round.

In an interview with Fortune , Tare CEO Kevin Miao argued that the difference between what borrowers pay and what investors ultimately earn is often absorbed by the intermediaries that sit between them.

Using mortgages as an example, he noted that middlemen costs inflate the interest rates borrowers pay while lowering the yields investors receive.

Blockchain-based systems can automate that operational work and eliminate extra costs.

“We deserve to have a system that works for us [and] doesn’t extract from both sides, and we need to build a platform or a marketplace that connects the two sides with no friction,” Miao said.

“If we do this, everyone is going to benefit.” Modernizing credit systems Certain companies have already made headway in using blockchain to make credit markets more efficient.