Crypto Custodian Fireblocks Raises $550M at $8B Valuation

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Fireblocks co-founders (left to right): Idan Ofrat, CTO; Michael Shaulov CEO; Pavel Berengoltz, Vice President R&D

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The unprecedented influx of institutional capital into crypto last year elevated cryptocurrency custodian Fireblocks to unicorn status. Backed by 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 in assets digital per month nabbed a $2 billion valuation, raising $310 million in Series D funding.

Today, the blockchain company is valued at $8 billion from a $550 million Series E venture round, co-led by D1 Capital Partners and Spark Capital, with participation from General Atlantic. , Index Ventures, Mammoth, CapitalG (an independent Alphabet growth fund), and Altimeter among others.

Notably, Fireblocks had continued to raise capital even as crypto and equity markets plunged amid concerns over the impending Fed interest rate hike. According to CEO and co-founder Michael Shaulov, the fundraising, first reported in December at $400 million, closed just a week ago.

With the new capital, Fireblocks plans to “invest heavily in innovation for DeFi, NFTs, and payments,” including possible acquisitions, Shaulov says. Earlier this month, Fireblocks became the first whitelister for Aave Arc, a licensed version of popular DeFi lending platform Aave, where all participating institutions must undergo Know Your Customer (KYC) verification. In this role, Fireblocks performs due diligence on institutions seeking to lend or borrow crypto assets through the platform.

Additionally, the funds are expected to help the firm “catch up” to its rapidly growing customer base, which has grown from 150 to 800 institutional clients in the space of a year. Notable ones include 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 raised $45 billion in deposits.

Its custody offering is known for using a new form of wallet security called multiparty computing (MPC). With MPC, private keys no longer need to be stored in one place, eliminating a problem called “single point of compromise”. Instead, the private key is divided into shares and distributed among several parties, who will each calculate their share of the key without revealing their private data.

The company claims to offer support for 1,000 cryptocurrencies on over 20 blockchains. Just a few days ago, it also added support for Solana, the Ethereum competitor touted as one of the fastest so-called layer 1 blockchains. “There are quite a few other projects we’re looking to support from a roadmap perspective,” Shaulov noted, naming NEAR and Tron as possible additions.

Last year, the company partnered with payments platform First Digital Assets Group to build the infrastructure that could allow financial institutions to connect to Diem, Meta’s poorly known cryptocurrency project that initially sought create a digital coin backed by a basket of fiat currencies. Those efforts failed to materialize in any meaningful way, Shalov explained, largely because of the setbacks Diem faced. The Diem Association, the Meta (formerly Facebook) consortium founded to oversee the initiative, is said to be pulling out and selling its technology for around $200 million.

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