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Goldman Sachs and Barclays have joined a $70 million Series A investment round for Elwood Technologies, the institutional crypto trading platform founded by billionaire British hedge fund manager Alan Howard.
The Financial Times reported on Sunday that crypto-friendly German bank Commerzbank, crypto investment management Galaxy Digital, and Dawn Capital had joined the round. According to the article, the company was valued at roughly $500 million during the fundraising round.
Despite the recent decline in cryptocurrency markets, Elwood believes traditional financial institutions such as hedge funds and banks will continue to be interested in investing in cryptocurrencies. Elwood's investment round was already agreed to and in the works before the latest price collapse, which has seen the whole crypto market valuation decrease by nearly 15% since May 9, according to CoinMarketCap.
Elwood Technologies CEO James Stickland described the fundraising as "another evidence of crypto's endurance," dismissing recent price declines:
"We're getting money from financial institutions who aren't expecting huge returns in 15 minutes." They're spending in infrastructure, which I believe is a statement of assurance."
Elwood Technologies offers institutional investors a crypto portfolio management solution that includes crypto market data and trading infrastructure, as well as an interface that interfaces to crypto exchanges, liquidity providers, and custodians.
Goldman Sachs' global head of digital assets Mathew McDermott commented on the transaction, saying that it demonstrated the firm's "continuing commitment" to cryptocurrencies, adding:
"As institutional demand for cryptocurrencies grows, we've been working hard to expand our market presence and capabilities to meet customer demand."
Goldman Sachs' investment signifies the bank's further foray into digital assets. In early May, the investment bank was the first to provide cryptocurrency exchange Coinbase a loan secured by Bitcoin (BTC). It has long been interested in the area, and in March referred to digital assets and the Metaverse as "megatrends."
A meeting between Goldman CEO David Solomon and FTX CEO Sam Bankman-Fried, which included Solomon's offer to assist FTX with future funding rounds and regulatory compliance, was another example of the Wall Street titan cozying up to crypto businesses.
Alan Howard, who was the primary investor before the Series A investment, will retain a majority stake in Elwood Technologies. In September 2021, Howard co-founded the hedge fund Brevan Howard, which started its crypto investing section BH Digital.
