The unprecedented influx of institutional capital into crypto last year elevated cryptocurrency custodian Fireblocks to the ranks of unicorns. Backed by the likes of BNY Mellon, Sequoia Capital and Coatue, in July the New York-based startup, which helps exchanges, trading desks, banks and hedge funds issue, store and move about $215 billion worth of digital assets a month, nabbed a $2 billion valuation, raising $310 million in Series D funding.
Today, the blockchain firm is being valued at $8 billion on the back of a $550 million Series E venture capital round, co-led by D1 Capital Partners and Spark Capital, with participation from General Atlantic, Index Ventures, Mammoth, CapitalG (Alphabet’s independent growth fund), and Altimeter among others.
Notably, Fireblocks had continued to raise capital even as crypto and equity markets were plunging amid concerns over the Fed’s imminent interest rate hike. According to CEO and co-founder Michael Shaulov, the fundraise, first reported in December at $400 million, closed only a week ago.
With the fresh capital, Fireblocks is planning to “heavily invest in innovation for DeFi, NFTs and payments,” including possible acquisitions, says Shaulov. Earlier this month, Fireblocks became the first whitelister for Aave Arc, a permissioned version of the popular DeFi lending platform Aave, where all participating institutions are required to undergo Know Your Customer (KYC) verification. In this role, Fireblocks runs due diligence on institutions that are looking to lend or borrow crypto assets through the platform.
Additionally, the funds should help the company “catch up” with its rapidly growing client base, which went from 150 to 800 institutional customers in the span of a year. Among the most notable are BNYMellon, Revolut, Galaxy Digital, Crypto.com, BlockFi and eToro. Since its inception in 2018, Fireblocks’ platform has transferred over $2 trillion in digital assets and amassed $45 billion in custody.
Its custodial offering is known for the use of a novel form of wallet security called multi-party computation (MPC). With MPC, private keys no longer need to be stored in one single place, eliminating an issue referred to as a “single point of compromise.” Instead, the private key gets broken up into shares and split among multiple parties, who will each compute their part of the key without revealing their private data.
The company claims to offer support for 1,000 cryptocurrencies across more than 20 blockchains. Just a few days ago, it also added support for Solana, Ethereum competitor billed as one of the fastest so-called Layer 1 blockchains. “There are quite a few other projects we are looking to support from a roadmap standpoint,” Shaulov noted, naming NEAR and Tron as possible additions.
Last year, the firm partnered with payments platform First Digital Assets Group to build the infrastructure that could enable financial institutions to plug into Diem, Meta’s ill-known cryptocurrency project that initially sought to create a digital coin backed by a basket of fiat currencies. Those efforts have not meaningfully materialized, Shaulov shared,—largely due to the setbacks Diem has faced. The Diem Association, the consortium Meta (formerly Facebook) founded to oversee the initiative, is reportedly winding down and selling its technology for about $200 million.