According to recent reports, BlockFi — a provider of lending products backed by digital currencies — managed to raise as much as $18.3 million was raised in Series A funding with Valar Ventures at the lead. The company raised up to $53 million in deposits from various investors, during its short lifetime.
Major investors backing up crypto startup
Valar Ventures is a venture-capital firm which is still considered to be in its early stages. However, the interesting detail is that the company is led by Peter Thiel, one of the co-founders of PayPal. Thiel is a well-known investor who has had his eye on the fintech sector for several years, now.
The billionaire invested in numerous businesses, including the UK money-transfer service, TransferWise. He was also among early investors when it comes to Deposit Solutions and N26 — both rather successful Germany-based fintech startups.
Now, Thiel seems to believe that New York-based BlockFi should be his next major investment, and he is certainly not the only one. Other contributors to the lending products provider include Galaxy Digital, Akuna Capital, Winklevoss Capital, ConsenSys Ventures, Avon Ventures, Morgan Creek, Susquehanna, PJC, and CMT Digital.
Of course, PayPal is still rather careful when it comes to working with cryptocurrencies, and it is not easy to buy Bitcoin with PayPal, although many have found a few methods to bypass obvious restrictions. Even so, many found it encouraging to see PayPal co-founder lead the investment round of a crypto-oriented business, indicating that there is interest, even though the company is hesitating to approach crypto directly.
As for BlockFi, the lending products provider was already backed by some of the big names in the financial industry, including Galaxy Capital, which is led by billionaire Mike Novogratz. Novogratz is known for being a Bitcoin bull, and last year alone, his company raised around $58 million in different funding rounds.
Then, of course, there are the Gemini exchange owners, the Winklevoss twins. Gemini is currently also providing custody of accounts opened on BlockFi.
As for BlockFi itself, the company will undoubtedly be able to make great use of the new investments. They will be able to build out new products, as well as expand their platform, allowing it to include new interest-earning accounts for cryptocurrency-backed USD loans, and more.
The firm also stated that the platform attracted more than $53 million in deposits from different sources, including corporate, retail, and institutional investors.
BlockFi itself is quite a young service, only launching its business earlier this year, in March. It started offering loans to anyone interested in borrowing digital currencies. The lowest amount that can be borrowed is $2,000, while the highest right now goes all the way up to $100 million. The loans can be backed by Bitcoin, Ethereum, as well as Litecoin, with 4.5% interest.