Foreign exchange fluctuations can make or break a business that trades across borders, but trying to respond to that 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 it said will let finance teams from companies of any size better understand and be more responsive to FX changes with hedging transactions. It’s hitting the ground running with funding of more than $50 million and a processing volume (picked up while in stealth) of $1 billion+.
To put that figure into perspective, that processing volume is a relative drop in the ocean: Grain estimates that there is more than $150 trillion in cross-border transactions annually. So it’s small, but it speaks to the potential of how Grain might grow.
The funding is actually coming two tranches. A $33 million Series A that has just closed is led by Bain Capital Ventures, with previous backers Aleph, Vessey Ventures, and Hanaco Ventures participating. Before that, Tel Aviv-based Grain, founded in 2022, raised an $18 million seed round.
Grain borrows from 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, typically FX trading is used by very large enterprises working with investment banks. They monitor the markets and use derivative algorithms to make decisions on what currencies to buy and sell, using giant tranches of money from an enterprise’s treasury — generated through sales, in their current accounts — to keep their balances not just steady relative to the rest of the global market, but potentially also in the black.
This is necessary so that if, say, a company in the U.S. is selling goods in a market where the currency is tanking, to try to make sure that they can in the end still have the best revenues and margins from those sales as possible.
All of this is fine and well, except that you have to be a Very Large Company in order to do this, and to benefit from it.
The basis of Grain’s product is an embedded solution that right-sizes that concept to smaller transactions. Just as Robinhood has created micro-investing opportunities — it lets ordinary people buy fractions of shares, which then behave like full shares, and Robinhood packages these up into bundles that are then actually traded — Grain does this with its FX derivatives, using AI to find the best FX hedges, and then wrapping up multiple trades to run as a whole for economies of scale.
All of this is executed as a simple process that can be embedded into whatever interface a finance team is using to crunch their numbers.
The resulting shifts that currencies make can then be used to help inform how a company prices its goods for sale across marketplaces and other points of sale.
Co-founder and COO Michal Beinisch likens it to “what Stripe did for payments, we have done for derivatives.”
One of the reasons why the team was able to raise this amount of money while still in stealth is because of the background of its founders. 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.” Chief business officer Aharon Navon previously led Barclays CEEMEA FX and rates trading. 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 the fintechs Melio, Bluevine, and Rewire.
And it’s telling that Series A was led by Bain’s Mark Fiorentino, who was an early employee at Stripe before moving over to VC at Index and now 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,” he 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.”
