Spring Labs, the company behind the Spring Network — a blockchain-based network being designed to allow lenders, banks, and data providers to securely and efficiently exchange data with one another -announced that the company has raised $14.75 million in Seed funding. The round is led by August Capital with participation from fintech and enterprise software-focused funds like Victory Park Capital, GreatPoint Ventures, and Pritzker Group Venture Capital, as well as leaders in the blockchain space like Multicoin Capital, Wavemaker Genesis (part of the Draper Venture Network), and Jump Capital. The capital will be used to build the company’s platform in the coming months, to grow top-tier engineering team, and to deliver on its vision to decentralize credit and identity services.
Spring Labs was founded by members of the founding team and board of Avant, a lending platform and technology company that has served more than 600,000 customers and originated nearly $5 billion of loans through the Avant platform. Avant was recently ranked the 5th most valuable Fintech startup worth over $1 billion by Inc. Magazine. Through building Avant, the Spring Labs team witnessed firsthand the misaligned incentives and security problems of today’s credit and identity ecosystem. The company is looking to revolutionize the credit and identity sharing process through a decentralized network that enables a more transparent, efficient and secure model for sharing information related to identity and credit.
“In building a number of notable fintech companies like Avant and Future Finance, we’ve seen the issues within the credit and identity ecosystem firsthand. The 2017 Equifax hack that affected 140 million Americans is a public representation of underlying issues with how data is exchanged and secured among parties in the ecosystem,” said Adam Jiwan, CEO of Spring Labs. “Leveraging blockchain technology and our deep knowledge of financial services, we are engineering a fundamentally new way to approach the industry that benefits both consumers and financial institutions with greater data transparency, efficiency and security.”
The Spring Network will be built on a 2nd generation blockchain with the goal of enabling organizations to securely share beliefs about credit and identity data, incorporating both public and permissioned nodes to facilitate compliance with regulatory requirements and enforce information security through the use of privacy-preserving smart contracts.
To bootstrap early growth on its network, Spring Labs aims to launch a data partnership with Avant, which provides services to several large banks in the United States. Spring Labs is in discussions with banks about adopting the Spring Network for use alongside Avant’s bank-focused product Powered by Avant. Spring Labs is heavily focused on regulatory compliance with Anna Fridman, co-founder and General Counsel of the company, leading the function internally.
“We see a huge opportunity here to improve the infrastructure of the global credit ecosystem in a more decentralized and secure way, with the right incentives in place to drive participation and information sharing,” said Eric Carlborg, Partner at August Capital, “Further, this is a team we’ve known for years and backed in the past. They are the right group to not only develop this promising technology but also get it into the hands of the financial system in a regulatory compliant way.”