BlockFi, a startup that lets people and companies put down Bitcoin and Ether as collateral for US dollar loans, has raised $52.5 million from Galaxy Digital Ventures, a cryptocurrency and blockchain technology investment firm.
The deal sees Galaxy - founded by outspoken cryptocurrency advocate Mike Novogratz - put up the money in part as an equity investment and part as loan purchase facility. Details on the split were not disclosed.
Launched in January, BlockFi promises to help crypto investors put their Bitcoin and Ether to work, using them to get access to dollars without having to sell or trigger taxable events.
Individuals and corporations apply for a loan and get a decision within hours before sending their cryptocurrency to BlockFi's secure storage address. In return, users are sent dollars directly to their bank account which they make monthly interest-only payments on - either in dollars or crypto.
The startup already operates in 42 states, offering loans of up to $10 million. It plans to use the funding to ramp up marketing and bring the service to more people in more geographies as well as expand beyond Bitcoin and Ether.
Says Novogratz: "A robust lending market is the keystone for financial systems and BlockFi’s institutional approach and deep lending expertise were key drivers in our decision to partner with them."