Wildcat Labs raised $3.5 million in a seed extension round led by Robot Ventures to scale its undercollateralized lending protocol within the Ethereum DeFi ecosystem, aiming to bring private credit markets onchain.

Executive Summary

Wildcat Labs, a developer of an undercollateralized lending protocol, has raised $3.5 million in a seed extension round led by Robot Ventures. The funding, which values Wildcat Labs at $35 million post-money, will be used to further integrate the protocol into the Ethereum DeFi ecosystem and expand the team. Wildcat aims to address transparency issues in crypto lending by allowing borrowers to customize loan parameters.

The Event in Detail

Wildcat Labs' seed extension round was led by Robot Ventures, with participation from Triton Capital, Polygon Ventures, Safe Foundation, Hyperithm, Hermeneutic Investments, and Kronos Research, as well as angel investors. The funding brings Wildcat Labs' total fundraising to $5.3 million. The company plans to use the new capital to expand its team and develop new on-chain private credit markets. Wildcat generates revenue by adding a protocol fee of 5% of the APR offered by borrowers in their markets; for example, a 10% yield offered by a borrower results in a 10.5% payment.

The round was structured as a Simple Agreement for Future Equity (SAFE), valuing Wildcat Labs at $35 million post-money, with investors acquiring a 10% stake.

Market Implications

Wildcat's protocol facilitates customizable undercollateralized credit lines for institutional borrowers, including Wintermute, Hyperithm, Selini Capital, Amber Group, and Keyrock. The protocol currently handles $150 million in outstanding credit, with over $368 million originated since the launch of its V2 version on Ethereum in February. By enabling credible borrowers to create their own custom markets, Wildcat aims to move beyond the rigid limitations of overcollateralization and create a foundational layer for capital-efficient lending in DeFi. This could potentially lead to increased adoption of Wildcat's protocol, unlocking more capital-efficient credit markets within DeFi and further integrating private credit markets onchain.

Expert Commentary

Jason Brannigan, partner at Kronos Ventures, stated that > "Undercollateralized lending has been a perennial challenge for DeFi. By enabling credible borrowers to create their own custom markets, Wildcat overcomes the rigid limitations of overcollateralization and creates a foundational layer for truly scalable and capital-efficient lending in DeFi."

Laurence Day, co-founder and CEO of Wildcat Labs, stated that > “Wildcat was created to allow the world the opportunity to participate in private credit markets, normally restricted to insiders, on terms visible to all”.

Broader Context

Wildcat aims to solve the issue of creating credit scores for onchain entities, targeting institutional players such as funds, market makers, and DAOs, rather than retail users. Unlike traditional protocols like Aave, Euler, and Compound, Wildcat loans can be undercollateralized. Wildcat's approach reflects a broader trend towards integrating private credit markets onchain, with protocols like RedStone also working to bridge the gap between DeFi and traditional finance through standardized risk frameworks.