Chainalysis has recently concluded a very successful series B funding round where they raised $30 million which was headed by Accel, a VC firm and also saw investments from Benchmark, who had been involved in their previous series A funding.
With the newly-raised funds, Chainalysis intends to expand on its base in the United Kingdom. They will do that by opening a research-and-development lab as well as a London office. Since their foray into the UK, they have seen significant success which includes a partnership with Barclays Bank. Their success at fundraising is also impressive as it comes just a few months after the crash in cryptocurrency value. This, Michael Gronager, CEO and co-founder of Chainalysis, says, is indicative of the confidence that investors still have in the blockchain industry.
“The investment and the timing of it shows that, despite fluctuating prices, there is quite a strong conviction among some very big VCs that this is not a short term play,” he says.
Touching more on their focus on London, the CEO says that London is well on its way to becoming a major fintech hub, despite the worries that exist due to Brexit. In light of this, the firm also intends to collaborate with a number of universities in London and it has been stated that the firm doesn’t plan to play favorites.
“We haven’t chosen a side there. So we are happy to work with everyone,” says Gronager.
Collaborating with other institutions has certainly helped Chainalysis so far as their collaborating with Barclays Bank has led to them getting more offers fork banking institutions both inside and outside of the UK.
“There are bigger banks outside of the U.K. that want to enter banking relationships with crypto exchanges, essentially following the same procedure as Barclays.”
The Stablecoin Dilemma
One controversial Investment that Chainalysis has made in recent times is in stablecoins which have repeatedly come under fire for possibly being price manipulation tools.
In 2018, Chainalysis launched their real-time AML software Chainalysis KYT (“Know Your Transaction”) which initially was limited to cryptos but will now expand to accommodate stablecoins as well.
Gronager acknowledges the lack of trust that surrounds stablecoins and says that Chainalysis is working towards showing regulators that they can be overseen.
“The anticipation is this will create a lighter touch on how to regulate these,” he says. “So that as well as being able to use them for settling between crypto exchanges, they can be used for transferring funds across the world.”