Sila, the banking and API payment platform set up by former Simple co-founder Shamir Karkal, has closed a $7.7 million seed funding round.
The round is co-led by VC firms Madrona Venture Group and Oregon Venture Fund, with support from Mucker Capital, 99 Tartans, Taavet Kinrikus, CEO & Co-founder of Transferwise, and investor & entrepreneur Jerry Neumann.
Sila launched its Infrastructure-as-a-Service (IaaS) platform in April 2019 to help companies integrate their business applications with financial networks. The firm's REST APIs provide a layer on top of the existing ACH network, with applications for identity/KYC verification, bank account linking, and digital wallet deposits baked in.
The API includes a built-in stablecoin - Sila - which is an ERC-20 token pegged 100:1 to the US Dollar, with fully insured funds held by an FDIC member bank. The coin supplants fiat for the purpose of money movement, settling transactions within minutes rather than the two-day timeline on the US ACH network.
Karkal says that global payments networks are too expensive, inefficient, tightly regulated, and difficult to integrate into fintech applications. Having been hired from Simple to head up BBVA's Open API platform, Karkal moved on to pastures new after becoming frustrated by the burdensome compliance demands that come form working with a big bank.
"Despite money being effectively digital for decades, the world of finance has still not truly been disrupted by the Internet," he says. "The global financial system isn't controlled by PayPal or Stripe, but by 30,000 global banks that still run on outdated payment systems like ACH. Our mission is to unite all the payment systems in one programmable layer to spur the next phase of financial innovation."