Thiel-Backed Valar Among Latest BlockFi Financing Participants

(Bloomberg) -- BlockFi Inc., a financial services firm focused on cryptocurrencies, raised $50 million. Morgan Creek Digital was the lead investor in the funding, which included an infusion from Peter Thiel-backed Valar Ventures.

It’s the company’s third series C funding round in the past year, during which revenue increased 10-fold. CMT Digital, Castle Island Ventures, Winklevoss Capital, and the Cleveland Cavaliers’s Matthew Dellavedova, among others, also participated. Two university endowments took part, though the company declined to name them.

BlockFi now has roughly 50,000 funded accounts with over $1.5 billion in assets on its platform, according Zac Prince, the firm’s co-founder and chief executive officer.

“We’ve grown more in the last five months, six months than we ever have before as a company,” Prince said by phone. “We’re hitting a new level of momentum.”

The Jersey City, New Jersey-based firm, which offers a number of financial products including crypto-based interest accounts, will use the proceeds to expand its suite of offerings, among other things. It’s planning a limited release of a Bitcoin rewards-based credit card toward the end of the year, with an expansion in 2021.

A few factors have allowed the company to grow in recent months, according to Prince. First, crypto has benefited from increased interest by locked-down traders, similarly to the explosive growth seen by online brokerages. Second, assets that are promoted as stores of value are doing well amid massive central bank intervention, with cryptocurrencies becoming part of that conversation. The third is BlockFi’s desire to continue to grow despite the pandemic, he said.

“We very quickly in the middle of March took a position as a company that we were not going to participate in a recession, if this was one,” said Prince. “Our clients and people who might become our clients are going to need our products and services more than ever, so we didn’t slow down on anything that we were doing in terms of product development, in terms of growing the team.”

At the start of the year, BlockFi had between 75 to 100 employees. That number has swelled to 175, a trend playing out among many other crypto firms. The company has also announced a string of new hires, including Wittney Rachlin, formerly of American Express and Prudential Financial; Adam Healy, who has spent time with the crypto futures platform Bakkt and Palantir; and Jonathan Mayers, who previously worked at Renaissance Technologies and Deutsche Bank.

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