BlockFi, a startup based in New York which offers loans to owners of virtual currencies using their ether (ETH) and bitcoin (BTC) digital coins as collateral has received $1.55 million in funding from firms such as Lumenary, Purple Arch Ventures, SoFi, PJC, Kenetic Capital and ConsenSys Ventures. The New York-based startup intends to use to capital injected in bridging the gap that exists between the cryptoasset ecosystem and traditional lending markets.
“By bringing institutional quality technology infrastructure, data science, risk management and operations to the cryptoasset market, we aim to be the leading lender in the cryptoasset market and a leading provider of low cost credit globally,” the founder and chief executive officer of BlockFi, Zac Prince, said.
Being a secured lender, BlockFi holds the cryptoassets of a client with a custodian who is registered and then issues the loans in U.S. dollars to the bank accounts of customers. The startup is at the moment in beta launch and is lending in a total of 35 states in the U.S. BlockFi lends not just to individuals but also to institutions and companies. And just like traditional lenders BlockFi transmits a client’s loan performance data to major credit bureaus and this can serve to vouch for an individual if they generate good credit scores.
Currently the market for cryptoassets is growing at an exponential rate and in the last one tear has reached a total market capitalization of more than $400 billion from $10 billion.
Before founding BlockFi, Prince had started a lending platform geared towards the underbanked known as Cognical. In most of the startups or projects that BlockVentures invests in the VC firm takes particular interest in those blockchain projects which possess environmental and social inclinations. The VC firm also has a particular affinity for startups that have seasoned entrepreneurs as their leaders.
At the moment ConsenSys Ventures has a fund worth $50 million and is led by Kavita Gupta, an investment specialist and the 2015 recipient of UN Social Finance Innovator Award. Besides BlockFi other startups that ConsenSys Ventures has invested in in the blockchain space include sweepstakes firm Pryze and esports betting firm Unikm.