FinTech: Digital Lending Startup BlockFi Raises $30 Million Series B

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BlockFi’s latest funding round was led by Valar Ventures, a Peter Thiel-backed venture fund.

BlockFi Inc. provides consumer financing services. Its platform offers loans to crypto-asset owners who collateralize the loan with their crypto-assets. On the other hand, its BlockFi Interest Account (BIA) lets depositors put their crypto to work and earn monthly interest payments in the asset-type that deposited with BlockFi. The company raised $30 million in its Series ‘B’ funding round, led by Valar Ventures. (Bloomberg)

Other participating investors included Morgan Creek Digital, PJC, Akuna Capital, CMT Digital, Avon Ventures, Castle Island Ventures, Purple Arch Ventures, Kenetic Capital, Winklevoss Capital, Arrington XRP Capital, and Hong Kong-based HashKey Capital, according to a statement by BlockFi.

BlockFi had garnered $18.3 million in its ‘A’ series barely six months ago.

“We decided to opportunistically raise the Series B to expand the balance sheet and give ourselves the ability to invest in the things we’re doing this year,” BlockFi CEO Zac Prince said in an interview with Coindesk.

The BlockFi platform is growing rapidly

The company commenced its lending operations in January 2018. It already boasts of $650 million in assets on the platform. It claims a 0% loss rate in its entire loan portfolio since inception.

BlockFi grew revenues by 20 times in just 2019 alone.  That’s no surprise, considering it offers an interest yield of up to 8.6% annually on its crypto-based interest accounts. It also offers loans against crypto assets up to a value of 50% of their value, and zero-fee trading.

According to Coindesk, BlockFi has had to cut its interest rates on occasions because borrower supply has not been able to meet depositor demand.

Meanwhile, it already has won more than 50 highly reputed institutional crypto clients.

Plans for the retail investor

However, BlockFi appears determined to boost participation by everyday investors too.

“For most people, cryptocurrencies are something out of speculative fiction. Adoption of these assets is limited by the average consumer’s ability to understand how to use them,” said Flori Marquez, VP of Operations and Co-Founder. “We’ve demonstrated that we can build financial products around cryptocurrency that can look and feel like the apps you already have on your phone, and we’re well-positioned to drive mainstream adoption.”

BlockFi said it intends to use the money raised in the B round to expand its products. While doing this, it will focus on “a mainstream audience.”

However, its first priority is the development of a mobile app.

Meanwhile, a BlockFi spokesperson told Cointelegraph that the company also intends to launch “the world’s first-ever crypto-rewards credit card.”

It also intends to be able to send fiat wire transfers and by Q2 of 2020, to offer Automated Clearing House (ACH) payments.

Related Story:   FinTech: Digital Lending Platform LendUp Notches Up $2B in Loans                                                

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