If there have been any doubt a few cryptocurrency growth, we want look no additional than on the explosion of progress of sure firms within the area.
One such firm is BlockFi, which as we speak introduced it has closed on a large $350 million Sequence D funding that values it at $3 billion. Whereas this information in and of itself is actually attention-getting, it’s much more spectacular when you think about the startup simply raised a $50 million Series C final August at a $450 million valuation. The most recent financing brings its whole fairness raised since inception to about $450 million, with the corporate elevating $100 million throughout its seed and Sequence C rounds.
Zac Prince — who comes from a background in shopper lending — based BlockFi with Flori Marquez in 2017. The Jersey Metropolis, New Jersey-based startup raised $1.6 million in a seed spherical of funding that closed in 2018 and was led by ConsenSys Ventures and included participation from SoFi.
Prince describes BlockFi as a monetary companies firm for crypto market buyers that provides a retail and institutional-facing suite of merchandise. On the retail aspect of its platform, individuals can use its cell app to earn a yield on their crypto holdings (6% on Bitcoin, 8.6% on stablecoins), purchase and promote crypto and get low-cost loans secured by the worth of their crypto portfolio “to allow them to get liquidity with out promoting,” he mentioned. Particularly, shoppers should purchase and promote digital property (from Bitcoin, Ethereum and Hyperlink to Litecoin, PaxG and a number of stablecoins) immediately on BlockFi.
The startup can also be a lender and supplier of commerce execution companies to establishments taking part in digital asset markets.
It’s a mannequin that appears to be working in a giant approach. Because the finish of 2019, BlockFi has seen its consumer base develop from 10,000 to greater than 225,000. At the moment, BlockFi has 265,000 funded retail shoppers and over 200 institutional shoppers.
And it’s lent over $10 billion to its retail, company and institutional shoppers.
Over the previous 12 months, BlockFi has additionally achieved the next:
- Elevated the variety of property on its platform to $15 billion, in comparison with $1 billion final March — with a 0% loss fee throughout its lending portfolio since inception.
- Bumped its month-to-month income to over $50 million, up from $1.5 million a 12 months prior.
- Boosted its headcount to about 530 individuals, in comparison with 100 final March.
“In lower than six months since we accomplished our Sequence C, Bitcoin and different digital property have assumed a central function in lots of buyers’ portfolios and in broader monetary markets,” Prince mentioned. “Our conviction that digital property are the way forward for finance has been vindicated by our consumer base, which grew 10 occasions 12 months over 12 months in 2020 and has greater than doubled because the finish of 2020.”
New investor Bain Capital Ventures, companions of DST World, Pomp Investments and Tiger World co-led the Sequence D, which included participation from a slew of different companies together with current backer Valar Ventures, Breyer Capital, Susquehanna Authorities Merchandise, Soar Capital and Paradigm, amongst many others. BlockFi workers who’ve been employed for a couple of 12 months have the chance to obtain liquidity on a portion of their fairness by way of a secondary tender supply as a part of the financing spherical.
BlockFi believes that investor enthusiasm for the Sequence D spherical displays each the corporate’s sturdy enterprise progress, in addition to “broader conviction in cryptocurrencies as an asset class.”
“Particular person buyers, institutional asset managers and company treasury departments are all exploring avenues to put money into cryptocurrencies,” the corporate mentioned.
“Our purpose for BlockFi has at all times been for it to facilitate cryptocurrencies going mainstream – and every day supplies extra proof that’s precisely what is happening,” mentioned Marquez, who serves as the corporate’s SVP of operations.
Bain Capital Ventures Associate Stefan Cohen agrees. He believes there are presently restricted banking companies out there for crypto holders, which places BlockFi in an opportune place.
“Bitcoin has already eclipsed $1 trillion in market cap and is probably going headed greater to satisfy its retailer of worth promise. As wealth accumulates to BTC holders, most will search for methods to earn yield or borrow in opposition to their holdings for extra conventional asset purchases comparable to properties, automobiles and training,” he wrote by way of e mail. “BlockFi stands alone because the chief in bringing easy, safe, on a regular basis monetary companies to cryptocurrency holders.”
The startup’s exponential progress over the previous 12 months proves “there was clearly an enormous want for BlockFi’s companies,” Cohen mentioned.
“Their imaginative and prescient was to construct an easy-to-use, trusted platform to convey cryptocurrency to the mainstream, they usually’ve actually succeeded,” he added.
In the meantime, Cohen mentioned Bain Capital has had a long-term thesis on Bitcoin turning into a retailer of worth and has actively invested in “picks-and-shovels companies” that allow what’s now a $1 trillion-plus market.
“Trusted monetary companies are a crucial pillar of the area, and we view it as a extremely strategic element of the market,” he added.
Wanting forward, the startup has plans to launch within the second quarter a Bitcoin Rewards Credit Card, which can give BlockFi shoppers the power to earn Bitcoin money again on each transaction. It plans to make use of the brand new capital to proceed rising its product suite, broaden into new international markets and for strategic acquisitions. The corporate additionally plans to double its headcount by 12 months’s finish, in keeping with Prince.
BlockFi already has a worldwide presence and retail shoppers in over 100 international locations. Final 12 months, it opened institutional consumer service workplaces in London and Singapore. This 12 months, the startup is wanting so as to add regional assist in Europe, APAC and LatAm for its retail shoppers.
Over the previous week, BlockFi was making headlines for different causes. The corporate was the sufferer of an “unusual assault” on March 7 when an attacker spammed the platform with pretend sign-ups and abusive language.
To that finish, the corporate acknowledges that it turned conscious that an unauthorized third celebration started making an attempt bulk sign-ups on its platform on March 7.
“We have no idea the origin of the e-mail addresses used for these ‘sign-ups’ however they didn’t come from us they usually have been not the emails of BlockFi shoppers,” the corporate informed . “Typically, we’d characterize the occasion as vulgar spam’ and the entire variety of legitimate emails affected was lower than 1,000.”
The corporate maintains that no knowledge from BlockFi was accessed and its knowledge was not compromised.
“Our shoppers’ funds and knowledge have been safeguarded all through the incident,” the corporate added. “Since then, our engineering and safety groups have taken steps to stop occasions like this from occurring sooner or later. As well as, we reached out on to all the legitimate e mail recipients to apologize for the incident.”
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