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Extreme market volatility for assets like Bitcoin and Ether hasn’t stopped venture capital from pouring billions into blockchain businesses.
Digital asset custody platform Fireblocks has raised $550 million in Series E funding to become one of the blockchain industry’s most valuable companies, underscoring heightened institutional appetite for cryptocurrency products despite extreme price volatility.
The investment round was co-led by venture firms D1 Capital Partners and Spark Capital, with participation from Parafi Growth Fund, Canapi Ventures, Altimeter, General Atlantic, Index Ventures, Mammoth, CapitalG and Iconiq Strategic Partners.
Since launching in 2019, Fireblocks has raised a cumulative $799 million from some of blockchain’s leading venture firms. As Cointelegraph reported, the company secured $310 million in a Series D funding round that concluded in July 2021. That followed a successful Series C funding round in March of the same year that was valued at $133 million.
The successive funding rounds have helped Fireblocks expand its service offerings to over 800 institutional clients, including Bank of New York Mellon, Revolut, Galaxy Digital, Crypto.com, BlockFi, SwissBorg, CoinShares, eToro and Three Arrows Capital. As an infrastructure provider, Fireblocks works with crypto exchanges, lenders and other financial institutions to secure, transfer and issue digital assets.
Fireblocks has prioritized the use of multi-party computation, also known as MPC, in providing custody and infrastructure solutions to secure digital assets. When asked about the importance of MPC and why it is utilized so heavily by Fireblocks, CEO Michael Shaulov told Cointelegraph that "MPC removes the single point of compromise without inhibiting the operational arm of the business that is responsible for driving growth." He further explained:
"When it comes to custody, customers want to wake up in the morning knowing their assets are still there. Security in the digital asset space has evolved over the last few years to provide better control and better transparency — that’s why most of us are using multi-party computation today."
Fireblocks' $550 million raise is one of the largest the crypto industry has ever seen in a single funding round. Venture capital firms have poured billions of dollars into blockchain-focused startups over the past 12 months. Funding is showing no signs of slowing despite multiple steep selloffs in crypto prices, as demonstrated by Bitcoin’s (BTC) recent tumble below $34,000.
Venture capital flows into the crypto sector reflect a growing belief that digital assets will continue to disrupt traditional finance. As a result, dozens of crypto startups have been crowned “unicorns” over the past year — a term that describes early-stage companies with a valuation of $1 billion or more.
Shaulov told Cointelegraph that VC investors recognize "we are still early in this transition and transformation." Despite the speculative nature of some crypto markets, most of the technology-driven investors are supporting "non-speculative developments," such as cross-border remittances, tokenized securities, GameFi, nonfungible tokens and other emerging crypto verticals. With respect to Fireblocks, DeFi alone currently represents 25% of its business, according to Shaulov.
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