On Our Radar: Deals we are paying attention to for their impact on industry.
Cryptocurrency firms raised $850 million in 13 separate venture-capital deals involving corporate funding as of April 8 this year, with investments focusing on companies that are making digital currency payments more mainstream, according to data compiled by PitchBook for Reuters.
If the current pace continues, investments this year will top the $2.4 billion in 117 deals made in 2018.
These investments can be seen as a long-term bet in cryptocurrency by mainstream companies that seek to develop its infrastructure and make it more accessible. Interest in cryptocurrency investments continue to grow, and some of the biggest recipients of funding in recent months are the exchanges themselves, such as Bithumb and Liquid.com, which are seeking to expand globally.
“There is a huge experimentation in effectively the basic plumbing for a native economic layer to the web,” Jamie Burke, CEO of Outlier Ventures, told Reuters. The firm has led investment in multiple blockchain-related projects.
Among the mainstream backers involved in recent crypto deals is the London Stock Exchange, which led a $20 million funding round for Nivaura in February. Additional backers include the venture capital arm of Santander Bank and blockchain VC firm Digital Currency Group.
Nivaura aims to eliminate financial middlemen in capital markets by facilitating direct deals to investors. CEO Avtar Sehra said cryptocurrency can simplify that process and reduce fees for investors, adding, “In the traditional world, you have this complex and paid chain of custody that can be eliminated using a blockchain.”
Streamlining cryptocurrency investments is also the focus for Tagomi Holdings, which received $12 million in funding from Yale-backed Paradigm Fund and other funders including Pantera Capital in March. Tagomi offers trading and portfolio management services to ease institutional investment in crypto.
“We are excited to partner with investors who have experienced first-hand the frustrations around the lack of infrastructure, and work toward our shared vision of building next generation robust trading technology,” co-CEO Greg Tusar said in a statement announcing the funding.
Chainalysis, a cryptocurrency firm focused on compliance and investigation solutions, completed $36 million in funding on April 16. The Series B round included backing from Mitsubishi UFJ Financial Group (MUFG), the fifth-largest bank in the world.
Enabling cash-like payments
MUFG has announced plans to launch a stablecoin pegged to the Japanese yen, with the stated goal of enabling consumers to use cryptocurrency as they would cash, to “make payments at places like restaurants, convenience stores and other shops.”
That’s the vision behind several other ventures as well.
Microsoft’s venture capital arm M12 backed Bakkt in a $182.5 million funding round announced on Dec. 31. The crypto-trading platform founded by the owner of the New York Stock Exchange, Intercontinental Exchange, also has an equity deal with Starbucks that includes developing software that will enable customers in the US to buy their coffee with cryptocurrency.
And on April 17, Bolt Labs secured $1.5 million in seed funding led by Dekrypt Capital with investments from Lemniscap, Access Ventures, and Ripple’s Xpring. The company is looking for ways to increase privacy in blockchain transactions to enable payments closer to cash, without sharing personal information.
A Ripple spokesperson told CoinDesk doing so would improve both the developer and end user experience, “thereby paving the path for the mass adoption of crypto.”
Ambreen Ali is a freelance writer and editor based in the New York City area who specializes in business and technology. She has 15 years of reporting experience, including covering Capitol Hill and reporting from South Asia.