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Blockchain lands $3 billion valuation after $120 million fundraising

Robert Hackett
·3 min read

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Blockchain.com, a London-based cryptocurrency firm, has taken on $120 million in new venture capital funding. The deal raises the company's private valuation to more than $3 billion, including the money raised, a source close to the company tells Fortune.

Blockchain's fundraising comes as the price of Bitcoin reaches an all-time high above $50,000. The resurgence in cryptocurrency interest comes as big-time hedge funders, like Stanley Druckenmiller and Paul Tudor Jones, seek inflation hedging investments in the form of "digital gold" and as companies ranging from [hotlink]Tesla[/hotlink] to [hotlink]Bank of New York[/hotlink] Mellon warm up to the historically volatile asset.

Investors in the latest funding round include existing backers Alphabet's GV, formerly known as Google Ventures, and Lightspeed, known for placing early bets on [hotlink]Dropbox[/hotlink] and Snap. Blockchain has raised a total of $190 million in venture capital since its founding in 2012.

"There's probably never been more uncertainty in the global macro [economic environment] than today," says Peter Smith, Blockchain's chief executive since 2014. "It's the perfect time for crypto" like Bitcoin, which presents an alternative investment divorced from the policies of governments, many of which are now spending immense sums on pandemic relief.

Many of the investors participating in Blockchain's latest funding round are drawn from the macro finance world, where they make trades based on overarching, global economic conditions. Some of those include Moore Strategic Ventures, hedge fund manager J. Kyle Bass, Access Industries, Rovida Advisors, Lakestar, Eldridge, and more.

Smith said Blockchain did not need to raise money but decided to make a deal in the interest of furthering its institutional business, which caters to more sophisticated financiers. That arm of Blockchain offers cryptocurrency trading, lending, borrowing, and custody.

"It's easy for macro funds to just buy some Bitcoin because they can sell it anytime," Smith says. But the investment in Blockchain is significant, he contends, because these investors "took positions in illiquid stock at a high price," meaning they're "endorsing the future of crypto."

"It isn't a trade, it's an investment," Smith said.

Asked whether an initial public offering might be on the horizon, Smith added that he will be "examining all strategic options" with the company's board.

Blockchain, founded in 2011, last raised about $40 million in June 2017 at a $280 million private valuation, not including the money raised. The latest fundraising, disclosed by the company on Wednesday, multiplies its past appraisal by almost 10 times.

Blockchain, which also offers a cryptocurrency exchange and digital wallets to consumers, is tapping into the resurgent crypto zeitgeist. While Bitcoin started as a retail investor phenomenon, more big companies, like PayPal, and corporate leaders, like Elon Musk, have been driving the recent bull run.

"More than ever before, crypto begins to seem like the real Robin Hood of finance," Smith wrote in a blog post announcing the funding news. "It’s time to build a financial system for the Internet."

Blockchain's earliest founder, Ben Reeves, originally teamed up with Brian Armstrong, cofounder of Coinbase, America's biggest cryptocurrency exchange, on a venture for the Silicon Valley startup accelerator Y Combinator. The two parted ways after a falling-out.

Coinbase is now said to be eyeing a direct listing on the Nasdaq stock market at a $77 billion valuation.

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This story was originally featured on Fortune.com