After $4M Funding Round, BlockFi Eyes Savings Account, Crypto Credit Cards
https://bitcoinmagazine.com/articles/blockfi-gives-hodlers-another-option-borrow-against-crypto-assets/, the New York-based startup that provides crypto collateralized loans, has raised additional funds to expand its services. The startup announced that it has received an additional $4 million in its recent funding round in a company blog post.
The recently revealed funding round comes some months after the company raised $52.5 million in a round led by Galaxy Digital, including $1.55 million in funding from ConsenSys Ventures and PJC prior.
Akuna Capital led today's funding round, with participation from other investors, including Digital Galaxy Ventures, Susquehanna Government Products, Morgan Creek Digital and others.
The startup, who recently expanded overseas, says the funding would be used to grow its workforce and launch exciting new products, including a crypto savings account that earns interest and crypto-backed credit cards.
Zac Prince, BlockFi CEO, spoke with Bitcoin Magazine, on the funding and the new product lines.
He said the company plans to launch two separate credit cards. One would be similar to a prepaid card, where users will be able to spend funds that they receive from taking out a crypto-backed loan from BlockFi’s platform.
“[The first] is like a debit or prepaid card where users can receive and spend loan proceeds from BlockFi. The amount they have access to will vary based on the amount of crypto they hold with BlockFi — similar to how our loans work now.”
The other would be an unsecured card with a credit line.
"Think of it like the Amex card, except that instead of cash back or airline miles — you would receive Bitcoin rewards," he said. Both cards would be available in selected locations where BlockFi operates, though the firm has yet to choose a credit card company partner.
For the savings account, BlockFi would be using Gemini’s custody solution, which is the solution it uses currently for holding the cryptocurrency collateral for its loans. The company hasn't decided on the exact interest rate, but Prince said it would be higher than the interests that accrue on a traditional bank-held savings account.
For Prince, the funding is a testament to BlockFi's growth. Despite a gloomy market that has seen trade volumes drop and prices fall, BlockFi has continued to improve its business on all fronts, he claims.
"We have continued to grow all of our core metrics rapidly despite the bear market. We continue to operate with a long-term outlook and thoughtful approach — that generates confidence and trust from our investors and clients," he remarked enthusiastically.