Fintech startup OpenFX has raised US$23 million in seed funding, led by Accel and supported by investors including NFX, Lightspeed Faction, and Castle Island Ventures.

The funding will help OpenFX expand into Latin America and Asia, launch treasury management products, and scale regulatory operations.

Founded in early 2024 by Prabhakar Reddy, who previously co-founded FalconX, OpenFX provides infrastructure for real-time cross-border payments and has facilitated an annualized transaction volume of US$10 billion in its first year.

The leadership team includes professionals from PayPal, Slack, Affirm, Kraken, and major banks such as JP Morgan, Goldman Sachs, and Citi.

OpenFX employs 42 people across offices in the US, UK, UAE, and India.

🔗 Source: YourStory

🧠 Food for thought

1️⃣ Cross-border payments infrastructure remains stuck in the 1970s

OpenFX’s mission highlights an often overlooked fact: despite tremendous technological advances elsewhere, international money transfers still largely rely on infrastructure created half a century ago.

SWIFT, the backbone of international banking messaging, was founded in 1973 with just 239 banks from 15 countries, a system now stretched to serve over 11,000 financial institutions across more than 200 countries 1.

This aging infrastructure explains why cross-border transfers typically take 2-7 days while domestic payments have evolved to real-time settlement in many countries 2.

The inefficiencies are significant: approximately $4 trillion in working capital remains trapped in this system, with hundreds of billions extracted in unnecessary fees annually according to OpenFX’s founder 3.

The company’s claim that 90% of its transactions settle within an hour represents a dramatic improvement over the industry standard, demonstrating the significant technological gap between legacy systems and modern alternatives.

2️⃣ Latin America presents a strategic fintech growth opportunity

OpenFX’s planned expansion into Latin America targets a region experiencing remarkable fintech adoption despite significant structural challenges.

The Latin American fintech sector more than doubled in size between 2018 and 2021, with 1,166 fintech startups now operating across 18 countries in the region 4.