BlockFi lands a $350M Series D at a $3B valuation for its fast-growing crypto-lending platform

Prince describes BlockFi as a financial services company for crypto market investors that offers a retail and institutional-facing suite of products. On the retail side of its platform, people can use its mobile app to earn a yield on their crypto holdings (6% on Bitcoin, 8.6% on stablecoins), buy and sell crypto and get low-cost loans secured by the value of their crypto portfolio “so they can get liquidity without selling,” he said. Specifically, clients can buy and sell digital assets (from Bitcoin, Ethereum and Link to Litecoin, PaxG and multiple stablecoins) directly on BlockFi.

The startup is also a lender and provider of trade execution services to institutions participating in digital asset markets.

It’s a model that seems to be working in a big way. Since the end of 2019, BlockFi has seen its client base grow from 10,000 to more than 225,000. Today, BlockFi has 265,000 funded retail clients and over 200 institutional clients.

And it’s lent over $10 billion to its retail, corporate and institutional clients.

Over the past year, BlockFi has also accomplished the following:

• Increased the number of assets on its platform to $15 billion, compared to $1 billion last March — with a 0% loss rate across its lending portfolio since inception.
• Bumped its monthly revenue to over $50 million, up from $1.5 million a year prior.
• Boosted its headcount to about 530 people, compared to 100 last March.

“In less than six months since we completed our Series C, Bitcoin and other digital assets have assumed a central role in many investors’ portfolios and in broader financial markets,” Prince said. “Our conviction that digital assets are the future of finance has been vindicated by our client base, which grew 10 times year over year in 2020 and has more than doubled since the end of 2020.”

New investor Bain Capital Ventures, partners of DST Global, Pomp Investments and Tiger Global co-led the Series D, which included participation from a slew of other firms including existing backer Valar Ventures, Breyer Capital, Susquehanna Government Products, Jump Capital and Paradigm, among many others. BlockFi employees who have been employed for more than one year have the opportunity to receive liquidity on a portion of their equity via a secondary tender offer as part of the financing round.

BlockFi believes that investor enthusiasm for the Series D round reflects both the company’s strong business growth, as well as “broader conviction in cryptocurrencies as an asset class.”

“Individual investors, institutional asset managers and corporate treasury departments are all exploring avenues to invest in cryptocurrencies,” the company said.

“Our goal for BlockFi has always been for it to facilitate cryptocurrencies going mainstream – and each day provides more evidence that is exactly what is occurring,” said Marquez, who serves as the company’s SVP of operations.

Bain Capital Ventures Partner Stefan Cohen agrees. He believes there are currently limited banking services available for crypto holders, which puts BlockFi in an opportune position.

“Bitcoin has already eclipsed $1 trillion in market cap and is likely headed higher to fulfill its store of value promise. As wealth accumulates to BTC holders, most will look for ways to earn yield or borrow against their holdings for more traditional asset purchases such as homes, cars and education,” he wrote via email. “BlockFi stands alone as the leader in bringing simple, secure, everydayfinancial services to cryptocurrency holders.”

The startup’s exponential growth over the past year proves “there was clearly a huge need for BlockFi’s services,” Cohen said.

“Their vision was to build an easy-to-use, trusted platform to bring cryptocurrency to the mainstream, and they’ve truly succeeded,” he added.

Meanwhile, Cohen said Bain Capital has had a long-term thesis on Bitcoin becoming a store of value and has actively invested in “picks-and-shovels businesses” that enable what is now a $1 trillion-plus market.

“Trusted financial services are a critical pillar of the space, and we view it as a highly strategic component of the market,” he added.

Looking ahead, the startup has plans to launch in the second quarter a Bitcoin Rewards Credit Card, which will give BlockFi clients the ability to earn Bitcoin cash back on every transaction. It plans to use the new capital to continue growing its product suite, expand into new global markets and for strategic acquisitions. The company also plans to double its headcount by year’s end, according to Prince.

BlockFi already has a global presence and retail clients in over 100 countries. Last year, it opened institutional client service offices in London and Singapore. This year, the startup is looking to add regional support in Europe, APAC and LatAm for its retail clients.

Over the past week, BlockFi was making headlines for other reasons. The company was the victim of an “unusual assault” on March 7 when an attacker spammed the platform with fake sign-ups and abusive language.

To that end, the company acknowledges that it became aware that an unauthorized third party began attempting bulk sign-ups on its platform on March 7.

“We do not know the origin of the email addresses used for these ‘sign-ups’ but they did not come from us and they were not the emails of BlockFi clients,” the company told TechCrunch. “In general, we would characterize the event as vulgar spam’ and the total number of valid emails affected was less than 1,000.”

The company maintains that no data from BlockFi was accessed and its data was not compromised.

“Our clients’ funds and data were safeguarded throughout the incident,” the company added. “Since then, our engineering and security teams have taken steps to prevent events like this from happening in the future. In addition, we reached out directly to all of the valid email recipients to apologize for the incident.”