Paxos Trust Co., a blockchain startup that caters to financial institutions including PayPal Holdings Inc. and Credit Suisse Group AG, is valued at $2.4 billion after raising $300 million from investors.
The New York-based firm will use the new cash to hire more employees and add to its working capital, Chief Executive Officer Chad Cascarilla said in an interview. The capital may also be used for acquisitions, though none are planned, he said.
“The trajectory of our business, just like the space, has changed tremendously in the last six months,” Cascarilla said. As blockchain technology becomes more mainstream, startups like Paxos that provide infrastructure support for the industry are benefiting.
In March, Paxos used its technology to settle stock trades within hours of the transactions, rather than days, in a preview of what may soon be commonplace on Wall Street. The trades were on behalf of customers of Credit Suisse and Instinet LLC, Cascarilla has said. Paxos is testing its technology to transfer shares and money in near-real time in what could be a threat to the Depository Trust & Clearing Corp.’s half-century dominance in equity markets.
Read more: Stock Trades Settled in Hours Not Days as Blockchain Model Grows
Last week, the company received preliminary approval from the Office of the Comptroller of the Currency to operate a national trust bank, and some of the new funds will support that effort. Paxos is close to submitting an application with U.S. regulators for a clearing-agency registration and is pursuing a Major Payment Institution license in Singapore.
“Firms are coming to us to provide them with lots of different capabilities,” Cascarilla said.
The Paxos series D investment was led by venture capital firm Oak HC/FT, and took in funds from existing investors Declaration Partners, PayPal Ventures and Mithril Capital among others.
Investors have been pumping money into cryptocurrency projects such as Digital Asset Holdings, Chainalysis and Alchemy. That coincides with Bitcoin and Ether prices hitting records in recent months. As of April 27, 156 startups focusing on digital technology had raised $3.1 billion, compared with 341 deals that drew $2.3 billion in funding for all of 2020, according to CB Insights.
Source: Yahoo Finance