Crypto-lending platform, BlockFi, has raised $350 million in its latest investment round, valuing the company at over $3 billion.
The Future of Finance
BlockFi, a New Jersey-based cryptocurrency lending platform, is worth over $3 billion after its latest funding round raise.
The Series D funding, which totaled $350 million, came from many venture capitalists, including Bain Capital, Pomp Investments, and Tiger Global.
All three have a history of investing in the cryptocurrency and decentralized technology space, with the latter, Tiger Global, investing $500 million in cryptocurrency exchange Coinbase in 2019.
For BlockFi, the sizeable investments saw its valuation increase by a factor of seven after a $50 million raise just six months ago produced a valuation of $435 million.
Indeed, BlockFi is a veteran fund-raiser, raising over $100 million in three previous such rounds since 2019. Moreover, these funds came from the likes of Galaxy Digital and the Winklevoss twins, owners of Gemini Exchange.
BlockFi’s Chief Executive Officer, Zac Prince, said of the latest raise that its size reflects the company’s growth and the potential of the cryptocurrency industry.
“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.”Zac Prince – CEO and co-founder – BlockFi
BlockFi the First Mover
BlockFi is not only a veteran fundraiser; it is a first-mover in the cryptocurrency space. Zac Prince and Flori Marquez founded the lending company in 2017 to provide collateralized loans to cryptocurrency holders.
The company quickly became the top lending platform in the space, today managing over $15 billion in assets. In 2020, BlockFi saw a revenue of $100 million, with this on track to quintuple this year.
Accordingly, its client base has significantly grown in recent years. In 2019, the firm had just 10,000 regular users, compared to 250,000 today.
BlockFi is also one of the largest holders of cryptocurrencies in the space. According to a company filing submitted last year, it owns 5.07% of Grayscale Investment’s Bitcoin Trust (GBTC). This represents a value of just over $1.5 billion at current market rates.
Indeed, the crypto-lending market is exploding. Competitor Celsius Network saw its crypto-holdings triple from $3.3 billion in November to $9.5 billion today.
Demand is Surging
Both these valuations and surge in users comes as the wider cryptocurrency market soars in terms of value. Bitcoin (BTC) passed the $1 trillion last month as institutions continued to purchase the top-cryptocurrency in droves.
Several exchange-traded-funds (ETFs) saw the benefits of this interest, with newly launched Canadian ETF, Purpose Bitcoin, attracting over $400 million just two days after launching.
Expectedly, the surging demand is leading to cryptocurrency shortages, as BTC supply on exchanges hit a two-year low. Moreover, this is compounded by the fact that miners are beginning to hoard rather than sell, according to data.
BlockFi’s funding gives it a stellar valuation and also indicates a wider market “bullishness.”