Forbes Exclusive: Chainalysis, a well-known bitcoin research agency, has received $100 million in financing
A new bitcoin industry unicorn is on the horizon, and after days of rumors swirling around the cryptocurrency industry, research firm Chainalysis has exclusively confirmed to Forbes that it expects to raise as soon as next week at a $1 billion valuation $100 million in venture capital. The Series C round, led by Tiger Global alumnus Lee Fixel’s newly formed VC firm Addition, is expected to include participation from previous investors Accel, Benchmark and Ribbit.
Forbes estimates its 2018 revenue at $8 million, although Chainalysis CEO and co-founder Michael Gronager declined to disclose the company’s actual revenue, which Gronager said has grown by about 96 percent over the past year. With revenue expected to double next year and into 2022, the investment is further evidence that there is more to bitcoin than just buying low and selling high.
In addition to helping the U.S. Department of Justice track down more than $1 billion worth of bitcoin and other cryptocurrencies seized earlier this month, Chainalysis now has 350 clients, including state governments and private institutions.
With Bitcoin recently reaching a nearly three-year high of $18,600, Chainalysis and its philosophy of code compliance are becoming emblematic of the hurdles investors must overcome to gain exposure to alternative assets, and for those investors to face. "We've shown that by making data available in the encrypted space, you can build a world-class enterprise software services company and actually own the data encrypted," said Gronager, 50.
The Series C round, signed off by all parties, is awaiting final paperwork, adding to the Series B round four months ago, bringing the total investment to $166 million. As part of the investment, the company, which currently employs 200 people, plans to nearly double its workforce over the next year, which includes hiring for international policy, sales and marketing, and research and development. Last July, Forbes named Chainalysis the first cryptocurrency company on its Billion Dollar Startups list. Co-founder Jonathan Levin is one of Forbes Europe's 30 Under 30.
Currently, the company has offices in New York, Singapore and Tokyo, and as Covid restrictions are expected to lift, the company plans to expand its international operations as well as in the District of Columbia, where regulatory demands in the United States are at their peak. In fact, demand has reached such a level that in July, US President Trump’s former sanctions chief, Sigal Mandelker, joined Chainalysis’ advisory board as part of its Series B funding round.
But on top of that, the company said it raised significantly more money than a Series B because it wanted the opportunity to acquire another company. Gronager said: “We think the timing, the market and the maturity of the crypto space will provide some consolidation, with potentially some growth.
250 of Chainalysis' clients are in the private sector, including companies such as payments giant Square, while the remaining 100 clients are in the public sector in 30 jurisdictions, including the IRS. Chainalysis has seen a 65% increase in total clients over the past year. While most startups don’t grow at 40% or more, Chainalysis’s current cash burn is “basically non-existent,” Gronager said, and the company is expected to turn profitable soon. "We want the company to be extremely low burn and extremely efficient," Gronager said, "so we're almost on the verge of profitability today."
Of course, the fact that Chainalysis, a security company that helps identify cryptocurrency user fraud, XI money, and other illegal and illicit practices, was one of the industry's first unicorns is further evidence of why so many institutional investors still don't Willing to put your own money in it. Although some high-profile companies, including JP Morgan and Citibank have also recently stepped into Bitcoin. In a statement, lead investor Lee Fixel described Chainalysis as “the financial regulatory platform for the future of digital assets.”
Also today, Chainalysis published a report calling 2020 the year of institutional adoption for Bitcoin, specifically citing hedge fund manager Paul Tudor Jones and Square. Earlier this week, the DeVere Group, a prominent financial advisor, said that 73% of some 7 million millionaire clients who responded to a cryptocurrency survey said they had already invested in cryptocurrencies or would invest in them. Invest in 2023, a 68% increase compared to last year.
“As more and more mainstream players, such as Paypal, begin offering crypto services,” Philippe Botteri, partner at Accel and investor in analytics firm Chainalysis, said in a statement, “we expect greater acceleration ahead. "
A growing number of security companies, such as Russia-based Chainalysis, Elliptic, and the upstart Clain, are not only helping to identify crimes after the fact, but also helping to prevent them.
The original text comes from the English version of Forbes, compiled by Blockchain Knight, the English copyright belongs to the original author, please contact the compiler for Chinese reprint.
The original text comes from the English version of Forbes, compiled by Blockchain Knight, the English copyright belongs to the original author, please contact the compiler for Chinese reprint.
