The world of digital trade finance has gone through yet another shake-up. Singapore-based fintech start-up Xalts, has announced the acquisition of Contour Network. 

Contour was launched in 2020 by a group of leading banks, including ANZ, BNP Paribas, HSBC, and Standard Chartered, with the aim of digitising and streamlining the documentary trade process.

Contour was comprised of a network of 21 banks and an array of partners from different industries. Additionally, Contour was supported by various integration and documentation collaborators such as Finastra, CargoX, Bolero, and Surecomp.

Xalts, utilised by institutions for creating multi-party applications aimed at digitalisation and tokenisation, intends to utilise Contour’s industry-standard workflows and integrations. This is to streamline communication and transactions between enterprises and financial institutions within the network.

A change of direction

Just a few months ago, in October 2023, Contour announced plans to suspend operations due to insufficient funding from their major bank shareholders.

Now, the platform will get a second chance to impact the trade finance industry, albeit under a different company umbrella.

The trade finance industry was on edge regarding the collapse of the Contour Network. The network was supported by some of the largest names in the financial industry, which made its collapse shocking for many.

Four months later, Contour was thrown a lifeline by Xalts. This development has implications beyond a simple acquisition. Contour was seen as one of the more promising platforms in the industry, and its collapse was a signal of potentially dark times for the path to greater digitalisation.

In October, Trade Finance Global spoke to Andre Casterman, Founder, Casterman Advisory about the announced collapse of Contour. He said,  “The documentary trade finance market is probably the hardest segment to transform digitally, which is why those courageous ones who dare to innovate in this segment ought to focus on addressing specific pain points and show much patience. 

Over the last 5 years, we have witnessed many banks adopting document checking and compliance monitoring technologies. Also, large corporates are increasingly adopting multi-banking trade platforms as they have done on the treasury side for around two decades. 

I expect much progress in the near term on this front thanks to several platforms, including Contour, offering relevant multi-banking options for MNCs. But patience is key, have banks involved in consortia lost patience with themselves?”

While the industry still will be in a wait-and-see mood, the acquisition potentially signals that the consortia have not lost patience with themselves, and that the digitalisation movement might not be dead in the water.

What next?

Given Contour’s standing and connections in the trade finance industry, Xalts stands to rapidly expand its current model, potentially bypassing many of the growing pains that an 18-month-old start-up would normally experience.

Ashutosh Goel, CEO of Xalts said, “This will offer financial institutions and clients the opportunity to tap into a growing ecosystem of providers. Our vision is to expand the scope of Contour’s network which is trusted by banks and corporates, and build it into a rail that enables businesses to access digital solutions for trade and supply chain finance offered by banks, fintechs and technology partners. Combining our platform with Contour’s Network will allow participants to develop and deploy customized solutions quickly”

Carl Wegner, the former CEO of Contour, is expected to join Xalts in a senior leadership capacity. He said, “I am really proud of what Contour has been able to accomplish in such a short time. The vision that Xalts has for Contour’s future turbocharges its strengths and addresses key client needs.”

Xalts has stated that they will initially focus on embedded trade and supply chain finance solutions, enabling banks, logistics, and technology companies to offer integrated solutions on one platform.

The partnership seemingly is a good fit, as Xalts offers financial institutions a single platform to replace paper-based processes with digital solutions, minimising the cost and time of using multiple pieces of software. 

The next steps of integrating, and growing both the Contour and Xalts platform will be key. Not just for this acquisition, but for the continued progress of digitalising trade finance solutions.