BlockFi raises $30M Series B

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To investors,

BlockFi has announced a fresh $30 million of funding for their Series B this morning. It was led by Valor Ventures, along with material participation from the team at Morgan Creek and a number of other existing investors.

Flori Marquez and Zac Prince

This funding comes approximately 6 months after BlockFi announced their $18M Series A funding round. While this may seem like a quick new round of funding, there are a number of important details to pay attention to:

  1. BlockFi’s Series A was announced after they had already raised the capital and begun putting the money to work.

  2. BlockFi’s revenue has increased by more than 20x in the last 12 months.

  3. BlockFi’s annualized revenue run rate has doubled in the last 45 days or so.

  4. BlockFi now has more than $650 million in assets under management on the platform.

  5. BlockFi’s current headcount is approximately 75 people and they are looking to increase to 125 - 150 people in 2020.

The company currently offers three products on their platform — US dollar loans against crypto collateral, interest-bearing deposit accounts, and a cryptocurrency exchange. They have also told clients that they will be launching a credit card this year that pays 1.5% - 3% “cash back” in Bitcoin, rather than cash or reward points.

The interesting part is that not all of these products require someone to buy or use Bitcoin or Ethereum though. You can take fiat US dollars, digitize them into GUSD or USDC, and then deposit them into the interest account and receive 8.6% APY right now. Think about that. Most people are earning 1.5% or less on their money market accounts and 0.05% or less on their deposit/savings accounts in the legacy system. But if you use digital dollars, you can earn 8.6% APY.

This is the future of a global financial system.

The products are exciting and people obviously find them valuable. I am most excited about BlockFi though because of the team. Flori and Zac continue to execute at a very high level and they understand the most important part of building a business — build something that people want.

Not very many teams have been able to raise tens of millions of dollars in the last two years of the crypto industry. BlockFi has ambitious plans and now they have the capital to position themselves to capture the opportunity in front of them. It will be fun to watch them continue their journey to building essential infrastructure for this new digitized world.

If you’re interested in signing up for a BlockFi account, you can use this link and they will give you some free money as a bonus: Click here to sign up for BlockFi account

Onwards for BlockFi! And onwards for Bitcoin and the crypto industry!

-Pomp


This installment of Off The Chain is free for everyone. I send this email to our investors daily. If you would also like to receive it every morning, join the 40,000 other investors today.


THE RUNDOWN:

BlockFi Raises $30 Million in Funding: 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. Read more.

Ramp, a Corporate Credit Card Provider Raises $25 Million: A new credit card startup is taking aim at American Express and other stalwarts that have long dominated corporate expense accounts. Ramp, a New York-based fintech firm whose founders sold their last venture to Capital One, has raised $25 million and signed up nearly 100 businesses to its card, the company announced Wednesday. Ramp declined to disclose its valuation, but Keith Rabois, a partner at Founders Fund who invested in the company and now sits on its board, said the number is well below $1 billion. The startup's investors also include BoxGroup, Coatue and Conversion Capital, among others. Read more.

Wells Fargo Invests $5M in Startup Connecting Crypto Exchanges and Banks: Banking giant Wells Fargo is backing blockchain forensics firm Elliptic. The fresh $5 million from Wells Fargo Strategic Capital brings Elliptic’s Series B up to a total of $28 million. The investment is partly geared toward a recently launched product that helps crypto exchanges win banking relationships, Elliptic said. The product, Elliptic Discovery, provides a bill of health for over 200 crypto exchanges worldwide, covering everything from how they conduct know-your-customer (KYC) checks to whether they’re regulated in the first place. Read more.

IRS Refused to Clarify That Its Crypto Tax Guidance Isn’t Binding, US Watchdog Says: The Internal Revenue Service (IRS) should – but won't – clarify how taxes are levied on cryptocurrencies and cryptocurrency transactions in the U.S., the government’s top auditing institution said Wednesday. The Government Accountability Office, a U.S. Congress watchdog, published a report in response to a request from Rep. Kevin Brady (R-Tex.), evaluating the IRS’s existing approach and public guidance surrounding cryptocurrencies.Read more.

US Military Contractor BAE Systems Wants to Hire ‘Cryptocurrency Exploiters:’ One of the world's largest defense contractors is seeking "cryptocurrency exploiters" to support a client based in Washington, D.C. As advertised on LinkedIn, BAE Systems, McLean, Va., is searching for candidates who can "demonstrate proficiency in cryptocurrency" and can move to the Washington metropolitan area to "support a client’s operational requirements." Read more.


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Rich Greenfield is a Co-founder and Partner at LightShed Partners. He is widely considered one of the best TMT analysts on Wall Street. This episode is special because Rich covers a range of topics, while sharing his perspective as an investor, an analyst, and an entrepreneur. People are already saying this is one of their favorite episodes in a long time, so highly recommend listening!

In this conversation, Rich and I discuss:

  • New media models (Barstool, The Athletic, Substack)

  • Streaming wars (Netflix, Disney+, Hulu, etc)

  • Music platforms (Spotify, Apple, Prime)

  • Where political advertising goes if cable bundles become less popular

  • How Lightshed thinks about Twitter, TikTok, and Quibi

  • The media’s war on time and attention

I really enjoyed this conversation with Rich. Hopefully you enjoy it too.

LISTEN TO THIS EPISODE OF THE OFF THE CHAIN PODCAST HERE


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Nothing in this email is intended to serve as financial advice. Do your own research.