BlockFi gets a $3 billion valuation with new $350 million Series D funding
New Jersey-based cryptocurrency lending firm BlockFi has taken on $350 million in Series D venture capital funding - one of the largest to date among blockchain and cryptocurrency startups. The deal increases the company's private valuation to $3 billion, up from a $435 million valuation when it raised $50 million in Series C funding just six months ago.
According to BlockFi’s statement, the round was led by Bain Capital Ventures, partners of DST Global, Pomp Investments, and Tiger Global. The investment follows three prior rounds within the last two years, totaling more than $100 million, raised from venture capital firms including Galaxy Digital, Susquehanna, and Winklevoss Capital.
The size of the round reflects “our growth, the size of the industry, and as a result, the size of businesses that can be built in this industry,” says Zac Prince, CEO and co-founder of BlockFi. “If you look at some of the constituents in the round, it's a testament to increasing institutional adoption, and participation in the crypto ecosystem or crypto as an asset class by very high-quality and sophisticated institutional investors.”
Founded in 2017 by Zac Prince and Flori Marquez, BlockFi quickly became a leading cryptocurrency lending provider. Its products span multiple categories including crypto-collateralized USD loans (Clients can gain liquidity without having to give up their crypto assets by simply depositing their cryptocurrency as collateral and taking loans against that collateral in fiat) and interest-bearing accounts through which investors can earn up to 8.6% APY interest on their crypto holdings.
BlockFi’s platform currently manages more than $15 billion in assets. From a revenue just short of $100 million in 2020, the startup is on a run toward generating $500 million in revenues in 2021, according to Prince. Since the end of 2019, it grew its client base from 10,000 to over 250,000 today. According to the U.S. Securities and Exchange Commission (SEC) filings submitted in October, BlockFi also holds 5.07% of Grayscale’s $34.91 billion bitcoin trust (GBTC).
BlockFi’s London-based competitor, Celsius Network, has also experienced explosive growth. In less than half a year, Celsius’s asset holdings increased from $3.3 billion in November to today’s $9.5 billion and the number of users has more than doubled over the same period, currently totaling more than 482,000. The crypto lending industry has grown from approximately $20 billion in assets under management at the end of Q3 2020 to over $40 billion at the end of the year, a gain of 116%, according to a report by crypto credit bureau Credmark.
With the capital raised, BlockFi is looking to expand its presence in Europe with a base in London and the Asia-Pacific region with a focus on Hong Kong, Singapore, and Australia markets. Additionally, BlockFi employees, who have worked with the company for more than one year will be able to sell some of their shares and receive liquidity without having to wait for the company to go public.
BlockFi recently hired multiple senior executives formerly employed at JPMorgan Chase, Bank of America Merrill Lynch, Deutsche Bank, and World Gold Council and announced a number of retail and institutional investor-focused products and initiatives. These include the BlockFi Bitcoin Trust, an OTC trading desk, and private client services in Asia. In early Q2, the company will start shipping its bitcoin rewards credit card to clients on the waitlist, which has over 100,000 sign-ups. OTC derivatives offering will also be introduced later in the year.
A nascent crypto unicorn and one of the fastest-growing fintech startups, BlockFi could follow the footsteps of Coinbase, the largest cryptocurrency exchange in the U.S., which filed an S-1 registration with the SEC on February 25, ahead of its planned direct listing public offering. Rumors of BlockFi’s potential IPO started to circulate last July following reports of a job opportunity, part of which involved helping the company go public.
Prince confirmed the company is “actively working on public market readiness” but did not disclose the timeline.
On Sunday, BlockFi faced a spam attack. Approximately 500 emails containing racist language were sent to email users. As a result, client sign-ups had been paused for two days and re-enabled yesterday.
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