There is something to cheer about for the digital currency community. BlockFi, a startup of crypto-lending, disclosed that it was able to finalize a $52.5 million funding round. Galaxy Digital firm of Mike Novogratz was the biggest contributor to the funding of the firm. The timing of the news is tricky as the fundraising exercise appears to be not an easy task due to the failure of a number of startup firms.
Offer of Loans
A few months ago, Zac Prince, an SVP in Cognical, has launched the New York-based BlockFi that is having plans to provide loans to both at retail, as well as, institutional level clients. The borrower will have to offer cryptocurrencies such as bitcoin or ethereum as collateral securities for getting loans. Early this year, the company raised $1.55 million from not only ConsenSys but also from other interested enterprises in a small round of funding exercise. Currently, the company intends to provide its service in the United States covering 35 States.
The company is keen to make sure that there is a limited risk of losing consumer funds as it preferred the loan route. Gemini platform, which is fully licensed one, will take care of the custodial service of the deposited digital currencies. Interestingly, possible borrowers could take a maximum loan of about $10 million through the existing platform, ethereumworldnews.com reported. With the help of new funds, the company plans to widen its base by reaching out to new States apart from global markets.
BlockFi indicated that it would not only launch new products but would also extend its support to other digital currencies. In addition to that, the company believes that credit cards, debt investments, and fixed income would be the focus in the near term. In 2013, Novogratz entered the cryptocurrency market quietly by infusing $7 million of his bitcoin funds. At that point in time, it was just about $100 and has grown his holdings immensely since then.
Similarly, he has made big investments in the initial phase of ethereum and made $250 million from that investment. If rumors are true, then he is holding about ten percent of his complete net worth in digital coins alone. When bitcoin price hit its lifetime high of nearly $20,000 in December last year, he established Galaxy Digital. BlockFi marked another virtual currency-associated firm that Novogratz has endorsed even as his firm is investing funds on other crypto-associated and blockchain-related startups.
Novogratz commented, “A robust lending market is a keystone for financial systems and BlockFi’s institutional approach, and deep lending expertise were key drivers in our decision to partner with them.” His firm has invested $35 million in June on High Fidelity, which is a virtual-reality firm. This apart, he has invested $15 million in AlphaPoint.
The investment team of Galaxy has been engaged in acquiring big stakes in initial coin offering (ICO) providing projects. Significantly, its focus was on the initial phase of crypto ventures where it has invested substantial amount. The company is clear that it will keep investing in any promising startups.