Chainalysis, a blockchain analytics company, announced on Friday that it closed with $ 100 million in Series D financing, doubling its valuation to more than $ 2 billion.
The round comes just four months after the company secured a $ 100 million Series C round with a $ 1 billion valuation. Paradigm led the latest funding event, while existing sponsors Addition and Ribbit doubled their investment in the company. TIME Ventures, Marc Benioff’s investment fund, also participated in the latest funding, bringing the total Chainalysis raised to $ 265 million.
This latest round marks the fourth increase in Chainalysis in less than two years. Past sponsors of the company also include Accel and Benchmark.
Chainalysis was founded in 2014 as official investigators of the attack on Mt. Gox, then the largest cryptocurrency exchange in the world. Today, the New York-based company provides data, software, services and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in more than 60 countries. Its 400 clients include fintechs like Square, financial institutions like Barclays, and cryptocurrency businesses like Gemini, Bitstamp, and BitPay.
Chainalysis’ self-described mission is to “build trust in blockchains to promote more financial freedom with less risk.”
The company says its data platform powers investigation, compliance and risk management tools “that have been used to solve some of the world’s most prominent cybercrime cases and increase consumer access to cryptocurrencies safely. “.
Chainalysis operates under the belief that eventually all companies will use blockchain to carry out their business, according to co-founder and CEO Michael Gronager.
“We have collected more information about what happens on blockchains than anyone else in the cryptocurrency industry,” he said. “That information enables our clients to make better data-driven decisions.”
Over the past year, the company says it has accomplished the following:
- Increased your Annual Recurring Revenue (ARR) by more than 100% year over year
- It doubled its client base to include government agencies in more than 30 countries and private sector companies in more than 60 countries.
- It grew its support to cover more than 100 digital assets on 10 native blockchains, which encompass approximately 90% of the economic activity of cryptocurrencies.
- It doubled its number of employees last year to 233 today.
- Expanded its partnership program, which now consists of more than 50 companies, including Fireblocks and Flashpoint
Looking ahead, Chainanalysis said it plans to hire hundreds over the course of 2021; it also plans to use its new funds primarily to expand its business data offering.
“We will continue to invest in research and compliance software, but we will also create new data products for both our existing customer base and new audiences,” said Gronager.
The company is particularly focused on developing its presence in the Asia-Pacific region.
“Cryptocurrency is global, and so is Chainalysis,” Gronager said.
For Chainalysis, cryptocurrencies present unprecedented transparency.
“They are the first global payment systems outside of the control of any organization, but their blockchains create permanent public records of all transactions, including illicit activity,” Gronager told TechCrunch.
Blockchain analytics has been helping people interpret those public blockchain ledgers. Chainalysis tools aim to help government agencies, cryptocurrency companies, and financial institutions understand which real-world entities transact with each other.
“For example, we can show that a certain transaction took place between two different cryptocurrency exchanges, or between a cryptocurrency exchange and an illicit entity, such as a darknet marketplace or a licensed organization,” Gronager said.
Paradigm co-founder Fred Ehrsam said his company was drawn to the way Chainalysis provides key data infrastructure and software for the cryptocurrency ecosystem.
“The team knows the regulatory landscape better than anyone, has been refining its tools for years, and has a deep understanding of what its customers want. This is not an overnight success story, but rather a team that has been built with a long-term vision, through multiple crypto cycles, that has created a leading position in the market for themselves, with the opportunity to increase, “he added. “As crypto adoption grows, so will the demand for Chainalysis offerings.”
As further evidence of a cryptocurrency boom, BlockFi announced earlier this month that it closed with a massive Series D funding of $ 350 million with a valuation of $ 3 billion. The financial services company for investors in the cryptocurrency market offers a set of retail and institutional products.
In particular, BlockFi is also a Chainalysis client. In a written statement, CEO and co-founder Zac Prince said that Chainalysis provides BlockFi with data “that provides information beyond compliance that can help inform our business development activities, tailor our offerings, and identify new sources of revenue.”