Augustus raises $180mn to build direct dollar clearing rails

Augustus has raised $180 million in a Series B funding round that values the clearing bank at $1 billion, according to Finextra. The financing gives the company fresh capital to expand direct access to dollar accounts and payment rails for banks and fintech firms in Latin America, Southeast Asia, the Middle East and Africa.

Tiger Global led the round, with participation from Hummingbird, QED and the founders of Nubank, Ramp, Circle and Deel, Finextra reported. Augustus is positioning itself as a regulated alternative to correspondent banking arrangements, where institutions often rely on intermediary banks to move dollars across borders.

Finextra said the company already processes billions for customers including cryptocurrency platform Kraken. The company’s target market includes financial institutions that need dollar accounts, dollar clearing and connections to domestic and international payment networks without relying on a chain of third-party providers.

Direct access to accounts and payment networks

Augustus uses an API-first platform that supports operating accounts and FBO accounts with named virtual accounts, according to Finextra. Through that structure, customers can transact with first and third parties using Swift, ACH, Sepa and stablecoins.

The model is designed to reduce dependence on intermediary banks and fintech middleware providers. In correspondent banking, one bank typically holds deposits or processes payments on behalf of another, allowing institutions without direct access to a market to send and receive funds there. Augustus is seeking to place that function inside a technology-led clearing bank with regulated infrastructure.

The company is also investing in Marble, its proprietary core banking platform, which Finextra said is intended to support faster settlement and real-time availability using artificial intelligence across back-office functions. No further technical details on Marble were disclosed.

Regulatory status and global context

The fundraising follows Augustus becoming the eighth bank since 2010 to receive conditional approval from the Office of the Comptroller of the Currency for a US national bank charter, according to Finextra. That approval places Augustus among a limited set of technology companies allowed to build federally regulated banking infrastructure in the US from the ground up.

The company is raising capital during a period of renewed debate over international payments infrastructure and the global role of the dollar. Finextra cited European banking and payments leaders examining ways to reduce reliance on US payments structures, as well as China’s launch of the Digital Yuan and Russia’s proposal for BRICS Pay as an alternative clearing system.

Ferdinand Dabitz, chief executive and co-founder of Augustus, said the company began with the view that dollar distribution was not working effectively. “This financing lets us execute on our mission to provide high-quality dollar access to international fintechs and banks. It's time to dollarize the world,” Dabitz said.

Nigel Morris, co-founder of Capital One and managing partner at QED Investors, said correspondent banking remains a part of banking infrastructure that has faced less fintech competition than other areas. He said global fintechs and banks have had to choose between incumbent correspondent banks and middleware providers, and described Augustus as combining technology with a bank charter to offer a direct dollar clearing platform.

This story draws on original reporting from Finextra Research.