KKR helps Anchorage Digital to more than $3bn valuation with $350m in new funding together with Goldman Sachs, and others

Dec 16, 2021 | News

Anchorage Digital, a federally chartered crypto bank in the U.S., has raised $350m in a Series D funding round.

Private equity giant KKR led the round by investing through its Next Generation Technology Growth Fund II. This is KKR’s first direct equity investment in a crypto firm, said Anchorage. In September, KKR took a stake in the flagship fund of crypto VC firm ParaFi Capital.

Other investors backing Anchorage’s Series D include Goldman Sachs, BlackRock, PayPal Ventures, Andreessen Horowitz (a16z), Alameda Research, Apollo credit funds, GIC (Singaporean sovereign wealth fund), GoldenTree Asset Management, Wellington Management, and private equity firm Thoma Bravo.

This round brings San Francisco-based Anchorage’s total funding to date to over $485 million and its valuation to over $3 billion. In February, the firm raised $80 million in Series C funding but did not disclose its valuation at the time.

Anchorage hasn’t even spent the funds raised from its Series C round, the firm’s co-founder Diogo Mónica told The Block. But it raised the new round to bring larger financial institutions on board for strategic growth.

“Many of these investors are also Anchorage’s clients or are on a path to becoming clients,” said Mónica.

 

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Anchorage started out as a crypto custodian in 2017, serving institutional clients. Over the years, it has turned into a fully fledged crypto bank, offering lending, borrowing, trading, and staking services.

Earlier this year, Anchorage received conditional approval for its national bank charter application from the Office of the Comptroller of the Currency. That conditional approval soon converted into a full-blown bank license as the firm met certain set conditions, said Mónica.

“We are already fully operational, and we have been so for over six months now,” he said.

Anchorage’s business has been growing “incredibly fast,” said Mónica, as more and more financial institutions enter the crypto space. He declined to share specific revenue details but said, “over the past year, client growth has been almost a thousand percent, and revenue has been very much alongside it in terms of order of magnitude.”

Anchorage serves both crypto and non-crypto firms, including VCs, hedge funds, fintechs, and corporates such as Visa.

With fresh capital at hand, Anchorage plans to scale its team further and expand internationally. The firm’s current headcount is around 200 people, and it looks to double the team size in the next 18 months, said Mónica.

As for international expansion, Mónica said Anchorage wants to set up regulated entities worldwide, including Asia and Europe.

Asked if Anchorage is planning to go public, Mónica said there is currently no plan to launch an initial public offering or IPO, but it “might make sense” at some point in the future.

Source: The Block

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