Israeli cryptocurrency platform Fireblocks is currently raising $400 million in a huge financing round with the participation of Sequoia Capital, one of its existing investors, the technology website "The Information" reports. This latest financing round is at a valuation of $8 billion, which would make Fireblocks one of Israel's most valuable privately held tech companies. Fireblocks declined to comment on the report.
If the financing round is completed this month, then it would be Fireblocks third financing round in 2021. The company, which develops secure infrastructures for storing and transferring cryptocurrencies and assets for crypto exchanges, payment companies, banks, hedge funds, non-bank credit companies and other financial institutions, raised $310 million in June at a company valuation of $2.2 billion.
Only three months prior to that in March 2021, Fireblocks raised $133 million at a company valuation of $700 million, so this latest financing round would reflect the company's valuation increasing eleven-fold in just nine months.
The huge jump in Fireblocks value can be explained by two main developments. The first is the massive entry of the world's leading venture capital funds into cryptocurrency technology investment - a sector that it abstained from in the past. According to "The Information" 25% of Sequoia's investments in 2021 have been in the cryptocurrency technology field. Andreessen Horowitz has also raised $2 billion this year for investments in the sector. These funds have joined the existing funds that are dedicated to investments in this sector.
The second development is that more financial bodies are building infrastructures for storing and trading in cryptocurrencies. Americans currently buy and sell cryptocurrencies through alternative fintech platforms like Coinbase, RobinHood, Square and PayPal, although banks and credit card companies like Visa and Mastercard are beginning to build a presence in the field. In order to do this, these companies need the technology developed by Fireblocks for creating secure infrastructures.
In June, Fireblocks cofounder and CEO Michael Shaulov told "Globes," "We are starting to see broad adoption of digital currencies. There's an overt side to this, such as the report that Amazon intends to support bitcoin. There's also a hidden side, which we know from our work with 60-70 banks around the world, with credit card companies, and with leading clearing services, on the use of digital currencies. There's a big FOMO effect in this field."
Fireblocks was founded in 2018 by Michael Shaulov (who sold Lacoon Mobile Security to Check Point Software Technologies Ltd. (Nasdaq: CHKP) for $100 million) , Idan Ofrat, a founder of C4 Security, which was sold to Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), and Pavel Berengoltz, who was VP Development at Safend, which was bought by Wave Systems. The company has raised $489 million, to date, not counting the latest round reportedly underway.
Fireblocks enables financial bodies to carry out transfers of cryptocurrencies through its network and MPC (multi-party computation)-based wallet infrastructure.
Published by Globes, Israel business news - en.globes.co.il - on December 2, 2021.
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