Foreign exchange fluctuations can make or break a business that trades across borders, but keeping up and responding to the FX market can be tricky if you’re anything smaller than the world’s largest enterprises.
Today, a startup called Grain is emerging from stealth with a product that it says will let finance teams at companies of any size better understand and be more responsive to FX changes by hedging transactions. The company is hitting the ground running with funding of more than $50 million and processing volume (picked up while in stealth) of more than $1 billion.
To put that processing figure into perspective, $1 billion is a relative drop in the ocean: Grain estimates that the world sees more than $150 trillion in cross-border transactions every year. Still, it speaks to how much potential Grain has to grow.
The funding was raised in two tranches: The company recently closed a $33 million Series A that was led by Bain Capital Ventures, and saw previous backers Aleph, Vessey Ventures, and Hanaco Ventures participating. Before that, Tel Aviv-based Grain raised an $18 million seed round.
Founded in 2022, Grain borrows a few concepts that have worked in other parts of the fintech world to build its product.
As CEO and co-founder Dor Golan explained it in an interview, FX trading is typically used by very large enterprises working with investment banks. They monitor the markets and use derivative algorithms to make decisions on which currencies to buy and sell, using giant tranches of money to keep their balances not just steady relative to the rest of the global market, but also in the black.
This is useful when, for example, a U.S. company is selling goods in a market where the currency is tanking. The company can try to hedge against foreign exchange fluctuations to ensure it has the best revenue and margins from its sales as possible.
All of this is great, except you have to be a Very Large Company to do this, let alone benefit from it.
The basis of Grain’s product is an embedded solution that right-sizes that concept to smaller transactions. Similar to how Robinhood created micro-investing opportunities by letting ordinary people buy fractions of shares, Grain uses FX derivatives and AI to find the best FX hedges, and then wraps up multiple trades to run as a whole to avail economies of scale.
All of this is executed as a simple process that can be embedded into whatever interface a finance team uses to crunch numbers. The resulting shifts in currencies can then be used to inform how a company prices its goods across marketplaces and other points of sale.
As Grain’s co-founder and COO Michal Beinisch puts it, “What Stripe did for payments, we have done for derivatives.”
One of the reasons Gain was able to raise this amount of money while still in stealth is because of its founders’ backgrounds: All of them have all worked in financial services before.
Golan was previously a managing partner at Blue Orca Capital and co-founder of Horizon, a “crypto liquidity firm,” while chief business officer Aharon Navon previously led Barclays CEEMEA FX and rates trading. Meanwhile, Beinisch was the COO of Barclays Israel and global head of Rise, Barclays’ fintech innovation platform; and chief product officer Nir Galon has led product at fintechs Melio, Bluevine, and Rewire.
It’s telling that the Series A was led by Bain’s Mark Fiorentino, who was an early employee at Stripe before he became a venture investor at Index and later moved to Bain.
“Founder-market fit is important, and it’s difficult to find a better example of this than the Grain team as evidenced by their unique technical and commercial expertise in cross-border payments and connectivity within the banking ecosystem,” Fiorentino said in a statement. “They’ve built Grain with an AI-native, user-first ethos, which means they can deliver greater stability, cost savings, and even revenue uplift for customers while reducing their largest operational headaches.”
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