Business 19 October 2018Ed Drake
BitGo raises $59M in Goldman Sachs-led Series B funding
Investment giant Goldman Sachs has led a successful $59 million Series B funding round in crypto custodian service BitGo, in the latest example of a major Wall Street institutional investor backing the cryptocurrency sector.
With the conclusion of the funding round this week, the latest round of funding takes the total backing for the firm to $70 million.
Goldman Sachs are joined by Galaxy Digital Ventures, the fund founded by prolific cryptocurrency investor Mike Novogratz, in backing the firm, with $15 million contributed to the total between them, Bloomberg first reported.
BitGo founder Mike Belshe said that the challenge for the firm remained convincing investors of the merits of cryptocurrency as an investment asset class. He said, “If you were investing in any other asset class, you’re probably not worried about the asset just disappearing—but this one, people still have that fear…we’ve got to conquer that.”
BitGo was founded back in 2013, and manages as much as $2 billion in assets across 95 cryptocurrencies. Following recent regulatory approval from regulators in the South Dakota Division of Banking, the firm has become the first regulated crypto custodian of its kind.
The backing of high profile names like Goldman Sachs and Galaxy Digital Ventures will lend even more credibility to the startup, as it looks to increase its assets under custody,
Managing Direct of Principal Strategic Investments at Goldman, Rana Yared, said institutional investors required secure and regulated custody before considering investing in crypto assets: “Greater institutional participation in the digital asset markets requires secure and regulated custody solutions.”
“We are impressed by BitGo’s product, unique services, and the management team. We view our investment in BitGo as an exciting opportunity to contribute to the evolution of this critical market infrastructure,” Yared said.
The investment comes at a time of increasing activity in the crypto custody space, including from legacy financial firms looking to diversify into this emerging market.
Fidelity Investments, which manages assets worth $7.2 trillion, has recently announced the launch of a new company to provide crypto custody services, while Goldman Sachs themselves are reported to be considering custody products. The BitGo funding comes as another solid vote of confidence in the cryptocurrency sector from major banking and financial institutions.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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