Unchained Capital Secures $60M in Funding for Bitcoin-Based Financial Services

Unchained Capital announced on Tuesday that it has successfully closed a Series B funding round, raising $60 million. The funding round was led by Valor Equity Partners and included participation from NYDIG, a major player in the crypto asset management industry, according to a press release.

According to a source familiar with the matter, the funding round was launched to investors in the first quarter of this year and had its initial close in April, with more than half of the total funds raised. The newly acquired capital will be allocated towards expanding the client base, enhancing the current suite of products, and diversifying the range of product offerings.

Despite the challenging crypto bear market, which is only just starting to show signs of improvement in the first third of 2023, Unchained Capital has managed to secure a significant amount of funding. This is particularly noteworthy considering that Unchained had to make some difficult decisions during the crypto winter, such as reducing its workforce by 15% in mid-November 2022.

Unchained, based in Austin, Texas, provides a collaborative custody solution that allows users to share control of their Bitcoin. The user holds one private key, while Unchained and other financial services providers hold additional private keys. This model leverages Bitcoin's multisignature capabilities, offering the advantages of self-custody without the risks of a single point of failure, such as losing or having a key stolen. Unchained cannot move or use client funds independently, which is a feature that contributed to the downfall of crypto exchange FTX. According to the company, Unchained currently secures over $2 billion in Bitcoin across thousands of keys.

In addition to its collaborative custody solution, Unchained provides bitcoin-collateralized loans and has originated more than $500 million worth of such loans since 2017. Unchained also operates a trading desk, which allows clients to buy Bitcoin directly, and an IRA offering.

“In the midst of market chaos, Unchained has emerged as a highly trusted provider of bitcoin custody and financial services through superior technology, risk management, regulatory compliance, and client service,” said Valor partner Vivek Pattipati, who will be joining the Unchained board of directors. “Particularly in lending, the company has differentiated itself by minimizing risk to both the lender and the borrower, leading to resilience and an extraordinary opportunity to capture market share."

Trammell Venture Partners, Ecliptic Capital, and Highland Capital Partners were among the other investors who participated in the funding round. Notably, NYDIG had also co-led Unchained Capital's previous Series A funding round, which raised $25 million in June 2021.

Source Coindesk