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

Tare, a Brooklyn-based fintech, is seeking to consolidate the fragmented private credit infrastructure that nonbank lenders currently rely on. Lenders typically use several providers to originate and manage loans, maintain records, distribute payments, and verify transactions, and because those providers run on different internal systems, the process is slow and costly. Tare proposes to bring these functions onto a single blockchain-based platform.

The company announced Wednesday that it had raised a $13.25 million seed round, which closed in March. 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 round. The funds will be used to build loan management software on the Avalanche blockchain that creates digital records of loans and automates administrative work, hire staff, and obtain the licenses needed for its lending arm, Tare Credit LLC, to operate across the United States. The company has offices in New York and Lisbon, Portugal.

In an interview with Fortune, CEO Kevin Miao argued that the spread between what borrowers pay and what investors earn is often absorbed by intermediaries. Using mortgages as an example, he said middlemen costs inflate borrower rates while reducing investor yields, and that blockchain-based systems can automate that operational work and eliminate those extra costs. Miao said the goal is a platform that connects both sides of the market "with no friction."

Tare is not positioned as a direct competitor to existing crypto credit products. Aleks Larsen, a general partner at Blockchain Capital, told Fortune that the company is focused on updating the back-office systems financial firms use to manage loans. "I don't see a direct competitor in crypto today," Larsen said. "The old way of doing things is the competitor." Other companies have made progress in on-chain credit, including Figure, which operates a blockchain-based lending and loan-trading platform, Centrifuge, which tokenizes real-world assets including private-credit products, and Octaura, which offers tools for institutional credit trading.

The cofounders have worked at the intersection of credit and blockchain for years. Miao began his career at Citigroup in 2014, trading subprime mortgage products, and later launched BlockTower Credit, a $2 billion institutional private-credit fund focused on bringing real-world credit assets onto blockchain networks. Vogelsang cofounded Centrifuge in 2018, later became a venture partner at Blockchain Capital, and then turned to Tare. Moudgal was leading development at Kinexys, J.P. Morgan's internal blockchain unit. The three left their roles at the end of 2023 to launch Tare, concluding that earlier tokenization efforts addressed only isolated parts of the credit market.