State Street Joins S&P to Fund Crypto-Assets Software Firm

State Street Joins S&P to Fund Software Firm for Crypto Assets

Joanna Ossinger

11 Dec 2020, 10:32 AM IST

(Bloomberg) -- State Street Corp. and S&P Global Inc. participated in a funding round for Lukka Inc., giving a boost to the U.S. cryptocurrency software and data provider that’s already working on a global crypto index with S&P.

A unit of the U.S. accounting association AICPA also joined the $15 million round, according to officials at State Street and Lukka. The New York-based company, which raised $6 million in June, sought more money to develop its existing institutional-grade software and data products to attract traditional businesses and funds that are adopting crypto assets.

“This is going to be a scaling phase for us,” said Robert Materazzi, Lukka’s CEO, in an interview. “It’s focused on driving revenue.”

Lukka is raising money at a time when interest in cryptocurrencies and other digital assets has been soaring along with their prices. With the Bloomberg Galaxy Crypto Index nearly tripling this year, interest has also grown in how back offices can account for assets that are recorded on the still-developing blockchain model of ledgering.

Lukka sees itself as bridging the gap between the complexities of blockchain data and traditional business needs. It has plans to release a free retail portfolio-management tool. And while the current product converts asset values into U.S. dollars, the firm expects to offer the capability to convert that into the top 15 or so other fiat currencies, Materazzi said.

Crypto as an asset class has gained appeal in the pandemic for what enthusiasts say is its resistence to inflation. Bitwise, which manages more than $100 million in crypto assets in San Francisco, began listing its index fund on over-the-counter markets on Wednesday, making it tradeable via traditional brokerage accounts.

Jen Tribush, global head of alternative-product solutions for State Street, said it “was attracted to Lukka’s institutional approach to the asset class and the robust nature of their offering.” He told Bloomberg the investment “enables State Street to actively participate in developing industry/regulatory standards for reporting and administration of digital assets.”