The former co-founder at Simple Bank has launched a new startup to offer traditional banking services functionality through an early-stage fintech startup.
Sila was founded last year, and is currently in private beta test phase. On Thursday, Sila opened its beta to developers from fintech firms, including crypto startups and blockchain, and invited them to start building new tools with its API.
Startup describes itself as an “all inclusive API platform” that connects fintechs with other projects that are looking to modernize financial services. The startup connects existing payment systems such as automated clearinghouse (ACH) rails with smart contract functionality on ethereum for businesses that have difficulties receiving banking services.
Shamir Karkal (Sila co-founder, CEO) was also the co-founder of Simple. Simple was acquired by BBVA for $117 Million in 2014. Karkal explained that Sila’s backend issues customers ERC-20 tokens to represent the dollars it holds for them.
He said, “If you have ever spoken to anyone who has launched a fintech startup, they all have the same horror story: “Hey, I had this product, and then I learned about banking, and how horrible it is.”
Sila is a middleman between banks and hypixel skyblock coins startups, which means developers can get a product to market faster, he explained.
Access is the greatest problem in this space. It’s difficult to get a bank license and even a state money transmitter license. Accessing payment systems is very important and is subject to regulations. That’s one of our strengths.”
Although the company hasn’t officially launched, it has been operating for some time now, testing and building its systems. Karkal stated that the company has been working on it for over a year. “We did a small alpha last fall, with about 8-10 developers. Some of them are shipping their products.”
With its open beta, the hypixel skyblock money company plans to reach a wider range of developers. Karkal didn’t have a set timeline but told CoinDesk he was “penciling” in approximately six months. A full launch is planned for Q4.
The company plans to incorporate developer feedback and add new features, as well support a wider range of payment rails. More about Hypixel Skyblock Coins For Sale
Bank services
Karkal stated that he hoped to create the “AWSof finance”, referring to Amazon Web Services. This is Amazon’s cloud computing web service responsible for around 40% of the cloud market.
He explained:
It was difficult to start a tech startup back in 1998. It took months to build a website. AWS came along and everything is done in one click.
He said, “That’s exactly the thing we want to accomplish, but we want it to be done in finance.”
Five processes are supported by the API: ID verification, bank account link, token issuance and redemption, fund transfers, and token redemption
Sila’s API works on top of existing payment system, so the company offers KYC and AML services.
Karkal stated that “we remove all barriers to regulation, compliance and development cost so that innovators can bring an app to market within a matter of days.”
Karkal pointed out that Sila does not target individuals through its API. It is only focused on fintech startups, developers and investors.
This is the road so far
Karkal says that developer feedback has been crucial to the API’s improvements to date.
He said, “A lot of this is just sorta, ‘this stuff doesn’t really work’, or if it worked yesterday but doesn’t today’, or if it doesn’t perform the way I expected,'”.
Justin Thomas is a Sila Alpha customer and founder of Friendowment. Friendowment helps individuals save money by helping them share it. A spokesperson told CoinDesk that being able both to access a stablecoin directly and also using a traditional API was “incredibly powerful.”
His startup allows members of groups to share financial assets, each asset being tailored for the group that uses it.
“These assets are modeled as smart contracts on the ethereum blockchain and are denominated in a Friendowment-specific utility token,” he said, adding:
“Sila’s acceptance of blockchain to deliver their KYC and AML services enables us to seamlessly integrate the traditional bank ecosystem into our application in a secure, compliant way.”
Thomas stated that Sila found a way to allow his startup to use a blockchain efficiently while still delivering its services.
He told CoinDesk that he is confident that he’s only scratching the surface of what this model can do.
Sila is already making revenue through its services. Karkal explained that the startup charges a 0.4% transaction fee during its beta program. This is comparable to other payment platforms.
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