Thiel-backed venture fund leads latest BlockFi crypto finance round

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BlockFi Inc., a crypto trading and lending platform, raised $30 million in its second round of financing, led by funding from Valar Ventures, a Peter Thiel-backed venture fund.

The Jersey City, New Jersey-based company plans to use the proceeds to increase staff and work on additional products, some of which are already under development.

“Thematically, this year for us is all about being able to target folks who aren’t already heavy cryptocurrency users,” Zac Prince, co-founder and chief executive officer of BlockFi, said in an interview at Bloomberg’s New York headquarters. “We’re going to be going after more mainstream adoption, which is great for us but also great for the sector.”

The firm — which has about $650 million in assets on its platform — said Morgan Creek Digital, Avon Ventures and Winklevoss Capital were among additional backers. Michael Novogratz’s Galaxy Digital Ventures LLC was part of BlockFi’s series A funding round, but did not participate in the second.

BlockFi made waves last year after it began providing interest-bearing accounts that offered returns paid out in bitcoin or ether. Skeptics pushed back, raising alarms over such offerings in an unstable area of the finance world that largely lacks regulatory oversight and has seen its share of fraud and scams.

The company’s revenue has grown 20-fold since January of last year, according to Prince. BlockFi also offers a trading product and crypto-backed loans. BlockFi declined to provide specific revenue figures.

But while institutions — including hedge funds, pensions and endowments — are boosting their cryptocurrency holdings, evidence that retail investors are piling in or using digital assets is scant. Prince hopes to change that trajectory with BlockFi’s offerings, likening the company to Social Finance Inc. — but for crypto.

“I’m a believer and we’re very bullish on the trajectory of the asset class,” said Prince, who spent time at Google and the fintech startup Orchard Platform, among others, before starting BlockFi. “It’s still very nascent but the underlying trends that drive adoption both on the institutional and retail side have continued to move in the right direction.”

Bloomberg News