Real-time payments are becoming commonplace for individuals and businesses, but not yet for cross-border transactions. That’s what Caliza is hoping to change, starting with Latin America.
Founded in 2021 by American entrepreneur Ezra Kebrab, who now lives in São Paulo, Brazil, Caliza offers an alternative to transfers made via SWIFT, which are the norm in the Americas but can take days to settle.
Instead, Caliza provides an API and front-end payment system that use crypto stablecoins — specifically, Circle’s reserve-backed USDC — and existing real-time payment networks to allow for instant transfers and provide international merchants with U.S. digital dollar accounts.
The startup declined to name its clients, but said they are either banks or fintechs keen to better support businesses transacting internationally, as well as individuals for functions like remittances and payroll.
The firm just raised an $8.5 million round of funding led by Initialized.
Kebrab doesn’t come from a crypto background himself: His previous role was at Visa, which is where he saw how businesses needed faster transactions, especially in Latin America. He gave the example of a company doing nearshoring in Mexico: If production doesn’t start until the upfront payment clears, each day of delays costs money.
Mentioning Mexico was no accident, as Caliza plans to expand there in the fall. That’s a few months later than planned. Kebrab didn’t say why, but mentioned the company’s focus on meeting regulatory and compliance standards, which also involves getting licenses.
For now, most of Caliza’s team of 10 people is based in Brazil, where it plans to double its workforce thanks to its new round of funding. The startup is also following through with its previously announced local launch.
Brazil is no newcomer to real-time transactions. Its digital payments scheme, Pix, which is similar to India’s UPI, has become so ubiquitous that even coconut vendors accept it, Kebrab said.
All that fintech investment had a real impact on banking penetration in Latin America
But cross-border transactions are a different beast. Europe solved most of that problem with the Single Euro Payments Area (SEPA), but the Americas are far less integrated, making it less likely for Caliza to get disrupted by a similarly better alternative to SWIFT.
Caliza itself is looking to help incumbents, rather than disrupting them. “You will always have banks that will be intermediaries regulated by governments,” Kebrab said. But he thinks his company is also here to stay, hence its name; in Spanish, “caliza” means limestone, a reference to the material many long-lasting buildings are made of.
Currency volatility has been a cause of concern in Latin America. The Brazilian real has weakened around 13% against U.S. currency this year, and 6% in June alone.
This kind of volatility ties well with Caliza’s stated mission to “empower everyone, regardless of their location or circumstances, to access instant and stable liquidity.” The bit about location also suggests Latin America is just the start. Since Kebrab is the son of Ethiopian and Eritrean immigrants, Africa could be a logical next target.
The firm had previously raised $5.3 million in 2021. The new round is led by Initialized, with participation from Abstract Ventures, Class 5 Global, Digital Currency Group, Kraynos Capital, New Form Capital and Quona, as well as fintech executives as angel investors.
Correction: An earlier version of this story said that Caliza was Initialized’s first LatAm-focused investment. Caliza is headquartered in the United States, and Initialized has invested in other companies that do business in Latin America, according to a spokesperson.
